What Makes You a Sloth Investor? - Vol. 1
On my 100th day on Twitter, some of my followers share the bedrock principles that most strongly resonate with them.
100 Days - Thanks for the support!
The Sloth Investor joined Twitter in March 2021.
June 15th, 2021, marks my 100th day on Twitter.
It has been a pleasure to immerse myself within the FinTwit community during this time, communicating why I believe that the humble sloth is the best, most appropriate animal to characterize successful investing.
Indeed, this unassuming creature from Central and South America represents a compound creation of all that I have learned about investing.
I have been delighted with the warm, positive reception that the Sloth Investor has received during my first 100 days on Twitter. The five bedrock principles of the Sloth Investor resonate with so many other investors, young and old, experienced and inexperienced.
When considering the best way to celebrate my 100 day anniversary, I wanted to defer to my followers to ask them what it is about this mental model; this investing philosophy most resonates with them.
In particular, the Sloth Investor was keen to elicit from his followers the bedrock principles that they identify with the most.
I’m fortunate that so many of my followers have been kind enough to lend their time to share the bedrock principle/s that resonate with them. Therefore, today, Tuesday, June 15th, 2021, marks volume 1, and over the next three days, I will continue to provide more reflections from my followers in volumes 2-4.
So, what follows today is volume 1 of a tremendous series of insights from investors from around the globe.
I hope that you enjoy reading what the first ten investors have to say.
Jason Moser, 48, Virginia, USA
Advisor/Analyst at the Motley Fool
@TMFJMo
“While I appreciate all of Sloth's bedrock principles, "Time in the market" stands out to me in a day and age where it seems "timing the market" is what many are focused on trying to do. Teaching (and learning) patience isn't easy but as individual investors time is one of our greatest advantages so it's crucial we use it. I've watched my portfolio benefit greatly from this very principle through the decades which is why it was so important to me to help get my daughters started investing at a young age so they too can witness the benefits of time as they grow up. My hope is that as they too see the benefits of time on their own wealth, it will make it much easier for them to realize the importance of patience and taking the long-term view.”
Menashe Kestenbaum
President and Founder, Enthusiast Gaming Holdings Inc
@RavMenace
“I actually do resonate with the Sloth bedrock principles. I’m not at all into day trading. If I wanted to do that then I’d go to the casino. I believe in believing in your own due diligence and intuition, ignoring the market’s panic or hype, and waiting it out to get the best results. I saw from thousands of investors in our company that there was a handful who put in a lot of money at the $2 range, then saw it fall to $1.4/$1.50 for a year, but they didn’t sell because they believed in the fundamentals, and then it went up to a high of $10.50 or so. They proved all the doubters and naysayers wrong because they believed in the fundamentals and not in short-term market sentiment. I had to tough it out through that rough period as management as well. Tune out the noise. Come into the office every day believing in our own vision despite the way we were being “rewarded” in the markets for that entire year, and eventually, it paid off for us”.
Ho Nam
Co-Founder and Managing Director, Altos Ventures
@honam
“I love your mental model of the sloth. It slows things down. Simplifies. More patient. Too much activity kills returns. Creates stress. It’s so important to have the right role models and the right mental model. For some reason, you’ve chosen the sloth and I think it’ll give you an edge over the long haul. You will look at the world differently than others. As the saying goes, point of view is worth many IQ points.”
Sam Ball, 25, United Kingdom
TEDx speaker & co-host of The Investor Way Podcast
@thesamball
“Simplicity for me - a lot of people overcomplicate their analysis when the best investments a lot of the time businesses that seem 'obvious' There is a reason Charlie Munger says he has never seen Warren Buffett doing a discounted cash flow I do also really like owning the world as a lot of people focus too much on their local geography. For example, the UK index has done poorly for the last 20 years but by owning the world and indexes from other continents you'd have done very well.”
Brad Freeman
Writer for the Motley Fool
@StockMarketNerd
“To me, patience & discipline are the two most important qualities in an investor. I need the discipline to make sure I’m effectively monitoring company progress via SEC filings/conferences etc. I need the patience to have the stomach for adding when my stocks break but my companies are healthy (which I can only know for certain through the discipline leading me to religiously track these companies).”
Dhaval, 36, Jacksonville, Florida
FinTwit Summit 2021 Organizer
@dhaval_kotecha
“Though all of the bedrock principles resonate with me, I'll talk about a couple of them which I feel strongly about. First up is Simplicity. If I can't explain what a business does in a few sentences, I don't invest in it. Once I chose to invest, I tend to take a long time horizon and DCA into it every 2 weeks rather than trying to time the market based on complicated charts. As Warren Buffett writes in his 1994 letter, "Investors should remember that their scorecard is not computed using Olympic-diving methods: Degree of difficulty doesn't count". Indeed, a simple investing process will most likely beat the most complex process if done in a disciplined way for long periods of time, which leads me to my second bedrock principle, "Time in the market". I've always been a proponent of "Time in the market > Timing the market" and in my experience, the timing game is futile. As Peter Lynch puts it aptly, "Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections than has been lost in corrections themselves". If you try to time the market, you've to get it right twice. And it's almost impossible for anyone to do that for elongated periods of time. So, why even try? I'll leave it here for the readers (below) and I bet this would be the last article you'd want to read on market timing.”
Dhaval’s suggested article: ‘Even God Couldn't Beat Dollar Cost Averaging’.
Austin Vander Meer, 31, Detroit, Michigan
Financial Advisor
@AustoVandy
“My two favorite bedrock principles are Time in the Market & Headstrong. Being a Financial Advisor, so many people think that investing for their future requires to be actively trading all the time. When I reach out to review their portfolio and progress, they almost always ask me what moves I am ready to make. I am constantly explaining that participating in the growth of the economy over many, many years will allow them to beat inflation and taxes and provide for the type of retirement they are planning for.”
Sam Sharples, Montana, USA
@SamSharplesMT
“My favorite bedrock principle is TIME: here's an easy explanation of why. Look at the last 30 years of market returns for the S&P. 23 years it finished positive, compared to 7 years negative. The average positive year was up 15.8% while the average negative year was down 13.4% So, patient investors (with time on their side) are playing a rigged game in their favor. Over the last 30 years, the market goes up more often than down (76% of the time) and the up years are up more than the down years are down.”
Ayesha, 39, Dubai, United Arab Emirates
@ayeshatariq
“The Sloth Principle I like best is TIME because… if a company has the right fundamentals, you will eventually benefit from the long-term story. There’s still the possibility that the story may change and you have to adjust your investment, but at least you’re not playing roulette with your money.”
Dillon, 30, Minnesota
BluSuit Investments
@BluSuitDillon
“Time in the market: Many traders don’t understand that the market works in cycles, meaning that at any point their favorite stocks will fall simply because it has fallen out of “favor” of broader market forces. There seems to be an unlimited amount of factors: Taxes, policies, the Bond market, economic fears, and crazy corona Virus’s. This resonates with me to just be patient and try not to time the markets but use the time I have as a competitive advantage.”
“Headstrong: The market will test you and make you question yourself!! One market you can feel like the smartest person in the world, the next you can feel dumb. But the reason why headstrong resonates with me, you need to believe in yourself and your thesis. If you waver, don’t just sell your stock (especially at a discount). Revisit your thesis, stay HEADSTRONG, and wait.”