Collection: Mohnish Pabrai - #135 'How can Millennials develop Patience in investing?'



[Transcript]

AUDIENCE MEMBER 00:00

So one of the biggest takeaways I got from your presentation is that it takes an inordinate amount of patience in order to find out what are the good investments to undertake it as by your example of the individual who look through 50 years and made one investments within those 50 years.


So for millennials such as myself who are used to the generation of smartphones and digital apps who maybe don’t necessarily possess, you know, that type of patience which is probably something that may be developed, I’m not really sure.


What are some tips or what are some words of wisdom that you would have for those within the millennial generation who would like to adopt this type of approach?


MOHNISH PABRAI 00:51

Sure, alright that’s a good question.


So what I would say is, you know, I think investing is a great activity for a gentleman or lady of leisure, if you will. You should have something else that is your primary vocation if you will and this becomes secondary. I think it works really well when you don’t have to think about why I haven’t done anything last week or the week before and what am I doing.


So one way you can skin that is you could get all the hyperactivity out of your system by being involved in fast-moving start-ups for example, you know, you could do any – you could have a day job which satisfies those cravings of, you know, lots of action and activity.


But in your investing world, I think there is no way around the fact that patience is almost a – it’s like a law of physics in investing. It’s unlikely that one can develop a great track record as an investor if one is hyperactive, I think the two kind of – don’t jive with each other.


There are periods of time when lots of investment become available or certain sectors become attractive and such. And there are many periods of time when there’s not much to do.


And so, investing is a great activity if you have something else that takes away all your cravings for action, and it’s very important to – I think it’s very important thing that if you’re – it’s also an activity that probably to some extent is probably there’s some genetic predisposition.


If your genetic predisposition is of a hyperactive trader, you probably not going to have an easy time sitting there like Charlie Munger just reading without doing anything. But if you’re predisposed to just being a thoughtful person it doesn’t particularly crave action then I think it can be a huge positive, so it’s not easy to be on this path.


One of the reasons I wanted to give this talk is I wanted to pound these ideas into my head to get to being more patient than I am because I think that I have not practiced this degree of patience in my career. And I think if I were to be more patient, I think the results will be better.


So I don’t have an easy answer for you, I would just say split your time into two buckets; the hyperactive bucket to get all that hyperactivity out of the picture and then have this second thing on the side which is reading and waiting.


(Source: https://youtu.be/bLjoL5zhBxA)

 

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