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“ All the great investors highlight the power of longerterm time horizons , but also the dispassionate ability to acknowledge mistakes and act accordingly ”
“ Confusion on this matter usually resides in a misunderstanding of the differences between ‘ speculation ’ and ‘ investment ’,” he notes . “ The latter accesses the ‘ eighth wonder of the world ’: compounding . “ Short-termism excludes this dynamic . All the great investors highlight the power of longerterm time horizons , but also the dispassionate ability to acknowledge mistakes and act accordingly . “ Many non-professionals get confused between investing and speculation , such as the current retail hype and option activity around many technology and non-profitable companies , which is almost a form of gambling and inherently short term . Investing benefits from the partial ownership of a business on a longerterm basis where its current and future cash generation and potential returns on capital are not fully recognised by the market .”
The value of patience While there appears to be a
consensus among fund managers that you should never take a shortterm approach to investing , most of them are also of the view that a
PERFORMANCE OF FACEBOOK SINCE IPO
$ 300 |
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$ 200 |
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$ 100 |
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0 |
2014 |
2016 |
2018 |
2020 |
Source : Google Finance |
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