and Business Resources
Investing = Waiting
The waiting is the hardest part
As Tom Petty once said, "The waiting
is the hardest part." Impatience or impulsiveness frequently trip up investors.
If you've made a well-thought-out investing decision, then have faith
in your research and don't second-guess yourself. Perhaps find some new
hobbies to take your investments off your mind a little. Here are some
Maranjian (TMF Selena)
March 10, 2003
"The waiting is the hardest part
Every day you get one more yard
You take it on faith, you take it to the heart
The waiting is the hardest part..."
-- Tom Petty, "The Waiting"
You've been a good Fool. You discovered an intriguing company (perhaps
it was presented to you as an investment idea in The
Motley Fool Select or The
Motley Fool Stock Advisor) and you took your time studying and
thinking about it before taking any action. You crunched some numbers,
compared it with its competitors, evaluated its financial health, growth
prospects, and valuation, and liked what you saw. Finally, you took some
of your hard-earned dollars and plunked them into a handful of shares
in the company. Let's call it Dodgeball Supply Co. (ticker: WHAPP).
Hours go by
You're suddenly stricken with self-doubt. You consider selling
Have faith in yourself. If you did your due diligence, and studied the
company well, then you should have had some solid reasons for buying the
shares. Don't ignore the holding completely from now on, but don't obsess
over it, either. Give the seedling time to grow. Perhaps develop some
Might I suggest modern board games and card games? There are scores of
new ones released each year, many of them exceedingly fun. These are not
like Monopoly -- they typically play in an hour or less, feature varying
degrees of luck and skill, and keep everyone involved up to the end. Learn
more by perusing the BoardGameGeek
website, especially its many
lists of good games. Check out myriad game reviews at Funagain.com,
too, and explore the rich frequently
asked questions on games in our discussion board community. (Some
unintimidating favorites of mine so far: Bohnanza, Lost Cities, 6 Nimmt,
Through the Desert, Blokus, and TransAmerica. Some great but more complex
games: Puerto Rico, Princes of Florence, Union Pacific.)
(I'll offer some more suggested new hobbies throughout the rest of this
Days go by
Perhaps you, like T.S. Eliot's neurotic hero, J.
Alfred Prufrock, measure out your life with coffee spoons. If so,
then many coffee spoons come and go. (Perhaps it's more like a long line
of empty Starbucks (Nasdaq:
SBUX) cups.) One day, you read that a company insider, perhaps even
the CEO, is selling some shares of Dodgeball Supply. Uh-oh! You panic.
You clutch your heart. You grab your phone and prepare to call your broker.
That's not a good reason to sell. Remember that there could be many reasons
why the insider sold his shares. These days many corporate bigwigs receive
much of their compensation in the form of stock (or stock options). When
that's the case, they'll have to sell shares now and then in order to
generate some cash. Insider sales are not necessarily a corporate death
knell. Of course, if you see many insiders selling a big chunk
of their shares, all around the same time, then that does look
kinda bad. (Insider buying, meanwhile, is generally a green flag of some
sort. Bigwigs will rarely buy shares if they think their company is about
to burst into flames.)
Take your mind off investing a bit. Find
a drive-in theater to begin frequenting. There are still a bunch left.
Or buy and sell stuff at the massive eBay (Nasdaq:EBAY)
marketplace -- you
might be surprised at what you'll find there. (Some items I've noticed
for sale: mink handkerchiefs, Indo-Persian chain mail helmets, nursing
uniforms, rare ceramic dental floss dispensers, beachcomber metal detectors,
teeth-bleaching kits, the 1850 census from Bexar County, Texas, compressed
helium gas regulators, beard trimmers, socket wrenches, ravioli molds,
and pretzel warmers.)
Weeks go by
Your shares in Dodgeball Supply increase in value by 10%! (Perhaps
this is due to rumors that the Olympic Committee is considering adding
dodgeball as a new Olympic event.) Your heart starts beating rapidly again.
