You can contact the author (Teguh Hidayat) by email, The author live in Jakarta, Indonesia.

See my activities in Instagram, @teguhidx.

How to Build a Passion in Investing

In this Sunday, since my wife took our children to watch the ‘Agustusan’ (Indonesian term for a various of fun races in commemoration of independence day), while I myself is less interested to join any races, so I stayed at home, spending my time by reading any writings on the internet. In addition to reading everything about the world of financial especially about investing in the stock market, I also like football, culinary, and especially: History. If there is a test in which I should mention the names of Emperor of the Han Dynasty in China, then I would be able to answer it completely, ranging from Emperor Gaozu as the founder of the dynasty, until Emperor Xian as the last. From this, I got the idea to write this article, which hopefully can give you a little inspiration.

Like I said before, I do like history, it is a very enjoyable reading. You would feel as if you are flying across the space and time, to see all the places and events, ranging from the reign of King Menes in Egypt in 3000 BCE, until the landing of allied troops on Omaha Beach in Normandy on the event of World War II in 1944. Even just by reading the history, especially if it equipped with images and videos, then you will be able to imagine about how a historical event occurred. This kind of experience is almost as fun as to go on vacation to places you've never visited before, like adventuring around the world, but even more remarkable because you’re not only exploring the world, but also exploring the time to the past.

And as an investor in the stock market, this hobby of 'adventure' is apparently giving a lot of advantages, for example:

1. Make you young

Do you feel that the older you are, the faster the time goes? There is an explanation about that: Time will run faster if we keep doing the same routine things, things that we have done before. When a child is born into the world, he will experience a lot of new things which he had never experienced before, like learning to walk, talk, drink milk, eat rice with the dishes, and so on. Almost every event experienced by a toddler is a new event that he experienced for the first time, and that's why the age of zero to six years is the longest period in the life of a human being.

Entering the age of 6 years, a child will begin to undergo some routine schedules, like to go to school every morning, but he still will have a lot of new events and experiences, such as falling in love for the first time when he was a teenager. In the age range of six to twenty-one years, a person will experience a combination of new and old (routine) events in his life, where these routines make the time to run faster. As a result, most people will feel that the length of time when he was aged between 6 - 21 years, is approximately the same as when he was aged 0 - 6 years.

When a person growing mature, he will have many more routines, such as have to go to the office every day, trapped in traffic jam every day, see the same people every day, and so on. In this period, a person, if he does not try to do new things but continue to sink into his routines, will begin to feel that the time is running very fast and boring.

And if the time was running too fast, then you will be aging faster although by the number of your age, you might still relatively young.

To prevent it, you can do new things every day, or at least every week, every month, or every year! Examples? By visiting new places in that you've never visited before, trying new restaurants, sleep at hotels (make some variations, get out of your bedroom), meet new people you've never met before, and so on. If you have extra budget, you may fly around your own country, or around the world, including try fried insects in Vietnam, or see lions in South Africa. And so on.

Aaaand if you do not have enough time to do it all, then you can do your adventure by way of reading. Reading what? Well, anything! With the internet, you do not need to come to the bookstore to read. Using your computer or smartphone, you can just read something new, watch the video you've never watched before, and so on. Like I was doing today, I just stay home to read history in Wikipedia, and it makes me feel to experience new things, in this case: Just know that the descendants of Napoleon Bonaparte is still being the unofficial ruler in the French Empire. The more you read, the more ‘just knows’ you’ll get.

And trust me, in term of making us become ageless, it works! I myself, every time I meet people, they usually ask about my age, because my face looks so young, while in fact I was not as young as five years ago. A friend of mine once say, ‘When you wearing neat shirt when filling the class, you look mature. But now after changing to T-shirts, you look normal.’ Well, I think that ‘normal’ here is interpreted as young. Because when I appear in the front of the class, everyone was calling me 'Sir'. But after I wear T-shirts, they call me 'Bro'.

So what is the correlation between this ageless thing with our work as investors? Well, when you are physically younger, so are your soul. And a soul that is young is identical with the spirit and passion, a passion to continue to move forward, to achieve something that we have dreamed, and then work hard for it. No matter how old you are, but if your soul are young, you will always eager to move forward, where there are many adventures that will await for you in the future.

