Patience Vs Intelligence: What is the Most Underrated Investing Skill?
In a world obsessed with speed, have we forgotten the value of waiting?
When we think of successful investors, intelligence often takes the spotlight.
But here’s a provocative thought: What if patience, not IQ, is what truly builds wealth?
As legendary investor Warren Buffett once implied, success in investing isn’t about making smart moves quickly; it’s about making wise moves and letting time do the heavy lifting.
Most people associate Berkshire Hathaway with Warren Buffett and Charlie Munger.
But in the early 1970s, there was a third key player: Rick Guerin.
All three had razor-sharp minds and deep knowledge of value investing. But Guerin made one mistake: he borrowed heavily to invest.
When markets crashed nearly 70% in 1973-74, margin calls forced him to sell his Berkshire shares to Buffett for under $40 each.
Today, those same shares are worth nearly $740,000 apiece.
So, what happened? As Buffett put it: “Charlie and I always knew we would become incredibly wealthy. We were not in a hurry. Rick was just as smart as us, but he was in a hurry.”
Being in a hurry cost Guerin not just money, but a legacy.
You’ve probably heard of compound interest being called the “eighth wonder of the world.”
Even if Einstein never actually said that, the sentiment still rings true.
Compounding allows investments to grow exponentially over time.
But here’s the catch: you need time and patience for it to work its magic.
An investment growing at an average annual return of 8% will double approximately every 9 years.
The longer you stay invested, the more you benefit from this exponential curve.
Let’s take a simple example. Suppose you invest ₹10,000 at an average annual return of 7%:
| Holding Period | Future Value (@ 7%) |
|---|---|
| 10 years | ₹20,000 |
| 20 years | ₹40,000 |
| 30 years | ₹76,000 |
Shocking, right?
What seems like slow progress initially becomes massive over time.
This is the snowball effect of compounding – silent, powerful, and transformative.
Are you tempted to borrow money to invest?
It might work out if the market goes your way.
But what if it doesn’t? Adding leverage to volatile assets is like pouring kerosene on a fire.
Yes, the flames rise quickly, but so does the risk of getting burned.
Guerin learned it the hard way. He used leverage in a crashing market and had no choice but to sell.
That’s the problem with leverage – it robs you of control.
Benjamin Graham wisely said: “In the short run, the market is a voting machine, but in the long run, it is a weighing machine.”
In other words: Don’t be in a rush to impress. Be in a rush to last.
Financial markets naturally fluctuate. Economic news, wars, inflation, elections – the list of disruptions is endless.
How do patient investors deal with it?
They develop psychological discipline.
They don’t obsess over daily news or portfolio values. They resist the urge to follow the herd.
They make decisions based on fundamentals, not fear or greed.
“Temperament is more important than intelligence.” – Warren Buffett
It’s not about how much you know. It’s about how well you handle emotional triggers.
Did you know long-term investments are also tax-efficient?
In India, if you hold equity investments for over one year, you pay lower capital gains tax compared to short-term holdings.
This means the government actually rewards you for being patient.
This tax advantage can significantly boost your returns over time, especially for SIP investors and long-term portfolio builders.
Let’s go back to Buffett again: “If you’re even a slightly above-average investor who spends less than you earn, over a lifetime you cannot help but get very wealthy – if you are patient.”
You don’t need to beat the market every year. You don’t need to be a genius. You just need to stay the course.
So the real question isn’t whether you’re smart enough to succeed in investing. It’s this:
Can you be patient enough to let time reward you?
Remember:
Patience isn’t just a virtue in investing – it’s your most valuable skill.
Listen to this article Regulated, pure, exchange-traded — and you can actually hold it in…
Listen to this article Chasing a corpus target someone else set for a life you…
Listen to this article For millions of salaried employees in India, retirement is not just…
Listen to this article What if financial freedom did not require working continuously until the…
Listen to this article For many high-net-worth investors, Portfolio Management Services (PMS) carry a certain…
Listen to this article For millions of Indians already struggling with rising living costs, uncertainty…