Should you sell? Should you buy more??
Relax. Take a deep breath. Remember that it hasn't been too long since
you studied up on the company, and not much has changed for it, except
the new possibility of even faster growth. You had expected the stock
to double for you in a number of years, so the fact that it has jumped
up a bit shouldn't stress you out. Should you buy more shares? Probably
not. Let's say that you invested 10% of your available funds in WHAPP.
If so, then you probably don't want to buy even more, as you'll likely
end up overweighted in one company.
Maybe it's time to pick up another new hobby. Consider taking flying
lessons, perhaps. You can learn more on our General
Aviation discussion board, and at the Federal
Aviation Administration (which also offers an Acrobat-formatted document
on how to start flying). If you'd rather save money than spend it, consider
the secret sport of dumpster diving. Learn more on our Dumpster
Diving discussion board and at these websites: The
Dumpster Lady, Dumpster
Diving: Treasure and Trash; Dumpster Diving tips
from New Hampshire; and Dumpster
Diving for Profit and Passion.
Months go by
Dodgeball Supply announces that its highly anticipated newest
offering, the Z-2000 ball, featuring the latest in rubber technology,
will debut a month later than expected. At fault is a late shipment of
supplies, due to a fire at a supplier's plant. You break out in a sweat.
You feel a stroke coming on. You rush to your computer, to get a quick
stock quote. It's down half a point. You think maybe you should sell.
Think about the issue at hand for a minute. Will this one-month delay
really change the future of the company? Is it an insurmountable problem?
Does it reflect serious problems at the company? No, no, and no. Some
news stories should make you stop and rethink whether you want
to keep holding a stock. But this isn't one of them. Patience, Fool. Time
for a new diversion, perhaps?
Consider keeping tropical fish. As one fan explained to me, "There's
something marvelous about creating an artificial environment, filling
it with life, and then maintaining it and watching it develop. When well
cared for, aquariums can be a great source of relaxation, entertainment,
and education about ecology, biology, and the aquatic world in general."
Learn more at Aquaria
Central and The
Beginner's Tropical Fish WebRing. (Allergic to fish? Try gardening!
Get more information in our Gardening
discussion board and at National
Years go by
If you've made it to a year and beyond, and you're still holding
those shares in a company you still believe in, then congratulations!
Here are some final thoughts:
You do need to keep up with Dodgeball Supply and all your
other holdings. But try to be proactive, rather than reactive. Read
the quarterly earnings reports and follow each company's health and
progress as revealed in financial statements. Pore over the annual
reports. Read discussion board posts
about the company and follow it in the news. (Google
News can help you mightily with that.) The more you know, the
fewer surprises you'll encounter.
Don't let other attractive companies turn your head, unless they're
significantly more attractive than what you own. Trading frequently
in and out of companies will generate commission fees and -- if you're
lucky enough to make a profit -- taxable short-term capital gains.
Do consider selling -- for the right reasons. These include: (a)
You find a much more compelling investment, (b) You need the money
now, (c) You will need the money within a few years, (d) You no longer
believe in the company's strength and growth prospects, (e) You realize
you don't know enough about the company, (f) You think the holding
is rather overvalued, and (g) The reasons you bought it are no longer
Don't let investing take over your life. To do it well usually does
take some time, but aim for a balanced life of work, profit, fun,
family, friends, etc. Overdose on investing now and you might burn
out before you develop a sustainable and profitable approach and routine.
Keep learning. Here's a big
list of resources that might come in handy as you learn more about
investing. And another list, covering some corners
of Fooldom that might be of great interest or use. Consider bookmarking
and revisiting these pages.
Selena Maranjian's goal in
life is to make the incomprehensible comprehensible. (Or is it to make
the comprehensible incomprehensible? Hmm...) For more about her, view
You might also be interested in books she has written or co-written, such
Motley Fool Money Guide and The
Motley Fool Investment Guide for Teens. The Motley Fool is Fools
writing for Fools.
Top of page.