I am writing this series of letters on the art of investing, addressed to a young investor, with the aim to provide timeless wisdom and practical advice that helped me when I was starting out. My goal is to help young investors navigate the complexities of the financial world, avoid misinformation, and harness the power of compounding by starting early with the right principles and actions. This series is part of a joint investor education initiative between Safal Niveshak and DSP Mutual Fund.
Dear Young Investor,
I hope you are doing well and that the lessons we have covered so far have been helpful in guiding you through the early stages of your investing journey.
In my previous letter, I wrote about the remarkable power of compounding—how time and consistency can turn small investments into something significant. Today, I want to introduce you to a closely related concept that holds the key to allowing compounding to work its magic.
It is the art of waiting.
Waiting is an underrated skill in today’s fast-paced world, but when it comes to investing, mastering it can set you apart from those chasing quick gains and immediate results.
The Tennis Analogy: The Power of the Wait
Bear patiently with me as I take a slight detour and tell you about one of my favourite sports: tennis. I’ve always admired the individual brilliance, fearlessness, and electric atmosphere of the game. As a tennis player, you’re out there alone, fully responsible for your performance—whether you win or lose. That accountability is something I deeply appreciate.
I was once a big fan of John McEnroe, then shifted camp to Pete Sampras, and then Roger Federer. These have been among the most fearless players in the history of the game, at least since I’ve been watching it. My favourite for the past few years has been Novak Djokovic, considered one of the greatest tennis players of all time.
I love watching Djokovic take his strides while serving or returning serves, which he does so gracefully and so well. Every time he plays—winning or losing is a different matter—he displays a super-human level of strength, athleticism and endurance.
My liking for Djokovic started in 2008, and the thing I liked best about him was his momentary wait before returning a serve. Ever since, I’ve always seen him with a typical, indifferent expression highlighted by focused, peaceful face and bright, unfazed eyes, seemingly trying to clear the mind of any thoughts that might take his eyes off the ball that usually comes towards him at a speed of 120+ miles per hour.
That wait, that pause before the split-second decision, has made me believe that Djokovic is one of the greatest tennis players I’ve had the privilege of watching. It is this wait that has possibly led him to be widely considered one of the greatest returners in the history of tennis, an accolade given to him even by Andre Agassi, who was considered the best returner ever.
Anyway, while I’ve loved Djokovic’s waiting game, my mind never focused on a simple yet profound lesson this had for investors. It was an article titled Waiting Game: What Tennis Teaches Us I read in Financial Times a few years back that brought me to this lesson.
The author, Frank Partnoy, wrote:
His advantage over other professionals isn’t his agility or stamina or even his sense of humour. Instead, as scientists who study superfast athletes have found, the key to Djokovic’s success is his ability to wait just a few milliseconds longer than his opponents before hitting the ball. That tiny delay is why most players don’t have a chance against him. Djokovic wins because he can procrastinate – at the speed of light.
Think about that: Djokovic wins because of his ability to wait just a little longer than everyone else. Similarly, investing rewards those with the patience to pause, reflect, and make thoughtful decisions rather than rushing into actions based on fleeting emotions or market noise.
The Sketchbook of Wisdom: A Hand-Crafted Manual on the Pursuit of Wealth and Good Life.
This is a masterpiece.
– Morgan Housel, Author, The Psychology of Money
Waiting in Investing: Why It Matters
I have been an investor for over 20 years, and too often, I have seen investors get caught up in the rush of market movements. They act quickly, either in fear of missing out or because they want to capitalise on short-term opportunities. But the truth is that the greatest investors understand the value of waiting.
Warren Buffett, one of the longest players of the waiting game in investing history—starting at age 11 and continuing strong at 94—famously said:
The stock market is designed to transfer money from the impatient to the patient.
His partner, Charlie Munger, said:
The big money is not in the buying or selling, but in the waiting.
A large part of Buffett’s and Munger’s success didn’t come from timing the market or making fast moves but from their ability to wait—to let their investments grow over decades, uninterrupted by the noise of the daily market swings. This waiting, this ability to let time do its work like they and many other great investors have done, is at the heart of long-term investing success.
Now, unlike what many people think about waiting, it is not passive. You are not doing nothing. Instead, it’s an active decision to pause, reflect, and allow the forces of compounding and business growth to work in your favour. It requires discipline and trust in the process. That makes waiting as often the hardest part of investing because it goes against our natural desire for immediate results.
When you wait, you allow yourself the space to make better decisions. You resist the urge to act on short-term market trends or emotional impulses. Instead, you can assess your options carefully and ensure that your actions align with your long-term goals.
This leads to a powerful lesson from Partnoy’s article:
Life might be a race against time but it is enriched when we rise above our instincts and stop the clock to process and understand what we are doing and why. A wise decision requires reflection, and reflection requires a pause.
