Possibly Profitable Patience

Pardon me an old man moment. Kids, slow down! Oy! OK, back to the show. Patience is useful, a hard task for some, and changes with time and age. It is also possibly profitable. 

Yep, another stock post with some real estate included, which also means writing about MVIS because it has become my long term example.  

Sometime in April, #MicroVision is expected to announce good news about their LiDAR product. For $MVIS shareholders, browse back through the blog for details. When MicroVision announced that they would announce the product the stock jumped. For months (years?) management has talked about possible buyouts. Another reason for the price to rise. Recently, Microsoft (not MicroVision) announced an initial order of ~$22B for their new Hololens/IVAS (augmented reality) headset. Another reason for optimism. Up, up, up. From ~$0.15 in early 2020 to $23.72 in February 2021 (irrational exuberance?) to $18.55 at the end of March 2021 to, to, to, – down down down since the beginning of April 2021, to $11.03 April 16, 2021. 

Google Finance
Google Finance
Google Finance

Where’s the news? Where’s the news? We want the news! Oh no, maybe there’s no news. What if there’s no news? Why won’t they say anything? 

Many new MVIS investors have been Long, i.e. holding the stock without selling, since the last few months. For someone new to investing, such a lack of information can be worrisome and exhausting. 

I am one of the reasonably Long Long investors. Others exceed my twenty years of holding. Throughout MicroVision’s history the cycle of lack of progress, tons of guessing, scraps of good news, excuses about competition sensitivity and NDAs, and – be told to expect good news within a few months, or several months, or at most a few years. 

This time looks different, though.

That’s a test of patience, and with no guarantee of success. Ironically, in modern American finance, waiting decades isn’t rewarded directly. The benefit comes from seeing an opportunity and getting involved before the crowd rushes in. Waiting rarely takes decades because most companies can’t last that long. Most investors can’t wait that long, either. But, the shareholders that buy the day before the big news or the big news are the ones who can make the most money in the least time. The risk is that the stock can rise faster than a buyer can act. 

Unfortunately, it is usually difficult to predict that timing so investors/speculators like me buy in early when the company is small and sell after the crowd arrives. Buying early can mean putting up with people laughing at you. Successful selling can mean suddenly people laughing and celebrating with you. It all worked in my favor for the laughter at: a company that will sell coffee, a company that will use computers to make movies, and a company that had the silly notion that people might want to visit the internet. Thank you, SBUX, PIXR, and AMER/AOL. But it can also mean a long wait for a lack of results from an online bookstore that didn’t understand online, a solar power company that almost hung in long enough, and a satellite communications network that understood technology but didn’t understand debt. Barnes & Noble, Real Goods Solar, and Iridium had good ideas but were either too early, not adaptable enough, or underappreciated the debt required to be a first mover in a new industry. (Additional details in my book: Dream. Invest. Live.)

Fortunately, a stock can only go down 100%, but can rise tens of thousands of percents. 

(Triple Whammies happen, though. Update scheduled for August.)

Long term investing can be simple and easy. Buy. Wait. Check on occasion. Sell at the right time, either to get out before the bottom or as it approaches more positive goals. The waiting, however, seems simple until the waiting begins to exceed the available patience.

Patience is personal. How long is a person willing to wait for anything? I look forward to getting back to running (marathons), bicycling (coast to coast), hiking (across Scotland and throughout Washington’s mountains), and such. I’m a writer and a photographer, usually of twelve month projects. I’d rather transplant from something already growing on my property and wait a few years than buy from the nursery and rush home to plant it. If I had a larger lot without rules about tree heights I’d plant a lot more trees, and wait. Evidently I think long-term.

For years, house prices were depressing. Now that I’m a real estate broker (required disclosure: I am a broker with Dalton Realty, Inc. on Whidbey Island http://whidbeyrealtor.com/) friends are asking me about how much their house might be worth, and are then surprised and sometimes disbelieving that their house is worth more than they thought – and all they did was nothing but wait. Accidental patience; benefits that sometime happen by simply not acting impulsively. 

Trends don’t go on forever – unless you’ve reached galactic escape velocity (~550km/s) and nothing gets in your way. Real estate inventories can’t go below zero. Prices can’t climb forever. Startup companies eventually either run out of financing or succeed or get bought out.

Guessing at trends from a few percent of the life or history of something can benefit from a longer view and a deeper appreciation of the core value. Is the value of a company or of a house greatly different from today to tomorrow? The price can change frequently throughout a day, but the value reacts more slowly. Usually, a house gets a day older every day; but except for emergencies, most homeowners can wait months or years to counter the aging. A company can seem to change dramatically every day because the stock price changes so often, but the core value changes more gradually – even if the stock doesn’t move. A successful order is progress, but the steps that led to the order inherently had value. An invention gains value as it proceeds from idea to research to development to patent to prototype to product to profit. Those steps are usually too subtle and sometimes secret, so their contribution to value to the company isn’t represented in the stock price; but are more noticeable with patience. 

As I wrote above; “Where’s the news? Where’s the news? We want the news! Oh no, maybe there’s no news. What if there’s no news? Why won’t they say anything?” Without the news, worries arise. Over promise and under deliver has become the expectation for MicroVision. But also as I wrote above; “This time looks different, though.”

Stocks bounce around, hopefully upward. Houses hopefully fight aging sufficiently to become more valuable objectively and subjectively. With those and many other aspects of a long-term goal, a long life, one of the key skills is patient. Now, pardon me as I check Twitter to see if MicroVision announced anything after the close of the business day. I mean, come on, I’ve been waiting years and they could announce good news any time now. Now, please?

About Tom Trimbath

real estate broker / consultant / entrepreneur / writer / photographer / speaker / aerospace engineer / semi-semi-retired More info at: https://trimbathcreative.net/about/ and at my amazon author page: http://www.amazon.com/-/e/B0035XVXAA
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3 Responses to Possibly Profitable Patience

  1. alphacpa1 says:

    Enjoyed the read Tim.

  2. Randall Vermillion says:

    I did too.

  3. Harry Gillligan says:

    Keep at it Tom. We’ll get there.

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