“Hey doc! You indicated and started root canal on my painful tooth yesterday, but it’s still painful today!”
“Relax, Mr Tan, within 3 to 4 years, the economy MUST recover. When we invest, we are investing for 10, 15, 20 years. You may look as if you are making a big loss today, but you have not borrowed money to invest. You will ride the storm, the company recovers, your shares go up.”
Ooops, wrong excuse.
In dentistry, results show up quite quickly. If the patient has acute pulpitis where tooth decay has reached the nerve, he wants immediate relief. There is no way you can tell him that your treatment works if the pain doesn’t go away in a day or two. No fast pain relief, lousy dentist.
But don’t get me wrong. I’m a firm supporter of long term investment. And I believe any good long term investment is one that is bought at rock bottom prices. You may convince me that my stocks bought at $10 then dropped to $2 will one day, 10, 15, 20 years down the road, rise to $20. But you can’t convince me that it’s better to buy at $10 than to wait a few months and buy at $2. When it eventually hits $20 10, 15 or 20 years later, I make a lot more money than if I’ve bought in at $10. If I can be accused of impatience if I can’t wait 10, 15 or 20 years for paper losses to turn into profits, why couldn’t the decision makers wait a few months and buy in when the market is much nearer the bottom. With little or no paper losses, perhaps we won’t need to wait 10, 15, 20 years to see profits.
One would be able to forgive an ignorant dentist like me for buying in at $10. In fact, even an ignorant dentist like me can even be considered a successful investor if I don’t use borrowed money and can afford to wait 10, 15 or 20 years. In fact, if my little kid were to make a random choice on the stock market, there’s a good chance that he can be considered a successful investor in 30 or 40 years’ time.
Dewdrop Notes
Dr Chan's Kitchen