Some may have noticed I didn’t do one of my regular Weekend stock articles this week. It has been another week of no luck finding a suitable investment, but I’ve also been quite busy this week. I’ve been reflecting a bit on just how much time and effort investing takes and whether you are getting good value for the effort put in.
I started investing years ago, and since then I have read quite a few books, and a lot more annual reports and online information sources, like blogs and the news. I don’t know how many hours I’ve invested in this but it has to be a LOT. If I compared it to the hours I have spent working, I am sure I would have earned substantially more per hour in my job than investing. So why do I do it?
Well firstly, I enjoy it. To be more specific I enjoy finding an undervalued investment and making money from it, I don’t always enjoy the process though. Searching through endless annual reports can get pretty boring if you are finding it hard to find good ideas. Secondly, the returns on your time invested when starting out will always be the worst. You have the smallest capital in play and are a novice so can expect to make mistakes. But over the long haul, as your wealth increases the returns on your time should improve until (hopefully) you reach a stage where you can solely survive on investment income. If your lucky (or work damn hard) you could even find a few solid long term investments, buy them and just leave them forever, living off the returns they generate (Warren Buffett is a fan of buy and hold forever, it certainly involves less work!).
For now though, especially when writing a blog as I do, the time invested is long and hard, and doesn’t really generate immense returns unless you have a lot of capital to start with. When you also have a full-time job like I do, investing is a serious commitment. Even if you don’t search for your own ideas and use blogs or other information sources, there is still quite a bit of research to do yourself, and reading.
I am lucky in that my job involves reasonable hours, and allows me to pursue other interests, but there are plenty of other things I want to do too. I am learning to play the piano, which means finding time to practise every day, learn to read music and a range of other skills. I also like to work out, I don’t go to the gym to save on time but even at home, I train at least 30 minutes a day. I also have other ambitions, like to write a novel. I have had a story developing in my mind for over 10 years now, and finally started to get it down on paper. I was surprised by how much I enjoyed writing, it is so creative and everything happens exactly as you want it. But over the last few months with the start of this blog progress has been almost non-existent, not that I regret starting this blog, I don’t and will continue with it for a long time!
And lets not forget, on top of all this, I need to have a life! Go out and socialise with people, have fun, visit places, watch some TV, play some computer games etc. So where does one find the time? Well something usually has to give, I may go a few days pretty much non-stop looking for investments, then I might have a few days relaxing and practising on the piano. But in the end I will end up spending less time on some things than I would like to in an ideal world.
What’s the point of this post? I’m not even sure myself! I find writing this blog very useful and will continue to do so, but it is a huge commitment and ideas are hard to come by. I also want to start writing my novel again and to be honest I think now is a good time to do it. The markets are high, finding good ideas is getting hard, and I want to scale back slightly the time I spend investing and focus on an area I can make more progress in the short term. I’ll still be posting and searching for investments don’t worry about that, but for now I think I will allocate a higher proportion of my portfolio to managed funds, like the Special Opportunities Fund I wrote an article on. After all, these guys are working on this full-time so maybe its sensible for me to “contract out” some of my investing work while its getting tough.
Investing Sidekick
Founder of Investing Sidekick. Works as a research analyst and is an avid value investor, always searching for undervalued shares.