Are you investing — or gambling?

In a recent Wall Street Journal article, a Wall Street sage noted that the average holding period for stocks has fallen from eight years in 1960 to seven months today. That’s not investing; it’s gambling!

Unfortunately, I see many business people with the same “quick money” philosophy, and I rarely see it work well. Instant gratification is everywhere. Fast food, easy credit (well … used to be), instant messaging, 15-minute exercise programs, overnight shipping, one-click shopping and drive-through coffee shops, some of which I use, have trained us to look for instant gratification in all areas.

Speed is often a useful tool in business. I merely have to hear one good comment about a book and I’m off to Amazon.com because I can order it in the time it takes to peel a banana. I often counsel executives to try to increase their return-on-time by finding faster methods to achieve the same, or better, results. Reduce labor intensity and assets required and you win, as long as the results are good. However, just like fine wine, leadership skills, most business strategies and many capital investments take time to develop.

When one of my sons was young and we went to a new restaurant, he would ask, “Is this a fast-food or a slow-food restaurant?” He didn’t like slow-food restaurants. (He’s soon marrying a gal who learned to cook at Le Cordon Bleu cooking school so has learned to appreciate slow food). Just like food, some business activities respond well to speed and some respond to slow cooking. No one, except perhaps a college student, cooks everything in a microwave!

Many of us complain about the “entitlement” attitude that some of the younger generation exhibits. I’m pretty sure that many investors, boards of directors and CEOs have it just as bad, looking for quick returns when patience may be required.

When I wrote this, I was in a physical therapy office dealing with a problem brought on by trying to pretend I’m still 25. Another patient who just had surgery was whining because he could barely bend his leg. The physical therapist said, “Repeat after me: I just had surgery, I just had surgery, I just had surgery.”

Although speed can be an extremely valuable attribute, we sometimes need to remind ourselves that Rome wasn’t built in a day, Château Lafite Rothschild spends a couple of years in barrels before bottling and some of our investments in business won’t produce a payday for several years.

Using the right time horizon for investments, whether financial or otherwise, is necessary to calculate success.