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waiting at the airport

Delayed Gratification and Investing

Sep 11, 2023   Category: Advice, Compounding, Nick Sleep letters, Warren Buffett

You’re probably aware of the Stanford Marshmallow Experiment by Walter Mischel. In a room, he would present a kid with a marshmallow. He told them they would get the marshmallow plus another treat if they waited for 15 minutes. Then he’d leave the room.

The kids who agonized their way through 15 minutes of waiting had better life outcomes. They had better educational attainment, higher SAT scores, lower BMI’s, etcetera. Not to mention they’d get their marshmallow plus a treat! All they had to do was wait.

Standing in lines. Sitting in traffic. Waiting in the… waiting room. Life would be more so much better if we didn’t have to wait. What makes waiting so difficult?

Walk vs Wait

In this video, Senior User Experience Mustafa Kurtuldu of Google explores the topic of waiting. He discusses an experiment done by an airline where they reduced customer complaints about waiting for luggage after arriving.

Initially, they looked at ways of speeding up the process of moving luggage from the plane to the terminal conveyor. However, the process was already at max efficiency. What they ended up doing contradicts common sense. They docked the plane at the gate furthest away from the conveyor.

Now, instead of looking at an empty, motionless conveyor and getting angry passengers were using that time to progress towards their goal… by walking. So how does this apply to investing?

Making money in the stock market takes time. I’ve written other articles on how starting young is the nearest thing to a guarantee in investing success. However, you’re going to be waiting… for (no joke) decades.

Less is More

In his letters to his partners, the famous investor Nick Sleep talks about how waiting is one of the reasons for his success. The most famous investor of them all, Warren Buffett has been quoted as saying, “wait for the fat pitch.” Here’s a great website with dozens of quotes from famous investors about waiting.

Mastering the temptation to “do” something… anything… is one of the hardest parts of investing. Unlike changing which gate an airplane docks at, there’s no easy way to give an investor the illusion of progress.

If there is, ironically, a shortcut to learning how to wait, I’ll be sure to post it. Until then, consider Blais Pascal’s thoughts on waiting when he said, “All men’s miseries derive from not being able to sit in a quiet room alone.”