Mission-Focused, Patient Investing

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Jeff’s Random Words

On this week’s podcast, we interviewed Tim Hanson, the Chief Investment Officer of a private equity firm called Permanent Equity. I was looking forward to this conversation because private equity is a thing you hear a lot about in the financial news but it isn't a monolith, as we learned in our conversation with Tim. I won’t go into detail here, but I encourage you to listen to the episode to hear how Permanent Equity has what I think is a unique and admirable take on how to do private equity.

Whenever we have a guest on, especially if they represent a part of the investing world that is different from what we usually talk about on the podcast, I try to find a way to relate it to individual investing. It’s not always easy and sometimes the connections are a bit of a stretch. When I think about our conversation with Tim, two words come to mind; mission and patience.

What I took away from our conversation was that Permanent Equity has a very mission-driven culture. I got the sense they know exactly what they’re looking for in a partnership and they stay within that lane when making decisions. As one example, Tim mentioned they made no moves throughout 2022 because what they were looking for simply wasn’t available. That takes guts and a true understanding of the goals of the business, or put another way, the mission of the business.

Waiting for a year or more to make a move also takes patience. Patience is a much easier concept to connect to individual investing. Just this week, as I watched the market fall day after day, I was reminding myself that patience is paying off as many of the companies I have high conviction in are slowly coming back down to earth in terms of their valuation. I don’t know where the market will go tomorrow, next week, or next month, but if it continues to sink, I hope to be more prepared to capitalize on it than I was in 2022.

I don't think we as individual investors need a mission, necessarily. However,  I do think it’s worthwhile to remember that we all should have a goal(s). “Why am I investing?” is a question I try to constantly ask myself as a way to keep focused on my goals and not the day-to-day movement in the market or my portfolio.

Mission-focused, patient investing has a nice ring to it. I think it’s a nice tool to add to the investing toolbox. Before making investment decisions, I am going to try to ask myself if what I am contemplating aligns with my mission and ask myself if I am being sufficiently patient. When I look back at my mistakes, I now realize that the answer to one or both of those questions was “no”. And if there’s one thing I’ve learned over the past four years it’s that avoiding mistakes is an important part of successful investing.


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