Gary Belsky – Long-Term Patience Is the Key to Success in Investing

BIO: Gary Belsky is co-author of Why Smart People Make Big Money Mistakes—And How To Correct Them: Lessons from the Life-Changing Science of Behavioral Economics and the former editor in chief of ESPN The Magazine and ESPN Insider.com. STORY: Gary waited for seven years to invest in the Berkshire Hathaway stock hoping the price per share would drop. He missed out on the compounding for the seven years and earned a 14% return instead of 18%. LEARNING: A stock isn’t cheap because it’s $5. A stock is cheap if the Price-to-Earnings ratio is low.   “In the short run, people regret actions, but in the long run, they regret inactions.”Gary Belsky  Guest profilehttps://www.linkedin.com/in/garybelsky/ (Gary Belsky) is co-author of https://amzn.to/3FGV8cN (Why Smart People Make Big Money Mistakes—And How To Correct Them: Lessons from the Life-Changing Science of Behavioral Economics.) The former editor in chief of ESPN The Magazine and ESPN Insider.com, Belsky is president of http://www.ellandroadpartners.com/ (Elland Road Partners), a storytelling consulting firm based in New York City. Worst investment everGary was working for Money Magazine when he got assigned to write a story about Warren Buffett in 1992. As he researched the story, Gary got convinced that Buffett was an investing genius. This convinced him to invest in the Berkshire Hathaway stock. However, the stock was selling at $8,000 a share at the time. Gary decided to wait for the stock price to go down. He invested in the stock in 1999. Had Gary invested in the stock in 1992, he would have had an average annual return of about 18%. But since he waited until 2009, he only got a 14% average annual return. Over that period, the market was up by about 9%. So he still outperformed the market, but he also missed the compounding between 1992 and 2009. Lessons learnedA stock isn’t cheap because it’s $5. A stock is cheap if the Price-to-Earnings ratio is low. The way people lose money in the stock market is not nearly so much about making bad invest