In other words, waiting allows you to process what’s happening—both in the market and within yourself. In that pause, that moment of reflection, wise decisions are made.
How to Develop the Art of Waiting
Like everything good, learning to wait isn’t something that happens overnight. It’s a skill that can be cultivated. I have a few suggestions on how you could do it.
First, shift your focus to the long term. The urge to act quickly diminishes when you stop focusing on short-term results and think in terms of decades instead of days. Ask yourself where you want to be financially 10, 20, or 30 years from now, not 10, 20, or 30 days or weeks or even months from now? Keeping this perspective helps you wait through the ups and downs your investments and emotions will go through.
Second, as Djokovic does before returning a serve, practice the pause. Pause not just before making any investment decision but also once you have made it. Often, waiting longer can give you the clarity you need to make a better choice. Then, once you’ve decided, wait for your investments to work for you. Not for days, weeks, or months, but years.
Third, tune out the news and the noise. In investing, it’s easy to get distracted and feel the need to act. But when you train yourself to wait, you learn to filter out the noise and focus on what matters: your long-term strategy and goals.
The Power of Waiting
Waiting, to repeat, isn’t about doing nothing. It’s about allowing time to do its work.
When you wait, you give your investments the space to grow.
When you wait, you resist the temptation to make hasty decisions that could derail your long-term plans.
When you wait, you cultivate the patience necessary for lasting success.
Waiting is not glamorous, but it’s the foundation of real wealth-building.
Before I end this letter, let me share an anecdote from an excellent interview I heard a few years ago with Anthony Deden, the Chairman of Edelweiss Holdings, a Bermuda-based investment holding company with over $300 million in investments. In the interview, Tony shared the story of an Arabic date farmer he met who had inherited an orchard that had about a thousand trees. As the farmer was showing Tony around his orchard, and took him to something like a hundred trees that were recently planted, Tony asked him out of curiosity, “How long will it take this tree to bear fruit?”
The farmer replied, “Well this particular variety will bear fruit in about 20 years. But that is not good enough for the market. It may be about 40 years before we can actually sell it.”
Tony replied, “I have never heard this. I did not know this. Are there other date trees that would produce faster?” Meanwhile, he looked at all those trees that were being harvested and realized that this farmer could not have possibly planted them.
The farmer tells Tony, “Okay. Here’s my grandfather and my father, great grandfather.”
“It was fascinating,” Tony said in the interview:
Why would a man do something today for which he would receive no reward in his lifetime? And the only reason he would do this if his time preference is solo. That he is concerned about his family’s wealth a generation or two from now because he received no reward by planting a tree that will have no …
In your world they would call it an economic loss. A loss of opportunity or God knows what they would call it, but he saw the world differently. And in the supermarket, I see dates. I think about the story now. And I am sure there are other similar kinds of situations.
That, I believe, is one of the best lessons I could ever share with you on the idea, power, and principle of waiting.
So, dear young investor, remember this: in a world that values speed, the true advantage lies in your ability to wait.
Be patient, stay focused, and trust that the wait will be worth it.
As they say, the journey of a thousand miles begins with a single step. One investment, one virtuous habit, one choice to play the long waiting game, and you are on your way to financial freedom and a life of wealth, material and otherwise.
I wish you all the best on this exciting journey. May your investments compound, your knowledge grow, and your life be rich in all the ways that truly matter.
Warm regards,
Vishal
Disclaimer: This article is published as part of a joint investor education initiative between Safal Niveshak and DSP Mutual Fund. All Mutual fund investors have to go through a one-time KYC (Know Your Customer) process. Investors should deal only with Registered Mutual Funds (‘RMF’). For more info on KYC, RMF & procedure to lodge/ redress any complaints, visit dspim.com/IEID. Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
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The Case Against Waiting: Why Timing and Action Matter More in Investing
While the art of waiting has long been championed by some of the world’s greatest investors like Warren Buffett and Charlie Munger, the idea that “waiting” alone is the ultimate key to long-term success in investing is not as straightforward as it seems. While patience can indeed be a virtue, it is far from being the only strategy required for building wealth. In fact, there are many scenarios where waiting can lead to missed opportunities, complacency, and even significant losses.
Let’s take a deeper look at why “waiting” might not always be the best advice for every investor.
The Danger of Passive Waiting
One of the key points in the article The Power of Waiting is that waiting is an active, thoughtful process, not just sitting around and doing nothing. However, this glosses over the fact that for many investors, waiting often turns into a form of passive neglect. Investors may convince themselves that patience will solve all problems, while failing to adapt to changing market conditions, economic cycles, or shifting business fundamentals.
