Saturday, November 7, 2009

Patience - Pays


Dear Readers,

What are the essential traits for a smart investor? Let me answer this question in my own way.

In my view, the first and foremost quality of an investor is having good knowledge. Generally, he must have sound knowledge on his entire investment stratum. Here, the word knowledge is pervasive from the updated information on the intact subjects to the expertise he attained by experiences which may useful to him as an investor. Broadly, he or she should have updated wisdom with in the sphere.

The second aspect as well as the true subject of this post is “Patience”. I wish to discuss about this key topic with an investor’s angle. Patience is one of the most indispensable and must have element for any investor. Please relate the following lines with an investment angle rather than the logical harmonizing of the word “Patience”

The Dictionary (Webster’s) defines “being patient” as follows:-

(a) Enduring pain, trouble, etc. without complaint
(b) Calmly tolerating insult, delay, confusion, etc.
(c) Showing calm endurance
(d) Diligent, Persevering

Patience can be described as a state of endurance under intricate circumstances. In other words, keep yourself stubborn towards delay or provocation without being bothered or distressed. The word “Patience” can also interpret as a decision making quandary which involves both the options of either a small remuneration in a short term, or a more precious return after a long period of time, pointing to the worth of waiting, You can realize with in nearly all of the investment options, delayed rewards are persistently on the higher side than the price of immediate gains.

When come to the stock market investments, the big money is not laying in the buying or selling but it is veiled in the waiting, or we call this patience. Turning a scrip in to multibagger is also not a process of some few weeks. In other words, we have to give enough time to the management whome you selected after a strict and an exhaustive process. The concept is closely related to high end of patience and the reward must be fruitful. I think, majority of the investors are aware about this fact, but a very few or rare percentage practicing it in the real life. It is hard to stay consistent with your beliefs between the frenzied and provocative crowd of experts. But you have to!.. It is not an easy exercise to keep you idle, between the extensive internal or external provocations. The internal emotions also play a big role in the decision making like greed etc.. If you controlled yourself, the hardest part is over. Here I wish to list the third important quality of a smart investor, `faith’ or we call the confidence.

Let us see how these three essential elements related to each other. The word “patience” is very much synonymous with the “faith”. You have good faith in you, that is the reason you are keeping good patience towards your decisions. The sheer faith probably restricts you to act against provocations. The faith again closely associated with your “knowledge”. To have patience means to have faith in your selections, decisions, knowledge and above all in yourselves. Again, the faith or sheer self-confidence is a distilled product of true knowledge you attained. You can see, how these three terms are related to each other, the Patience, Knowledge and the Faith. Please read the para again, if you wish to take it as a serious note.

I wish to compare the investment in stocks with growing a seed. You have to let the seed to sprout, gradually to a plant on the way to become a huge tree. As you know, the tree has much higher value than the seed or the early plant. Certain trees bestows you delicious fruits through out its life as dividends. If you can grow a forest or a farm in this sense, it will endow with an unmatched returns or it may change the life of your coming generations.

Following are the very few worthy examples of the fruits of patience in recent past. I have placed the turn around value of Rs. 10000/- at the bottom of each scrip.


Price in Oct 2001 - Rs. 41.70
Price in May 2008 -Rs. 4390.00
Returns - 10427.58% (7 Yrs)

Rs. 1052758.00

Bharati Airtel

Price in Nov 2002 -Rs. 21.50
Price in Jan 2008 -Rs.1010.00
Returns - 4597.67%(5 Yrs)

Rs. 469767.00

Electrothem India

Price in Jun 2003- Rs. 2.45
Price in Jan 2008 -Rs. 619.00
Returns - 25165% (5 Yrs)
Rs. 2526500.00

Bajaj Electricals

Price in April 2003 - Rs. 20.00
Price in Oct 2009 -Rs. 835.90
Returns - 4079.50 (7 Yrs)

Rs. 417950.00

Crompton Greaves Ltd

Price in Sep 2001 - Rs. 18.10
Price in May 2006 -Rs 1225.00
Returns - 6667.96%(5 Yrs)
Rs. 676796.00



Axis Bank

Price in Jan 2002 -Rs. 25.70
Price Jan 2008 -Rs. 1291.00
Returns - 4923.35% (6 Yrs)

Rs. 502335.00

Data courtesy :

There are hundreds of scrips in this category and it is not possible to list the entire. I am not disregarding the complexity on decision making on the entry or exit point in such stocks rather wish to illustrate the power of patience.

