Learning to Watch Paint Dry

I guess you could say my investing journey began in 2020. While scrolling on the social media that I no longer have (I highly recommend cleansing yourself of it) I saw time and time again how much money people just like me were making while day trading. Surely it was easy as they said it was. Young twenty year olds were making millions in seconds. Anyone could do it! Right? Right? Wrong.

I deposited $500 into my newly minted Robinhood account. Man was I excited. I was going to be rich! It took all of one week for me to realize that was $500 I could not afford to lose. I didn't make a single trade because I was terrified to lose my money. Looking back on that I am so grateful that there was some little inner voice asking me "What the hell are you doing?" I don't know where it came from but it was there and I listened to it. Out came the $500 and back into my bank account. I didn't touch Robinhood again until 2024.

A slightly more mature me began to understand that creating wealth was going to require some form of investing. Although I had grown up a little I hadn't grown up enough. Once again, I was drawn back to Robinhood. This time I had some money that I was willing to risk and I made my first purchase in Super Micro Computer. They had just come off a significant crash following a meteoric rise from about $330 a share to over $1200 before falling back to about $450. All of this happened in about six months. According to the headlines, which is unfortunately where my information came from at this point, it seemed that Super Micro Computer had potential to return to the astronomical prices it called for a couple of months prior.

After purchasing I was glued to my phone. I had every intention of selling once the stock rose again because at this point I had no grasp on the concept of long-term investing. The price went up a bit, went down a bit, back and forth, over and over again. Each time it dropped I experienced significant doubt. Every time it rose, total excitement. It was an absolute rollercoaster and within a couple of weeks I sold breaking even. It didn't feel good or right.

Naturally I decided I needed some kind of system to combat the emotional volatility. I developed a mathematical plan to buy a stock and sell once it reached a certain percentage in gain. Of the gain I would pocket 40% and reinvest the remaining 60% into the next stock. Long story short this strategy didn't last all that long either. The common theme here is that never once was I thinking long-term. I was picking companies based on what I thought their performance would be in the near future. I anticipated making a gain and selling. The strategy was employed for a couple of months with no real success. Luckily there was no significant loss either.

During that time I had begun stumbling across recordings of Warren Buffett and Charlie Munger at their famed Berkshire Hathaway Annual Meeting. With each video I grew more infatuated with the simplicity of what they were saying. Buy great businesses at fair prices that you can theoretically hold forever. Buffett's famous punch card analogy shifted my entire perspective. You get twenty punches over the course of your life and each investment made was worth one punch. You're going to put a lot more thought into each shot before pulling the trigger.

I moved some of our money into a handful of mutual and index funds while making occasional single stock purchases. The funds became my training wheels while I continued to study the two icons. It allowed the money to begin working for me without having to spend a substantial amount of time researching stocks themselves.

We had a large amount of cash relatively speaking that was uninvested at the time of the market downturn when President Trump began his tariff crusade in the spring of 2025. My wife and I decided to invest the majority of our cash into the market, primarily into the group of mutual/index funds we already held. This was my first taste of the fruits of buying when everyone else was selling. Only a month or so later the market rebounded and this time I held.

Admittedly, I constantly reevaluated the weights of each investment. In the beginning I just wanted to do, do, do. The urge to move money constantly was very difficult to resist and often I succumbed. I still do. There was a slow confidence building in my analysis of businesses. As time went on I started understanding the basics of a strong business. In a way this was dangerous. As any investor would tell you, no matter where they are in their career, the learning doesn't stop. That means the mistakes don't stop. Of course the goal is to minimize mistakes but it is impossible to completely avoid them. There are multiple businesses that I made investments in because I jumped at a seemingly strong balance sheet or attractive free cash flow. I anticipate I will make plenty of premature investments in the future, but I hope I don't repeat the same mistake more than once.

Mohnish Pabrai has famously said great investors are really good at watching paint dry. In other words we need to be content with doing nothing. That doesn't mean stop researching and reading, but it does mean let your decisions have time to blossom. Investments may not move in a positive direction for weeks, months, or even years, but when the time comes I want to make sure that I'm still on the wagon.

Over the course of the last year the percentage of the portfolio in single stocks has grown as I have become more confident in my ability to seek out quality investments. During that same period of time I have read eight books on investing and psychology, listened to a handful of audiobooks, listened to more interviews and podcasts than I can count, read hundreds of thousands of pages of annual reports, and attended my first Berkshire Hathaway Annual Meeting. After all that I have come up with a few key takeaways, all of which I believe should be applied to every day life.

The mindset needed to successfully invest is foundational. Think in the long-term. Look at the big picture. Fight the instinct to move with the herd. Don't participate in things you don't understand or have an advantage in. Most importantly, know that it is impossible to know everything. Learn how to recognize the things you don't know.

Every time I think I'm starting to get the hang of analysis, I am met with something that can completely derail what I previously thought I understood. I think I am learning to embrace that.

Austin