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Every Shot Must Have a Purpose
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I really love this post because sports like golf, baseball and cricket are so very applicable to the game of investing and life. All three sports are essentially static: i.e. the person with the ball at any one time and their psychology and mindset have a disproportionate impact on any outcome.
In baseball and cricket, although team sports, no one can help the pitcher or bowler when they are about to throw or bowl the ball to the batter/batsman. Similarly, for someone playing golf, no amount high-fives and encouraging words makes up for the fact that you and only you are responsible for what happens next.
The mental and psychological aspects of these games needs to be studied more in the context of investor psychology and performance.
Thanks Sean! There is a great post from Graham Duncan that touches on many areas of this: https://medium.com/@graham.duncan/the-playing-field-dfb9a1473f43. Definitely worth reading if you haven’t seen it before.
His comments on tempo in particular have resonated with me since I first read this piece. And they’re directly applicable to this idea of “shot commitment”:
“An investor’s relationship to time also influences how he or she views periods of recovery or quiet. Good investment management comes from a mindset reflecting the assumption that the manager will be investing for decades, but that investment activity is as a series of sprints and recoveries rather than one extended marathon. As Lenin once said: “There are decades where nothing happens; and there are weeks where decades happen.” The tempo of a strong investment culture is in sync with the reality of long periods of inactivity. There is often a shared mood that the game is afoot, but not a rushed feeling to do something based on fear or greed. Then, when the moment is right, top investors are startlingly aggressive.”
you nailed it when you said this can be fiendishly difficult. in the alpha generation bucket, how do you encourage an uncorrelated portfolio of trades to capture diversified risk premia when it is concentration which moves the needle? Some of it is certainly “commit to the shot”. “This is our diversification/concentration strategy, we’re sticking to it because it is what we believe”.
p.s. can i get a pdf of this to share? not seeing the link.
Gotta defer to Ben and Rusty on the technical question (I am wondering if the button only appears for the long form notes?). But thanks very much in advance for sharing!
We will get a PDF put together to make it easy to share! We usually do it just on long-form but happy to do it here, too!
More ridiculous than a 20 trying to play like a 5 is a 3 acting like he is good at golf, the result of a brilliant industry (raccoons in the vernacular).
Great post!
Reminds me of something I read from an analysis of Clausewitz……
What are the characteristics of a great General [player] ?
Clausewitz suggested two.
“The first was intuitive, the quality labeled by the French coup d’oeil: the almost instinctive capacity to discern through the fog of war what was happening and what needed to be done; a flair for essentials that enabled the commander to select the right course almost without thinking, and certainly without going through the elaborate process of calculations of possibilities and probabilities that would paralyze the decisions of a lesser man
The second requisite, said Clausewitz, was the capacity, having taken a decision, to stick to it: determination. Everything would conspire to convince the general that his decision had been wrong.
This reminded me I have been meaning to revisit Clausewitz…
A PDF link has been added to the note! You should be able to find it at the top and bottom of the text.