Why long term investing is easier than short term
When talking to friends about investment opportunities I often find myself stating:
“Do you think X is going to be worth significantly more in 5, 10, 25 years?”
That question is a lot easier to answer than what will happen in the next 3–6 months or the next year (the short term).
Short term is hard
It helps cut through all the short term crap. What if the market turns tomorrow? What if they don’t hit this quarter? Aren’t valuations really high right now? Those questions are much harder to answer, a lot of smart people get paid a lot of money to answer those questions and they’re not very good at it. You start trying to time the market. Good luck timing the market.

I think the best quote about long vs short term investing is from Benjamin Graham.
In the short run, the market is a voting machine but in the long run, it is a weighing machine. — Benjamin Graham
Long term is simpler
Charlie Munger nicely summarizes additional benefits to long term investing:
“Sit on your ass. You’re paying less to brokers, you’re listening to less nonsense, and if it works, the tax system gives you an extra one, two, or three percentage points per annum” — Charlie Munger
It’s hard to sit on your ass when everybody is telling you the world is about to end and x company is overvalued and y country is about to go down the tube, but it pays. You don’t have to follow CNBC and listen to the folks who don’t know what they’re talking about. You can check back in with it when you please. If something is so newsworthy it will find you. The tax system is also favorable thanks to capital gains tax. But if you can do it, it will pay off.
While it sounds easy in theory, it’s harder in practice. It takes a specific type of temperament that is OK to be thought a fool for long periods of times. You also have to be comfortable not having to spend that money for a while. If you’re likely to need the capital in the next 1-5 years that increases the risk of the investment significantly because you are now subject to market timing when you have to sell.
Over the next few weeks I’ll share some ideas for what I think might be good long term investments.
Disclaimer: Do not listen to me for investment advice. I’m a hobbyist at best.
