In a few words:
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Even when we are on vacation, our portfolio companies work for us.
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The best thing to do is often to do nothing.
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I’m taking time off from blogging for the summer; thank you to my colleague, Jean-Philippe Legault, who will take over.
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Enjoy the summer!
This report made me think about my personal situation and the link that can be made with the management of a portfolio and the management of a business.
In my book Avantage Bourse, one of the concepts I discuss is that of balance. I used a quote that sums up my way of seeing things well:
“…Charles Scharf, Chairman of Visa, ended his letter to shareholders in the company’s 2016 annual report, before stepping down: ‘Life is precious, balance what you have to do with what you want to do.’”
Summer is almost here. It’s time to enjoy the nice weather, from our balcony or our yard. I tend to want to work on my yard tirelessly, as long as everything is not to my liking. Often, I work so hard on my land that I’m too tired to enjoy it! This summer I want to enjoy my yard!
Same thing for travel: let’s stop wanting to see everything in two weeks. Let’s take the time to stop in a park, a garden that was not on our itinerary. For my next trip, I want to stop running around in order not to miss anything. This is the equivalent of the FOMO (“Fear of Missing Out”) concept that affects so many investors! Take the time to live like Europeans, sipping a drink on a terrace or reading a book in a park.
In investing, “Do not think that the hours invested in your investments necessarily translate into better returns. It’s counterintuitive, but the better you’ve done your job in selecting your stocks and building your portfolio, the less time and effort you’ll have to devote to it in the future, and the better your performance will be in the long run.”
“Wanting to go too fast to get rich, we will take undue risks and set our sights on securities of speculative companies, mines or small biotechs. On the other hand, those who take no risk, who confine themselves to bonds or the largest blue chips, will obtain below-average returns.”Nowadays, it’s particularly tempting to jump on the AI train.
I like to remember that the managers of the companies we own in our portfolio work tirelessly, every day, to develop their business and create value. It is wrong to think that you have to be active and make investment decisions every day to move your portfolio forward faster. If you have chosen your companies well and constructed your portfolio well, the best thing to do is generally to do nothing. Even if we take vacations, our companies don’t stop working for us.
This is my personal praise for slowing down. Live in the moment and take full advantage of the beautiful season.
My colleague, Jean-Philippe Legault, will take over the weekly blog starting next week. I will be back at the beginning of September. Have a good summer!
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