Markets are not static, and neither should your strategy be. A company that was a great investment ten years ago may no longer be competitive today. For example, think about technology companies that dominated in the 1990s—companies like Nokia, Yahoo, or Blackberry. Waiting too long with such investments would have led to significant losses as these giants were displaced by more innovative competitors. Investors who held on to these companies, expecting a turnaround that never came, paid a steep price for their patience.
Simply waiting without reevaluating your portfolio regularly can lead to missed opportunities and wasted capital. Investing is about being proactive, not passive.
Timing the Market is Not Always a Fool’s Errand
The article suggests that waiting, rather than trying to time the market, is key to success. While it’s true that attempting to time the market consistently can be difficult, it is misleading to say that all forms of market timing are unwise.
Smart investors know how to recognize market cycles and take advantage of moments of volatility. There’s a reason why phrases like “buy low, sell high” exist in the investing world—it works. While long-term investors should avoid day-trading mentality, this doesn’t mean they should ignore strategic entry and exit points in the market.
During market corrections or recessions, savvy investors often find excellent opportunities to buy high-quality assets at a discount. For instance, those who invested during the 2008 financial crisis, when prices were heavily discounted, saw incredible returns in the years following. Similarly, during economic bubbles, knowing when to sell before the crash can protect your portfolio from massive losses.
A good investor doesn’t just sit and wait indefinitely. They make informed decisions about when to enter or exit positions based on market conditions and business fundamentals. Timing, when done thoughtfully, can be a crucial aspect of maximizing returns.
The Risk of Opportunity Cost
Waiting too long can lead to another major issue: opportunity cost. In investing, every dollar not actively working for you in the market is potentially a lost opportunity for growth. When investors overly focus on waiting for the perfect moment or staying too committed to a particular strategy, they often overlook better opportunities that come along in the meantime.
Consider an investor who keeps waiting for a tech stock like Amazon to drop to a more favorable price, but in the meantime, the stock keeps rising. By the time they decide to invest, they may have missed out on significant gains. Meanwhile, their money could have been earning returns in other investments during that waiting period.
Opportunity cost doesn’t just apply to buying; it applies to holding too. Investors who held onto oil stocks in the 2010s waiting for a resurgence in energy markets missed out on the tremendous growth that occurred in tech stocks during the same period. An active approach to reallocating capital can sometimes beat the returns of simply waiting for a single investment to pay off.
Over-Reliance on Historical Successes
The examples of Warren Buffett and Novak Djokovic, used to emphasize the importance of waiting, are certainly inspiring, but they are also exceptional cases. Buffett’s success comes not just from his patience but from his keen ability to identify superior companies and capitalize on them. Similarly, Djokovic’s brief pauses during matches are a product of intense training and precision, not just hesitation.
For the average investor, blindly applying the “wait it out” strategy without the same level of skill, analysis, or insight can be dangerous. It’s important to remember that Buffett and Munger are experts who can afford to be patient because they’ve already done the heavy lifting of identifying strong, long-term investments. They also have access to resources and information that most individual investors don’t.
For most people, a more dynamic approach—one that balances patience with action, reflection with agility—is likely to yield better results than simply relying on time to correct all investments.
The Evolving Market Landscape
One of the biggest reasons why waiting can be risky is because the market landscape is always evolving. Industries that are booming today may be outdated tomorrow. With the pace of innovation and disruption in fields like technology, healthcare, and energy, companies can lose their competitive edge rapidly. A company that once dominated an industry can quickly find itself obsolete in a world that is constantly changing.
For example, the rise of artificial intelligence, renewable energy, and electric vehicles has drastically reshaped industries over the past decade. Investors who waited too long to shift from traditional automakers or energy companies to innovators like Tesla or renewable energy firms may have missed out on some of the biggest gains of the last decade.
In this rapidly evolving environment, action and adaptation are as critical as patience.
Balancing Patience with Proactivity
Ultimately, the best approach to investing lies in striking a balance. While patience and long-term thinking are certainly valuable, they should not be used as an excuse to ignore market conditions, evolving industries, or the need for periodic portfolio reassessment.
Investors should develop the habit of regularly reviewing their investments, staying informed about market trends, and being ready to act when the right opportunity arises. Sitting on the sidelines or holding onto underperforming stocks too long can lead to stagnation or losses.
Conclusion: Don’t Wait Too Long
The art of waiting, as championed by many great investors, should not be discarded. However, waiting should not be seen as a one-size-fits-all strategy. The markets reward action, insight, and adaptability as much as they reward patience.
So, as you embark on your investing journey, remember that while patience is important, it is just one tool in your investing toolkit. Knowing when to act, when to change course, and when to seize opportunities is just as critical to building lasting wealth.
Waiting has its place—but don’t let it hold you back.