I’m not a sports fan, but I do think that Wayne Gretzky’s quote has a lot of resonance with my way of thinking and investing.
This is evident on two levels:
- Career: find a career that you’ll love and that is growing in importance or significance. I’ve learned this through my peers, family and family friends that having that foresight can sustain a job and career rather than having it come in fits, starts (and layoffs.)
- Investing (in public shares of business, starting a new business or taking over an existing one/franchise): knowing what the world can become from what it is today is what it boils down to investing. It’s predicting the future. In investing, it’s never more important than to be able to determine what is the businesses return on incremental capital (ROIC) which is even more important to know where the “puck is going”.
It is in the spirit of the “puck” and the second point on investing that I take from François Rochon’s annual shareholder letters from Giverny Capital, where he always posts a post-mortem on his investing commission and omissions. Here at the 5-year mark I showcase how not letting compounding “do its thing‘ has cost me a small fortune.
Gold Medal: Shopify
I never really bought into IPOs and while I knew next to nothing about investing back then, I did know a thing or two about e-commerce and how to spot great technology companies. With Shopify (being a Canadian company listing on the TSX), I had the opportunity and foresight to participate in its IPO (2015) with a small bet.
All I needed to do was just “sit on my ass” as Mr. Charlier Munger would say. I knew how important Founder-CEO’s were and Tobi was/is one of the best.
Well by 2016 I had sold all the shares.
If that doesn’t make my original sin worse is that I bought and sold Shopify a couple more times. All three times I had a (small) capital gain but if I had just sat on my hands in any of those times I would been able to have more capital today.
To put it in numbers the return from holding shares from IPO till now (Dec 2020) would have been ~36x.
I knew where the puck was going but didn’t take full advantage of it.