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Power of Long-term investing

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 Albert Einstein called compounding the eighth
wonder of the world. And just how smart Albert
really was can be gauged by the following story.
This is a story in which a simpleton of a king lost a
well-fought game of chess to an ordinary farmer.
 The king asked the farmer to choose his reward and all
that the farmer asked for was 1 grain of wheat for the first
square of the chess board, 2 grains for the second
square, 4 grains for the third, 8 for the fourth and so on
and so forth for all the 64 squares.
The king was very happy for being let off rather
lightly and readily granted the wish.
The real snag came when he tried to
settle the claim.
 He required
18,446,744,073,709,551,615
grains of wheat!
Now isn't that mind-boggling?
Let me try to be more concrete
There are about 25,000 grains in
1 kg of wheat.
king required about
7,37,870 million tonnes of
wheat to fulfill his
obligation
Now, here are some statistics for
comparison.
Our total national agricultural produce
(wheat, rice, sugarcane, cotton, etc.)
in the year 2004 was around
200 million tonnes.
The required quantity of wheat
is about
3,690 times this amount.
Even all the wheat produced by man from
all over the world, ever since he learnt
the art of cultivation will be far less than
this quantity
 If the king had decided to settle this liability in
cash, say at a super wholesale rate of Rs 3.50 per
kg, he would be required to pay Rs 25,82,54,417
crore. This is over 2000 times the Indian Gross
National Product, which is the total value of all,
industrial as well as agricultural,
goods and services
produced by India.
 What happened there was that the smart
farmer used the power of compounding to
his advantage.
 And such is the power that
the king didn't know what hit him
 Realise that things were fine
till the first few squares.
It was only by the 10th square
or so that it went out of hand.

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 In fact, long-term investing and
compounding are two sides of the
same coin - one cannot exist without
the other.