The Dark Room of Investing Success | Warren Buffett

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Growing up in the 90s, and before digital cameras became common, one of my most precious possessions was a Kodak roll camera.

It was a simple box camera that came loaded with a 36-exposure roll of film (if I remember that correctly). When the roll was finished, the camera or the roll was handed to a photo studio for processing.

My friend’s father had a photo studio that was one of the best in town and where I got my photos developed. The studio contained a dark room (called ‘darkroom’) that no one was allowed to enter, which was typical of any photo studio those days.

In fact, as I understand, darkrooms have been used since the early 19th century to process photographs from films. However, they have almost become extinct now, with the advent of digital and print photos.

The current ‘instant click and upload’ generation would never know of a photographer’s darkroom, or the degree of excitement it generated for someone awaiting his ‘developed’ photos and to know how many got clicked well (there were no reviews that a film roll camera offered us to delete photos that did not come out well; whatever got clicked got developed).

The darkroom process was long. It sometimes took hours, sometimes days. Also, as the name suggests, the process had to happen in the dark, because the light would destroy the image on the film. And so, it was only an experienced photographer who knew how to develop those photos well, how much darkness was required, and for how long.

For me, the darkroom meant days of waiting. I was not as patient then as I am now but having experienced ‘waiting’ for most things in life as a middle-class Indian, this was not much of a wait anyways.

When I look back at those days, and to those darkrooms that gave me some of the best memories of my childhood in the form of nicely developed photographs, I can appreciate how most good things in life must have to pass through their own ‘darkrooms’ to ‘develop well’ and before ‘seeing the light’ of the day.

Let’s consider investing.

The benefits of waiting, and of patience, have long been documented in the annals of investing history, through the experience of some of the best investors the world has seen. Despite that, and despite the fact that humanity, on an average, has gotten more intelligent over time, we seem to be getting more impatient as years pass.

As per data from NYSE, the average holding period for stocks that was around 8 years in the 1960s, has shrunk to 6 months now. I believe even this 6 months holding period is an over-estimation. I see most people holding onto their stocks for just a few weeks at the most.

Many of us, many of the time, want results “now,” instead of wanting to wait. For many of us, we do not want to have to go through the process, the journey, the uncertainties, the darkroom. We just want to see the light and arrive at the end destination. Even more, we think it’s unfair to wait.

But the more I read about the best of investors – both known and little known – the best investment results over the past few decades have come to those who have waited through their versions of darkrooms, working on their processes and giving their ideas appropriate time to develop before reaping their returns on investment.

Yes, dear investor, investing has its own darkroom. And the people who pass through it successfully are those who have a process, and the patience to go through that process that cannot be hasten through (like developing a good photograph through the darkroom process cannot be hastened through and takes its own time).

Every time you avoid selling your stocks even when others are selling theirs or the markets are crashing, because you are investing with a process and have your eyes on the long run, you are going through your own version of the darkroom.

We never reach our goals, including financial goals, without taking steps that prepare us along the way. Some of those steps are going to end in failure, but they will teach us.

Something to remember is that progress is progress, no matter how small, and no matter how many darkrooms you have to pass through on your way.

And when you are passing through one, remember that’s where your personality as an investor – like the camera roll photos – is getting ‘developed.’

That should keep you equal and make that passing calmer, even when others around you are losing their heads.

Thank you for reading.

Stay safe.

~ Vishal

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