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Buffett brings India his lessons

india Updated: Mar 30, 2011 21:54 IST
Dhirendra Kumar

By the time, you read this column, the great Indian Warren Buffett festival will be over. Lifelong Buffett fans like myself have been delighted to see the grand old man of the investment world has lost none of the wit, wisdom, irreverent sense of humour or his investing mojo over the years.

However, his great contribution in India may have been to bring long-term investing to the centrestage.

In India, the entire discourse about equity investing is relentlessly focussed on the short-term. No matter what lip service is paid to the long-term, the culture of equity investing is unwaveringly short-term. All professional advice given to investors is of the kind that considers a two or three month investment as long-term.

In this environment, the idea of long-term investment is treated somewhat like a doctor’s advice to start exercising and eat healthy. Most people agree that it’s good in theory, but few actually get around to doing it. Equity investors consider the idea of investing for years and years to be impractical, ivory-tower stuff. They all know that money is actually to be made by actively buying and selling stocks on a continuous basis.

Warren Buffett is the living example that disproves all this. His life and his success demonstrates that all you need to do is to understand a few simple things and do them faithfully over the long-term, with the long-term measured literally in decades, not years.

The sight of Buffett talking to Indian audiences and casually mentioning these seemingly epic time-scales for investments that he had made and held is a new experience for the investing community. Far from being impractical, here’s a man who became rich (very rich, the richest in the world), by choosing carefully, buying once and almost never selling. Thank you, Warren Buffett.