Do you believe, you have such diligence in you to devour the fruits of patience?

Learn the art of patience. Apply discipline to your thoughts when they become anxious over the outcome of a goal. Impatience breeds anxiety, fear, discouragement and failure. Patience creates confidence, decisiveness, and a rational outlook, which eventually leads to success - (Brian Adams)


Comment please...



  1. Hi Shabu,

    Nice post once again. Success in any investor's life comes not from too many stocks, but from very few stocks. And he just has to wait for the opportunity patiently without getting digressed by any other external force. The challenge however is in identifying the opportunity. Things look very clear if we see backwards. But in the forward direction, predicting the future is extremely difficult, and this is what makes people lose their confidence. So my final question comes down to this - How should we identify a good opportunity?

    Madan Kumar Rajan

  2. Dear Madan,

    Thanks a lot for the comment.

    I wish to mention a famous quote agin about the past,

    'History is the present. That's why every generation writes it anew. But what most people think of as history is its end product, myth.(E. L. Doctorow)

    Else, the question you raised is genuine and I have the answer...

    Please refer

    I hope, most of my readers are interested in making good money rather attaining the acumen behind the doors......


  3. Sir,

    Thanks for the article. Patience is more important than knowledge. Many investors having good knowledge are not getting success due to lack of patience.


  4. Dear James,
    Thanks for the comment...

    You are right in some way... sometimes the knowledge even cannot stop the emotions....


  5. Hi shabs

    I feel you have taken a lot of patience to write this article, kudos to u , its not only meant for investment purpose , but life as a whole, the more patience u cultivate the more the peace and success. I think one can adapt your advise to have a great future and happy living.
    thank u for the article , i appreciate your patience once again, hope to see great articles from u in future too.

    vinod jose

  6. Thanks for a very good article Shabu!

    I feel 'Patience' is the word that is lost under emotions of greed, fear and anxiety. Natural instinct takes there course when situation becomes extremely panic driven/ or situation becomes extremely greedy.

    I guess patience plays key role everywhere in stock market- i,e
    1/ How to pick the best stock- Patience of accumulating knowledge of all strength / weakness of company
    2/ When to buy the stock - Patience of waiting for a favorable condition of maximum pessism on the stock/or on stock market/ economy etc.
    3/ And lastly, patience of holding the stock to see company grow length and breadth .

    Thank you Sir,

    Keep posting like these very good articles
    Best Regards

  7. Sirs,

    Thanks a lot for the inspiring comments. I will surely try to bring more in this row.

  8. Hi Shabu,

    Good article about these multi-baggers.

    The point is that all these companies must have had some common fundamentals to become multi-baggers.

    It could be anything like vision, opportunity, monopoly, resources, good management, etc.,

    I think we should discuss about which company today has similar kind of characteristics which can turn out to become a multi-bagger in next five years.

    Everyone should comment on companies which they think could be multi-bagger of future providing the reasons along with it.

  9. Thank you SheeL,

    You are absolutely right. I also wish to have such open discussions and sharing of knowledge, will help us a lot in this row...

    Finding a good scrip is hard, measuring it is harder and making a decision to invest in it and keeping patience for the fruit is the hardest part of investing.


  10. Dear Sir,

    really very nice article..




The blog is associated with information on Indian stock market and author’s investment view points on various emerging stocks/sectors. The contents discussed in this blog are purely my own personal opinion and in no case weigh it as any kind of recommendation for stock market investment. The sheer purpose of this blog is to educate the interested community on market related subjects based on my experience and I am, in no way, responsible for investment decisions based on the contents described in this blog.

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