4 minute read.
Cheese and wine. Batman and robin. Golf and investing.
All matches made in heaven.
OK, maybe I got ahead of myself there. But investing and golf may be a better pairing than you might think. And if you’re involved in one, lessons may be transferable across to the other.
Personally I get on the course every chance I get. So to be able to compare and breakdown my two passions pleases me immensely.
So behold, my lessons and similarities between golf and investing.
Risk Vs Reward
Every decision you have to weigh up the risk versus reward of the action. Do you try that dirty high draw around trees to hit the green? Do you try that penny stock biopharma stock that could go anywhere?
There’s no right answer. And the decision is different for everyone.
You have to weigh up what your needs and expectations are, and decide, is it reward worth the risk?
Me personally? The risk is blowing it up.
Keep the ball in play. Keep yourself in the game. Keep the initial capital intact.
I don’t wanna wipe myself being a hero trying to hit bombs and hoping for the lottery. Give me that slow and steady, compound growth any day of the week.
Find your Swing, and Trust it
There’s no be-all and end-all way to swing a golf club. Same in investing, there’s no single way to invest and outperform the market.
But in both scenarios, you have to find your style and trust it. You’ll have down slumps. Nothing in life is a constant upward trend of results. But in those downtimes, you’ve got to trust it or analyse where you’re going. Not just abandon ship and say all hope is lost.
A key point on the swing. Don’t change it on the course. You gotta trust it. The range is where you work on it. Same with investing. If you’re a day trader with a tight stop loss, and you enter a position, probably not a great idea to turn into a value investor and ride the losses.
Control What You Can
Following on from risk, you can’t control some of them. But you can choose how you approach and react to them.
You can’t control the weather. And you can’t control the Fed. You gotta focus on what you can control.
Know your own strengths and weaknesses. And play them to your advantage.
If you know you have a low-risk tolerance, don’t do risky shit (duh). And it should go without saying, but even I start playing ahead of myself on the course somedays. And probably with investing too.
Stay within your circle of competence and control what you can. No point fretting and whining about matters outside your control. You won’t change anything and it won’t help.
Reset After Every Shot
You have to not only learn from your mistakes but move on too. You have to be able to move on and reset your focus. Concentrate on the current task at hand without letting the past cloud your judgement. Again, easier said than done.
For golf and investing, you really have to play the scenario in your head before it happens.
What’s my aim? What could go wrong? If something does go wrong, where might I end up?
Contingencies are helpful in case things do go south. So a little preparation can go a long way.
But when things go south (given enough time they inevitably will, but who knows how bad and for how long), you just gotta roll with the punches and think about the next move.
No point letting previous shit affect future shit.
Reset and recover.
It takes 17 holes to build a good score, and one hole to ruin it. And as the Oracle of Omaha says, “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”
Golf is not a game of perfect. Neither is investing. One bad year or one bad hole isn’t the end of the world. No one is perfect so mistakes happen.
BUT be wary of the monumental screw-up. It’s easier and more damaging than you realise.
Similarly, if you have a bad start, it doesn’t mean you should just roll over and die. You reset. Focus on the next one.
Play for the long term and don’t fret on the small stuff. But at the same time, avoid blowing up and wiping yourself out.
Whether investing or golf, it’s pretty personal. It’s tempting to see others’ success and want to emulate it. But often the best use of time is to focus on yourself and just be better than you were yesterday.
Both golf and investing can get pretty complicated.
So make it as simple as possible. But no simpler.