Morgan Housel, who appears tomorrow on The One Percent Show, tweeted four years ago:
I completely agree with Morgan, and also that “shut up and wait” is one of the healthiest tips you will receive and should follow for wealth creation.
Only to do this is not so easy.
The idea of buying and maintaining high quality businesses for a long period of time is simple. Everyone knows this and even those who don’t practice it appreciate that this works with most high quality companies, as history has proven time and time again. But then, it is important to understand that the action of not doing anything over such a long period of time it involves hundreds of decisions over months and years leading to this inaction.
Like this –
Now, one way is to buy high quality businesses and forget them for 20 years and hope to end up with a fortune. There are quite a few fairy tales of this type that you may have heard of. But the other side of the picture is that countless people have also ended up with doubts in their portfolios or companies have disappeared when they realized that their father or grandfather had bought some shares and forgotten about them for 20 years. or more years.
Therefore, it is generally not easy. And it’s not supposed to be easy.
But if you’ve done your homework well and kept your eyes and ears open, “shut up and wait” is still the best bet for your quest for wealth from stocks.
And as Frank Partnoy wrote this in a brilliant article many years ago –
If we limit ourselves to a single word of wisdom about decision-making for children born in a hundred years, people who will have all our advantages and limitations as human beings, but will have to navigate a world of unimaginable pace that what we confront now, there is no doubt what that word should be.
Better, shut up and wait.
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