Inactivity strikes us as intelligent behavior

I have family members visiting us this week. They trade in the equities market and use charts to determine whether to buy or sell. Accordingly, I have a week of hearing phases like 'sentiments make up majority of market activities', 'trend is my friend', 'market depth' etc.

But the one question that linger in my head is 'Did you trade today?'

Most of the time my answer is 'No'. But I realised that I spent the same amount of time (if not more) in front of the computer screen as they did. So what's the difference?

Traders spend most of their time looking at price actions, market depth, volume. They uses charts to assist them, and they execute a lot of trades. Such activities give people a sense that they are actively 'doing something'.

Value investors, on the other hand, spend most of their time reading/studying company announcements, stock reports, industry news/reports, view and opinions from experts. They monitor share prices (though not as often as Traders) of their selected stocks with the objective of finding bargains. Accordingly, Value Investors do not trade very often, but they are not 'doing nothing'.

Warren Buffett suggest that 'inactivity strikes us as intelligent behavior'. Buffett also explains that the art of investing is to acquire, at a sensible price, a business with excellent economics and able, honest management. He is searching for businesses that he believe are virtually certain to possess enormous competitive strength ten or twenty years from now. 

My personal experience is searching for such a business that ticks all the boxes is very difficult. Even when I actually found one, I still have to wait for the share price to be sensible. Hence, I am 'doing lots of things, just not trading'.