Anyone who knows me is aware that I’m an impatient fellow. But the odd thing is that I’ve chosen a career where patience is essential.
I buy part of a company, nurture it and wait. At heart, capitalism is essentially the deferral of rewards. Instead of working and receiving a monthly salary, investors in private companies risk their funds and hope for a capital gain, perhaps half a decade hence. Usually such companies are expanding and need to reinvest their earnings. They cannot even pay an income to the owners in the meantime.
This attitude becomes addictive. I focus more than ever on medium to long-term growth in companies I own, which means I want businesses that endure, rather than transient victories. I find the idea of flipping a business for a quick turn unappealing. Identifying an attractive business and negotiating a transaction is so hard that I am increasingly reluctant to let the good ones go. That is partly because I have sold out far too early from some of my winners. So nowadays I risk making the opposite mistake – keeping them too long.