Today, I want to tell you a story. It’s the origin of one of my most important investing mantras… One you’ve heard me say time and again: Patience and process.
I constantly preach this phrase. Because for all the countless lightspeed trades, exotic financial derivatives, and big money buy signals I’ve experienced in my career… Patience and process are what ultimately brought my investing success.
But, I’ll admit, I didn’t come up with it myself.
It actually came from a client of mine, years ago, who ran a multibillion-dollar hedge fund. My job was to manage his trade orders – as I did for many others. But he was different.
If a stock he wanted ran away after he put in his bid, he wouldn’t chase it. He just sat with his original order. I’d ask him, “Hey, do you want to update your bid price?” As his broker, I wanted the trade just as much as he did.
“Patience and process; patience and process,” he’d say. It took me a long time to figure it out, but in the end, he was right. He had the patience for the price to get where he wanted it, and he always stuck to the process that worked for him. He was one of the most successful money managers I knew on Wall Street.
So, that’s when I understood how it worked for him. But here’s when it really started working for me…
Time to Think
I was in Phuket, Thailand, around 2004. I’d decided to meet up with my boss at the time.
We met up on this beach, Kata Beach, on the west side of Phuket. We decided to go jet skiing. So he and I took off westward towards a tiny, deserted island called Koh Pu (“ko” means “island” in Thai).
It was about a mile away, and took a half hour to get there. But as I got to the other side of the island, ready to loop around and follow my boss back – boom, my jet ski dies.
I’m stuck in the middle of the ocean staring out at the horizon, blue water as far as I can see. And I see my boss just zipping off back to where we came from, leaving me with only the sound of water sloshing against the jet ski.
And I just had to wait. Was I going to jump off and swim the mile back to Kata Beach? No, that would be a panicked move. Eventually, someone would come back to get me. And sure enough, about an hour later, a jet ski comes along to tow me back to shore.
That hour taught me a lot about being patient. I had a lot to think about while sitting out there. And, strange as it sounds, that hour contributed a lot to my investment strategy in the years that followed.
Patience Brings Success in a Volatile Market
Here’s why I’m telling you this story…
Lately, the market has been talking out of both sides of its mouth. Some days it falls because of bad news – or no reason at all. And the same can be said of the up days – good news or not.
Last week, I was telling you about how elections bring a lot of volatility, and historically, big money typically sells ahead of an election, and buys after. That has been the case for every election since 1992. And guess what? We’ve already seen that play out.
However, this week the buying seems like it’s happening a little early. So, what gives?
Looking at the latest data, level of selling is slowing down in the market. The Big Money Buy/Sell Index (BMI) looks like it’s leveling off, and might even resume its uptrend.
And if we see this reversal continue like we’ve seen lately, we might start seeing bigger buyers come back in.
If that happens, buyers have the all-clear to get back in on the greatest stocks. Naturally, we want to grab them at a discount and be patient and find our prices, but we also have to roll with the punches.
In other words, we have to sit on the jet ski. We have to wait for our moments to strike, and be comfortable rolling with the waves in the meantime.
For example: One stock I pinpointed this year was life sciences software firm Veeva Systems (VEEV). I recommended it to subscribers on March 17… and it immediately ran away from our recommended buy price.
But we didn’t chase the stock, or cancel the recommendation. That would’ve been the proverbial “swim back to Kata Beach.”
Instead, we waited for the tow. And the next day, VEEV pulled back and we scooped it up where we wanted to buy it. Since then, it’s up over 100%. We recommended selling half the position, so the rest of the gains are all pure profit.
No matter what, your goal should always be to find the highest-quality stocks in the market, and own them at the best prices you can. That patience to catch your bid and let the big money do its work for you… and the process to pick those stocks out of the whole financial ocean… are your ticket to success.
Patience and process!
|
Jason Bodner
Editor, Palm Beach Insider
P.S. My next Palm Beach Trader recommendation releases tomorrow afternoon.
And as always, we’ll use my unbeatable stock-picking system to identify the highest-potential stocks in the market – no matter what happens in the next few weeks.
Look… In my view, investing should be simpler. I have no doubt that buying and holding the right stocks is the true key to long-term market success. All the trend-chasing, short-term trading… you can throw it out the window when you have this system.
There’s no doubt in my mind that what we pick tomorrow could quadruple our money like other stocks have done before. Click here to learn how you can get access.