¡Hola, I’m back! Didja miss me? My bad on being away for so long – the past 3 weeks were absolutely crazy for me. I had back-to-back events, overseas trips and meetings, and to top it all off, a bad case of food poisoning last week.
But ahhhh, it’s good to be back.
So earlier this week, I wanted to treat myself after my 3 weeks of craziness. So I drove down to one of my favourite noodle stalls: Soi 19 Wantan Noodles at Ang Mo Kio Ave 5.
When I got there, I was freakin’ amazed that there was already a queue of 10 people at the stall. At 10am on a Friday! My stomach was rumbling, but I waited.
- Continue waiting
- Give up, go home and make instant noodles
Some other things I’ve waited in line for: Ah Tai Hainanese Chicken Rice, Adam Road Nasi Lemak, Outram Park Fried Kway Teow Mee, Sin Ming Roti Prata, Ippudo. And when I was in college on the East Coast in the US: Shake Shack, The Halal Guys, Chipotle, and a buritto food truck near my campus apartment. Mmmmmmm.
What makes us so willing to wait? Because we know that it’s just a matter of time. Good things come to those who wait.
Most of us intuitively get this. Yet, when it comes to investing, most people end up doing the equivalent of abandoning their queues and going home!
I know right, it’s totally weird. S0 let’s think a little bit more about this.
The Stories We Tell Ourselves
I don’t have the statistics, but I’m willing to bet that the majority of Singaporeans hold stocks for less than a year. I know because I’ve conducted deep market research (i.e: Chatting about investing over a nice cup of kopi-o kosong).
Most people tell themselves a story when it comes to their investments. It’ll go something like this:
“I read in the papers that SingTel is investing in a new solar power plant in Texas! This is going to add $20 bagillion dollars to their revenue in the next 20 years. Plus, SingTel is a blue chip and backed by The Gods Of Temasek. Sure won’t lose one!”
Then several months later, they’ll go:
“Market is doing very bad now. China market just crashed leh! Plus elections are always a bad time for the market. And [insert financial guru name here] just showed me a technical analysis chart proving that it’s overvalued and due for a correction. Better sell my SingTel stock!”
Wait a minute – you bought it because of a solar power plant, and then you sold it for a reason that has absolutely nothing to do with your original analysis?
(Just so we’re clear here: I just made up that story about the solar power plant, so don’t take it literally. I’m talking to you, keyboard warriors.)
That’s like queueing up for Soi 19 noodles, waiting 15 minutes, then abandoning the queue and going home to make instant noodles! It just doesn’t make sense.
When You Can’t Trust Yourself
Why do people do this? Why do people buy an investment enthusiastically, only to abandon it at the first sign of trouble?
Because deep down, they know that the story they told themselves at the start might not actually be true. In other words, they don’t have faith in their investments.
And you know what? They’re perfectly justified.
Let’s face it – most of us are shitty stock-pickers. Nothing comes with guarantees, not even the most sophisticated value or technical analysis strategy.
That’s why I don’t like picking stocks. I know that I’m not smart enough to predict the next winning stock. (And anyone who claims to do so is probably trying to scam you).
Individual stocks – even good ones – fail all the time. Remember Research In Motion (the company behind Blackberry)? Kodak? Enron? Lehman Brothers?
Personally, I prefer to invest in the entire market. The market owns ALL stocks – it doesn’t discriminate. It doesn’t care. Yet, it rises over the long-term. In fact, if you held the market for 20 years or more, you beat inflation 100% of the time!
Why? Two reasons:
- The world economy rises over time as the population rises, technology improves, and businesses grow.
- The market naturally gets rid of crappy stocks and replaces them with good ones
When You’re On To Something Good
Let’s go back to why we’re willing to wait in line for good food.
In this case, we know that when we get to the front of the line, we’ll get a delicious meal. We know that the noodles are going to be springy, the nasi lemak is going to be fragrant, and that burger is going to be satisfying (burp).
When you know that you’re on to something good, you don’t mind waiting for it.
The trouble with most investors these days is that they don’t know whether they’re waiting on a false hope. Very few people have the ability or the time to pick individual stocks successfully.
Personally, I prefer investing in the market. It’s way more certain in the long-run, and it leaves me more time to do the things that I really love.
Like queue up for delicious food.
P.S: It’s been a long 3 weeks, so let’s have a little fun. I’d love to hear about what food YOU would be willing to wait in line for. Let me know in the comments below!