I received this email from vikas and thought of putting a post on it.
I had a very quick qn for you. How do you manage to find time for your daytime profession, your family and your value investing hobby? Please give me some examples from your daily life. I find myself in a very similar position and I find myself unable to spend anytime learning value investing?
This is an important question, especially for non professional investors like us. Most of us, having a day job, do not have the luxury of being able to spend 8-10 hrs a day reading, analyzing and visiting companies for our investments. So how do I go about it? It is neither a prescription nor some approach, just an idea of what I do.
Lets invert the problem. With limited time, what can I ‘not’ do?
- Cannot track stock prices, volumes etc on an hour by hour basis
- Cannot trade short term, as I may not be able to execute the trade at the right time due to other commitments.
- Cannot analyze more than 30-40 companies in detail or more than 1 or 2 companies per week.
- Cannot track market gossip, chatter, inside news etc.
- Cannot devote more than 10-15 hrs (max of 20 hrs) to investing
With the above constraints in my, I have adopted an investment style, which matches my situation. As regular readers of this blog would have realized, I typically analyze and invest in a limited number of companies. I run a few screens to generate a list of decent ideas, analyze those ideas in detail and invest in a few for the long term.
In addition, I spend 2-3 weeks analyzing a company in detail and build my position over the next few months.
A professional investor would typically be able to devote 50-60 hrs per week on investing. However due to a day job, family and other time constraints, I am able to devote a maximum of 15-20 hrs per week (on average).
I spilt this time between learning value investing, reading up on companies and on this blog. Almost 50-60% of my time is spent on reading up on companies and following my current holdings, 20-30% on learning value investing and the rest on this blog (10-15%).
The other reason for being able to devote 10+ hrs per week on investing is due to the fact that I have no other hobbies or interest (other than watching movies). So I am a pretty dry person with limited interests outside investing :)
I am not able to devote 10-20hrs per week every week. There are weeks when, due to job and other constraints, I am able to devote only a few hours a week. During other times, when work is slow, I am able to put more time into investing. In addition, I use my spare time, travel time etc to read books and annual reports.
I have been doing this for the last 10+ years and although the time spent per week or month is small, the learning accumulates over time. The initial few years were spent in learning the basics and there were several times when I felt, I was not making much progress. However over time slow and steady progress adds up.
I eventually plan to invest professionally. The main reason for that is that I am passionate about it and would like to spend more of my working time on it.
The best person to answer the question would of course be my wife and kids who typically see me with a book or on my laptop reading something or engrossed in my thoughts thinking about some investment idea :). Of course my wife does not read this blog …so I am safe!
I think the key to finding time is how passionate or interested you are about investing. Paradoxically if you love the process of learning and investing and are not into it just for the money, you will find time and will enjoy the journey more than the destination (returns in this case).
Added note: I have switched the feed to this blog. There is a re-direct of the old feed to the new one in place. I would appreciate if some one can leave a comment if they are reading this post via their feed.
Next post: How do I plan for investing (if I feel there is interest in the topic)