A few months ago I wrote Master The Art Of Doing Nothing, in which I argued that, while it may be the most difficult thing for an investor to do, the vast majority of the time an investor should simply do nothing at all. Truly wonderful opportunities don’t come around very often but having the patience to wait for them is what separates the best investors on the planet from the rest.
However, it’s not only the waiting that is critical to success; it is also the courage to act when the time arises. Aside from being too active, another major mistake investors make is simply being too timid, or becoming too comfortable with doing nothing at all and this can be just as costly if not even more so. As Warren Buffett has said, mistakes of omission, or failing to act, have cost him far more than mistakes of commission, or acting when he shouldn’t have.
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