Wednesday, June 15, 2011

The Small Investor's Sole Advantage: Patience

My family and friends all think I'm crazy, re: my long, long, long wait for SIGA to hit its full potential. But here's the thing: small investors have one single advantage over the big guys (with whom we otherwise can never hope to compete): we can park our money. We can buy-and-hold.

They can't do that. Like sharks, they must keep feeding. Their clients and bosses compel them to meet their marks, and show significant gain each week/month/quarter/year/whatever. I, by contrast, can placidly park my savings in a stock like SIGA, waiting year after year until it hits $30 (which I think it will).

Investors talk about "opportunity cost" - the money lost while you fail to profit. But my feeling is that only large investors have the luxury of considering opportunity cost. In fact, my ability to ignore opportunity cost is my single leg up as a small individual investor! So I don't complain about it. I rub my hands together gleefully at my ability to wait endlessly for my SIGA ship to come in. It's my sole advantage in the merciless battleground of investment. If I were an investment honcho, I would envy me.

Of course, having bought SIGA in the $2s, I've quintupled even as of today's disappointing stock price (over a period in which the market otherwise tanked). That makes waiting for $30 a lot easier!

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