By Danny Callis (firstname.lastname@example.org)
November 27, 2000
I'm not sure what pivotal moment deserves the exact historical reference, but some time ago, civilization fell victim to "instant gratification." It might have come with the invention of instant pudding or frozen dinners. Maybe the microwave is responsible. For certain, the communication industry has delivered much to this effect with the printing press, the telegraph, the telephone, answering machines, pagers, cell phones, caller ID, and thus far, the ultimate: the Internet.
Perhaps not any one invention has accomplished this solely, but nonetheless I still believe that instant gratification needs to be recognized with both good and bad connotations. Some of the above examples have provided great benefit to society. After all, what would Bill Cosby do without Jell-O pudding? What would bachelors eat without frozen dinners? (No offense to men who can cook.) And, just how was popcorn popped before the microwave?
What about Wall Street? Could instant gratification be partially responsible for the chaos occurring this year? Sure, the message boards cite many reasons, like interest rates, valuations, cap ex, elections, analyst churning, you name it... but others have suggested it as the main reason for the debacle that created this "bear market."
Point is, many claim to be long-term buy-and-hold (LTB&H) investors, but studies indicate that more and more investors hold their stocks for shorter and shorter periods as history writes itself. Consider this as an example: Online Trading: Dream vs. Reality.
Let's not forget the teachings of The Motley Fool, Philip Fisher, Warren Buffett, Peter Lynch, Jeremy Siegel, and plenty of others.
The year 2000 will not be the end of LTB&H, just as 1973 and 1974 were not, nor was 1929. Business will continue over quarters, years, and even decades.
Instant gratification is the fool's gold of investing. Let me reiterate something a little more Foolish: put on a Fool's cap and perform your due diligence until you identify companies worth investing in over the long term -- not just overnight. Consider it the road less traveled, but realize it is the trip of a lifetime, full of compound interest, dividends, and so much more.