I was catching up with a friend who is a seasoned investor and trainer. We talked about the traits of great investors. One common trait that we noticed is that the greatest investors think long term and hold on to their high conviction stocks of great businesses for a long time. Patience goes a long way in investing.
Charlie Munger has this famous quote:
“The big money is not in the buying and selling, but in the waiting
His business partner and one of the greatest investor Warren Buffett also said:
“Our favourite holding period is forever
There is a lot of wisdom in the quotes and I went through my trading journal to do some reflection. I realised that my best performer, a multi-bagger, is a stock I held from IPO to delisting.
Any of you remember Thomson Medical (THOM.SI)? Some quick facts:
- Thomson Medical Centre is a 190-bed private hospital located at Thomson Road in Singapore. The hospital specialises in gynaecology and in vitro fertilisation (IVF). It also runs a 24-hour outpatient family clinic, as well as a range of specialist clinics.
- Thomson Medical Centre was listed on the SGX-SESDAQ board in 2005, becoming the fourth healthcare services provider listed on SGX.
- 29/10/2010: Singapore billionaire Peter Lim offered to buy Thomson Medical Centre for S$513m (S$1.75 per share).The offer is 62% premium over Thomson’s last traded price!
My journey with Thomson Medical
My eldest son was born in in Thomson Medical. In fact, I had such a great experience with the hospital that all my 3 kids were delivered in the hospital.
It was by chance that I stumbled upon Thomson Medical. As young first-time parents, we were excited to find a good gynae. The nurse of our regular GP highly recommended Dr LC Cheng from Thomson Medical (son of founder WC Cheng). We went with the recommendation and never looked back.
Thomson Medical delivered excellent service, which led me to become a shareholder. As a niche hospital specialising in gynaecology and doing what they are best at – delivering babies and provided top notch care to mothers, everything works well like clockwork.
Thomson Medical remains my best performer to date. From IPO till delisting in 2011, the return on investment was a whopping 795%. This excludes the dividends that I collected during the period.
Good investments exist in our daily lives
Many investors always ask where can they find good companies to invest. In fact, we do not really have to look too hard to uncover gems. I discovered Thomson Medical due to the need to find a good gynae and best hospital for my wife. We just need to scout for good businesses that are around us – things we use daily (food, household items, places that we visit).
Simple things done to perfection
Thomson Medical delivered excellent service. It provided a niche service to deliver babies and take good care of mothers. With due respect to the doctors and nurses, they are really passionate about their job and the operations of the hospital works like flawless clockwork.
Do nothing to your good investments
We are often intrigued by trading systems which promise good and quick returns. I always encourage constant learning and discovery but we need to eventually find an investment style that suits one’s personality.
Reflecting on my own journey, the approach that yields extraordinary returns is the simplest one. Warren Buffett and Charlie Munger perfected that approach – picking good businesses and holding them forever.
It is important to keep tab of that “little voice” in us to over-trade and do too much of buying and selling.