Alphabet - A Test of Patience and Belief
πππCharlie Munger, Warren Buffett's friend and business partner once said "The Big Money is not in the Buying or Selling, but in the Waiting".
The more investing experience I have, the greater the appreciation I have of how true this is for me.
share price dropped to as low as USD 83.34 last year and Big Tech Stocks were in the doldrums. I was in a state of quandary - Should I sell Google or should I hold? Then I asked myself what is the future of Google? Is it going to go bust or continue to grow? After all Google is the number 1 search engine in the world and it has solid balance sheet and excellent core fundamentals.
So I held onto my belief and conviction on Google and today I am so happy when it reported better than expected revenue and profits, driven by growth in its cloud computing unit.
Earnings per share of USD 1.44 versus USD 1.34 per share expected by Refinitiv
Revenue USD 74.6 billion versus USD 72.82 billion expected by Refinitiv.
2nd quarter revenue rose 7% to USD 74.6 billion from USD 69.7 billion a year ago.
Google is now up an impressive 47% year todate.
Google has an advantage over Microsoft as it has its own custom chip for handling AI work called the Tensor Processor Unit which helps lower cost while Microsoft has to buy from Nvidia.
The dramatic returns on Google reminds me that investment returns can be very unpredictable in the short term. But over much longer period of time, then investment returns become more predictable because the volatility evaporates and the cycles even out.
So when it comes to Successful Investment, the lesson I learn is to do nothing but wait.
To sum up, Successful Investing can be summarises in 2 steps.
1) Make sure that every investment is fundamentally sound.
2) Hold that investment for many decades and do nothing else.
As Warren Buffett loves to say "The stock market is a device for transferring money from the impatient to the patient".
So I hope to invest well and then do nothing for many decades. It's Simple but not always easy.
@Daily_Discussion @MillionaireTiger - Winning Trade @TigerStars @CaptainTiger
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The stock market is a long-term investment. Investors who are patient and invest for the long term are more likely to see their investments grow.
There is no guarantee that the stock market will continue to trend upwards in the future.
The stock market has historically trended upwards over time, even though there are short-term fluctuations.