And we have added specific questions related to past mistakes we made with certain investments, the obvious aim being not to repeat them!
But besides reducing errors, I believe that one of the great virtues of such a list (and the discipline it requires) is that it forces us to take our time before buying a new stock. Without such a checklist, how many times would we have bought before realizing that something had been forgotten, that it was a mistake?
This discipline to take our time that we try to apply to all our investment decisions reminds me of the lyrics of a song by one of my favourite singer songwriters, Leonard Cohen, called “Slow”. Here are two verses:
I’m slowing down the tune
I’ve never liked it fast
You wanna get there soon
I wanna get there last
I’m lacing up my shoes
But I don’t want to run
I’ll get there when I do
Don’t need no starting gun
Why try to get to your destination quickly when it’s the journey that counts and is interesting?
Patience is an essential virtue of the long-term investor. It materializes when he patiently waits for an opportunity to buy a quality company’s stock that he has coveted for years. It is exercised when the financial results of one of his companies disappoints in the short term, while he remains confident that its long-term prospects remain favourable. It takes on its full importance when the economy falls into recession or when the stock markets undergo sharp corrections, causing the value of one’s portfolio to fall sharply.
Those who want to succeed quickly inevitably make mistakes. They cut corners. They take unnecessary risks. Why invest on margin? Why indulge in day trading? Why buy stock options? To go faster.
Investing is not a race, and it does not place us in competition with anyone (except ourselves).
By taking your time, by focusing on the investment process, you improve your results and reduce the risks of never arriving at your destination.