John Wooden said “Whatever you’re doing, you must have patience”. There is a lot of power in being patient especially when investing. Another headwind in investing is ‘my investment is too insignificant to make a difference’. Here is my story from my early investing days.
I know some people whom have owned Apple since it was $3 dollars a share, Bitcoin when it was at $55, and paying for pizza in Litecoins. While monetary loss of opportunity is hard to ignore, what do these cases teach us? How do we avoid having a good idea and letting it go to waste? As Lou Holtz says, life is a matter of choices and that wherever we are, good or bad, is because of choices we make. In late September 2011 I had just got my first job on Wall Street and saved $1,000 and chose to start investing right away (in hindsight: GREAT IDEA).
Although I graduated from Financial Engineering program, I found that the real world is much different and I had a hard time analyzing stocks so, as I was beginning my investment career I decided to resort to companies I knew. I loved gaming, and figured the world is going towards graphics, so I picked a company I knew about — Nvidia. It is a technology company, mainly producing graphics chips for gaming and professionals, along with other computer chips equipment.
On May 18th, 2012 I bought 80 shares of Nvidia from the money I had saved and I continually watched the stock every day. I did not realize at the time, but this was the first sign of a very bad behavior in investing — impatience. I had hoped that my thousand dollars would become two very soon, so I can move onto another opportunity. Usually the real world runs in a very different, slower gear.
Four months later, when this did not happen I started thinking to myself that this is not moving as fast as I’d like it to, and even if I was right what difference is $1,000 going to make? I’m going to get $300–$400 of profits? Hardly worth it. I sold the stock on September 6th, 2012 for $71.19 profit after commissions.
In 2016, 2017 and 2018 Nvidia took off like a spaceship. It rose from $12 a share to $260. My 80 shares would be worth $20,800. I never lost faith in Nvidia as a stock, it was my impatience and my feeling that $1,000 I invested wouldn’t make a big impact on my life that caused me to sell.
Think about yourself. Are you impatient? If you are trying to get your money to work for you, be patient and believe that even a small investment, chosen at the right time, can bring you a great reward. Overwhelming historical evidence exists that proves this point. My lesson ‘cost’ me almost $20,000, but it taught me that with patience and whatever money I have I can meaningfully impact my life.
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