Your belief in the long run isn't enough - Deepstash

Your belief in the long run isn't enough

Your investors, coworkers, spouses and friends have to sign up for the ride. Being right is one thing. But you also need to be able to convince those whose support you rely on.

An investment manager who loses 40% can tell his investors, "We're in this for the long run," and believe it. But the investors may not believe it and bail. Even if the manager is right, no one's around to benefit.

Or when you have a great idea that will take time to prove, but your boss and coworkers aren't as patient.

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MORE IDEAS FROM How to Do Long Term

Dan Quisenberry

"The future is much like the present, only longer."

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A long term horizon with a set end date is as reliant on chance as a short time horizon. You don't know what the world will look like in ten years' time.

A superior view has a flexible end date. It is true that time is compounding's magic. But the odds of success is deepest when you mix a long time horizon with an indefinite end date. The more flexibility you have, the less you need to know what is up next.

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Long-term thinking

Long-term thinking is more challenging than most people imagine. It is then also more lucrative than many people think.

The long run consists of a collection of short runs that you have to put up with: recessions, bear markets, meltdowns and surprises. Instead of assuming long-term thinkers don't have to deal with nonsense, the question is how you can endure all the short uphills.

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You may feel that everything will be fine if stocks fell 30%. You may even see it as an opportunity.

But stocks fall 30% because there's a collapse, a terrorist attack, or a pandemic. In that context, you may instead switch to a survival mindset and not have the endurance you imagined.

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The world constantly changes, which makes changing your mind essential. Long-term thinking can become a crutch for those who are wrong but don't want to admit that something used to be true, but the world moved on from there.

Doing long-term thinking means identifying when you're patient or just stubborn. Know the few things in your industry that will never change and accept that everything else will need constant updating and adapting.

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RELATED IDEA

Some downsides are unavoidable

Life is a little easier if you expect a certain chunk of it to go wrong no matter how hard you try.

Smart people screw up. Good people have bad days. Nice people lose their temper.

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Long-Term Thinking
  • Playing the long game puts our focus on the quality of the work, instead of being a sell-out for instant, short-term gains.
  • It requires a kind of dedication and an eye towards the future while adjusting your expectations and appreciating the present moment as well.

Instead of chasing short-term goals, we need to have patience and enjoy the journey.

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Knowing how to use information to your advantage

Information is freely available. It is everywhere, making it more difficult to know whether the facts are useful or where they lead.

For example, Yahoo has historical financial statements of every public company. Two decades ago, you had to ask companies to mail you hard copies. Twitter creates 200 billion tweets a year, but it barely existed a decade ago.

A first step when dealing with any kind of information is to separate them into different categories.

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