In a world where we’re always on, doing nothing is sometimes the best thing an investor can do with his time. Many top investors have been known for their almost isolationism. Here’s why doing nothing is good for investing.
I once read an article about Tiger Woods, where he said he doesn’t remember most of his best golf shots. He claims that he is at his best when he can turn his mind off and just let the training take over. His body knows what to do, his mind just gets in the way. The same could be said about investing.
There is something in the back of the best investors minds that is hidden and can not be accessed by demand. This black space is where all the information that has come in is processed and parsed together. The outcome is often a clearer prediction about the future.
Unfortunately for many investors, the idea that if we’re not doing something we’re not begin productive has limited our brain’s ability to run this important process. That’s why doing nothing is good for investing. For me, the best process looks like this:
Take information in. I must be present in life in order to digest the information I need to make sound decisions. When my mind is cluttered with things to do, I miss important information. To ensure I’m able to take in information, I use Nozbe to clear my mind of distraction.
Escape so I can think. Whether hiding in an office or getting out of town as Fred Wilson has done recently, space is key to being able to think. See Fred’s thoughts on the how doing nothing is good.
Process the information. Warren Buffet spends 80% of his time reading and thinking, saying “I just sit in my office and read all day.” Once the information is in, let the brain process it.
Interpret the output. Once your brain has processed the information, the answer tends to slide down to the gut. Your instincts will tell you what to do. When the feeling is light, you can ignore it. When it’s cloudy, don’t act. Sometimes though, it’s a resounding call to action. These are the “ah ha” we all long for.
Being engaged 24/7 limits your natural ability to process information and interpret it well. These are critical skills for an investor. Learn to do nothing and let the answers, ideas, and predictions, come to you. This is the only way you’ll find clear answers.