Is the concept of ‘Long Term Thinking’ dead?.....(read article)
Who is left that thinks and acts for long term? Politicians won’t invest in greatly needed infrastructure because it is probably going to their opponent who will cut the ribbon at the opening. CEO’s of corporations do not get rewarded for embarking on major projects, they just get criticised for missing ‘quarterly earnings expectations’ when they invest the required funds. It’s a real problem as acting for the long term has proven to be such a powerful strategy over many decades.
Perhaps the best long term thinkers of all time are the Chinese Government. It is no accident they have the world’s best performing economy and greatly increased the living standard of their people. They plan for the distant future. The other great long term thinkers we’ve noted are the migrant Italian and Greek families in Australia and their tremendous ability to hold assets. It is easy right now to make fun of Southern Europe and their economic abilities, but we leap to their defence here. It is almost unthinkable for Greek Australians to sell a property. They buy so the next generation can benefit and do what’s required to hold it, regardless of economic ructions. Their success at this means that if you now sign a lease for premises in Sydney, there is a good chance your landlord is going to be an Italian or Greek family.
The opposite of long term thinking is trading; buy/sell transactions to take advantage of a better option. It may be your idea, or you may have been given the idea. But be conscious of the fact that many people rely on others’ transactions. When a transaction is made there are a host of people who get paid – brokers, agents, lawyers etc. So it is in their interest to come up with the next great investment idea for you.
Time will tell if it was indeed a good idea, just be aware sitting on your hands can work really well too.