Firstly could some one help me with what specifically this 'wait time' is.
e.g. php render? browser render ? can i do anything about it?
Should i be looking to implement page cache to reduce this 'wait time'?
While my site feels pretty fast, I have been getting more and more concerned about the figures shown on tools.pingdom.com,
I appreciate it would be somewhat difficult to help given i'v chosen not to include my magento domain, but I feel the question is generic enough to apply to all who run magento.
I did consider posting in the general webmasters thread, but since this is a dedicated magento store, i felt it best to start here.
External Tests
https://developers.google.com/speed/pagespeed/insights/
Best Answer
Honestly 400ms isn't too shabby for a Magento CE installation although I don't know what kind of page that is (Category / product / cart etc).
If you want a quick way to speed up the shop look into using a Full Page Cache extension like Brim FPC. It's easy to install and configure and it works more effective than the Magento default cache.
Another thing you can do is to switch from file based caching to memory based caching. Since the RAM memory is faster in reading and writing than the disk it will save you some time. Check out this article for that.
And last but not least: the database. In a lot of cases this will prove to be a bottle neck. Check your slow query log or use a tool like mytop to see how busy the MySQL server is. Moving it from the localhost to a seperate server that can be finetuned specifically for MySQL will also give you better performance