And as an investor, the desire to 'keep moving forward', to not easily be satisfied with any profits obtained and also, not quickly disappointed when you suffered a loss, is a very important ‘fuel’ to grow the value of your investment portfolio. Believe it or not, in his latest Annual Letter in 2013, Warren Buffett wrote that in the next year, when he officially manages Berkshire Hathaway for 50 years, he would write about his predictions on the investment performance of Berkshire in the next 50 years. I believe that Buffett was absolutely aware that he may not still alive in fifty years from now, but even it did not prevent him to continue to move forward, in this case the next 50 years! And that's what I meant by passion, which is only owned by people who are young at heart, no matter his age. Sounds great, eh?

2. Make you have deep insight and knowledge

If you love to read, then you will certainly know a lot of things. And as a stock investor, when you can enjoy the experience of reading the documents about the company that you are interested to buy, then you will know everything about the company, including the sector. So if you later decide to invest in its shares, you will have a strong confidence, because your decision is supported by the full information. There are many cases in which an investor suffered losses due to panic where he immediately sell off his shares when the price was down, because he did not know about the stock in detail, in this case the company, whereas the detailed information about a company can be derived from the financial statements, annual reports, prospectus, and other related documents.

And when I said that you should 'enjoy' reading documents related to the company, I meant it. You should make the habit of reading as a something fun instead of a boring job, which makes you experience another ‘just know’.

The human brain is designed to be able to accommodate as much information as possible, especially if the information is valid, like the data and facts of the company's financial performance in the past. So you do not have to worry about headache or something if you read too much. In fact, if you rarely read, then your head will filled by bad thoughts. I have acquaintance of a retired employee who is not too old (still in his 50’s), who spent his days by staying at home without doing or thinking about anything, which cause him to thinks that he was ill, and the results, he is actually fell ill.

While Buffett, he could still hale and hearty at the age of 83 years, and that's because he spent about 4 hours every day just to read.

3. Make you have a good ability of imagination

Well, this third point is perhaps the most important points. When you read, say, a story of history, then your mind will fly away. When I read about the story of a particular war, and if the course of the war were written in detail, I will be able to imagine as if I participated in it. And that's imagination. The more often you read about anything, the better your ability to imagine. One of the best books ever written, namely Harry Potter, is able to make the reader thinks as if he was in the castle, see the main character is swinging a magic wand, and so on (so if you want to train your child's ability in imagination, then give him the Harry Potter novels).

And imagination is very important, including in helping our job as an equity investor. Just a small example: Can you imagine, that someday the Jakarta Composite Index (JCI), although it may take many years from now, will break 10,000? When you buy a certain stock at a price of 1,000, could you imagine that the stock will go up to 1,500, 2,000, 3,000, and so on? If you can not imagine it, then why did you bought it??? And last, most important, can you imagine that the value of your portfolio, which is still small at this point, would be large someday?

Imagination is the root of the event that will actually happen later. Not all imagination or ideals would be a reality, of course. However, if you cannot imagine a thing, then how could you possibly make the thing to be a reality?


The combination of passion, insights, and the ability to imagine, will eventually helping you in arranging your investments in stocks, and even perhaps: In all areas. And all of it can be achieved only with a single tip: By reading. When you are able to make reading as a lifestyle, when you already think that reading is an adventure rather than something boring, when your mind has been filled with a lot of knowledge and helpful information instead of waste thoughts, then that's when you've ready to be great, whether it's as an investor in the stock market, or whatever your field.

And with the advances in technology, you do not need to spend a while for reading, as you can read anywhere, anytime. Armed with a smartphone, I prefer to read the articles on Wikipedia (and Investopedia) at night before bed, when I sit in the bus, when sitting in a cafe waiting for a friend to come, or when just stay at home like today.

However, please distinguish between reading through the internet with useless browsing. Many people only use their smartphone only to access the Facebook, talking about nothing in chat room or forum, or play Candy Crush, and it certainly is not productive. So from now on, you can make your smartphone more useful by use it to read, not only about the stock market, but on any topic you are interested. What? You are still confused where to start reading? Well, do not worry, you can start by reading articles that are presented on this website. Try to point your cursor to the right, there is a lot of old but still relevant articles to read.

Hufftt, okay, I think that's enough, I'll see you again next week.

No comments: