No clock (The Financial Athlete #16)

In the popular team sports of basketball, soccer, football, and hockey, teams play not only against each other, but against the clock. Take a big lead with several minutes remaining and let your star players relax as the bench warmers close out the game. Not so with the bound to no clock baseball, for which Yogi Berra famously said, “It ain’t over until it’s over.” It’s easily conceivable to be up a comfortable 7 runs in the 9th inning and yet lose the game.

Are you an investor subject to the clock? Stated another way, did you set a short-term deadline to get a high return-on-investment? If yes, you’ve put yourself in a pickle. In case you don’t know, a pickle is a baseball term to mean a runner is trapped between two base players (for example, 2nd and 3rd base position players) who throw the ball back and forth to each other until the nearer player tags out the runner.

In the real world, business progress and real estate development often take longer than anticipated by leadership, sometimes much longer. It’s not uncommon for investors who had made no allowance for long delays to lose patience and sell at a loss. Some sell because they cannot afford to hold longer due to pressures of their own cash flow needs. It’s a shame to see an investor make the right long-term choice of investment but sell prematurely because progress is slower than his predetermined time line.

Play free of the clock. Eliminate arbitrary time lines, whether established by you, management, or the developer. If time is not on your side, you’re overweight on your investment.

“We don’t get paid for activity, just for being right. As to how long we’ll wait, we’ll wait indefinitely.” — Warren Buffett


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