My friend Vinod Thomas and I have together been investing in public equities for the last one year. So are you ready for some investing wisdom? Kidding. 😊
It is very tempting to think of yourself as a good investor in a bull market. But one of my ex-bosses, a renowned VC, used to tell us that you can’t judge investing performance quickly — one of his investee companies (MetroPCS) struggled to survive for almost a decade. Finally, he got back more than 20 times his capital.
Life is driven by two variables X and Y:
1. X includes things you control — perseverance, intelligence, skill, etc.
2. Y includes stuff outside your control — collectively, we have a name for it — ‘luck.’
In the short term, Y can override X. But if you play long enough, X is guaranteed to prevail.
Whether in the stock market or in life, don’t judge your successes and failures too quickly — for X to dominate Y, it takes time (often, more than a decade). So give it that time.
Working smart and hard is not enough — you also need patience. A lot of it.
– Rajan