Why is churning in the portfolio rare?
“कोई नया stock बताओ”
(suggest a new stock)
This is a common curiosity amongst investors.
But finding a new stock which is fundamentally strong cannot be a frequent activity.
Reason is simple: Can you figure out a new business to start every few weeks/months, in which you will spend your time, money and efforts?
Not realistic, right?
Same is with Stocks.. there is a business behind each stock..!!
We have been passive in our investments for many years now and wish to remain as passive as possible going forward as well.
This has worked for us very well, in terms of generating sustainable returns.
Investments are meant to be boring. Entertainment and excitement have got a cost.
When asked how long should you hold a stock, Warren Buffett replied, “Our favourite holding period is forever.” He added, “if you do not feel comfortable owning a stock for 10 years, you shouldn’t own it for 10 minutes.”
Another relevant quote here is from Paul Samuelson “Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.”