In investing, it is said that the ones who turn over the most rocks make the most money. This is often true. Warren Buffett famously scoured the Moody’s manual for years on end, which was a publication comprised of hundreds of stocks and their histories, management, valuations, and more.
While he didn’t find a new investment opportunity on every page, he turned over a vast number of rocks, and his track record is proof that the process works.
As a long-term investor, I recognized that investors like myself are rational decision-makers who prioritize utility above all else when choosing investment tools. So when we first started building Vassant, we didn't just look at what features were missing from other apps. We wanted to understand the psychology of why people actually win or lose in the market and work backwards from there.
So, we did a deep dive. We talked to everyday investors, poured over market data, and spent many hours listening to the famous long-term “quality” investors who have actually done this successfully for decades, such as François Rochon and Terry Smith. We wanted to know: when someone achieves high rates of return over long time frames, what did they do differently than the average joe underperforming the market index?
It turns out, the secret isn't a secret at all. It comes down to harnessing two simple concepts that are easy to understand but difficult to implement in investing: conviction and patience.
The Main Idea: If you don't truly understand why you own a company, you will sell the second your positions dip.