Guy Spier: The Power Of Doing Nothing | The Acquirer's Multiple®

In this interview with Investing With Tom, Guy Spier discusses the power of doing nothing. Here’s an excerpt from the interview:

Spier: Any case I couldn’t think of anything else, and eventually the pressure came too great for me and I sold the shares at two dollars a share, and felt so much better afterwards because the position was cleared out, and I didn’t have to think about it anymore.

That was that, and I tried to forget I ever owned it, and tried to forget that I ever bought it. Five or six years later I discovered that Chieftain Capital Management owned shares of the company.

I don’t remember the name of the guy leading it. Kind of like buy and hold long-term investors. In any case the results for the company were that it was more… from the two dollars a share it ended up at more than 100 or 200x.

Perhaps even more. It’s too painful for me to do the study. The most profound fact about that is that if all I had done was done nothing.

If I just held on to my shares at eight dollars a share I would have made a lot more than 20 times my original investment, 20 times.

My original analysis was right. All I had to do was sit there and do nothing, and I failed to do that.

So in retrospect did I pay too much for the company? Perhaps at that particular moment. And I bought into the flush of excitement at the merger. And the fact that Lou Simpson had bought a bunch of shares.

And I was… I bought in the midst of enthusiasm but then I doubled down on that mistake by selling it at the wrong time.

I think that many investors right now are waking up to realize that they’ve made the mistake of overpaying. But I think that in many cases that I know of they’ve actually bought into some extraordinary businesses.

And what Charlie Munger says is that often the pain in the markets happen not because of a bad idea because of a bad idea but because of a good idea that was taken too far.

You can watch the entire discussion here: