My daughter started playing basketball again after taking a couple years off. Her soccer team put together a basketball team this year. Most have played before but they haven’t played all together. This past weekend they lost 56-8 (don’t ask, I haven’t figured it out yet). I had several observations that I also see in the investing world…and frankly, writing about the experience was therapeutic.
1/ Ego is the enemy. When you beat a bunch of 4th grade girls by 48 and you are keeping your AAU players on the court, you are clearly doing this for you ego. I know what this says about you and I wonder what message you are sending to your team.
2/ You never make yourself look good making someone else look bad. Shannon’s team is made up of nine 4th graders and one 3rd grader. Basketball is their cross-train sport from soccer. The girls have played together for nine seasons in soccer. They got so good, that they moved to the boys league. Staying in the girls league wouldn’t have made them better and it wouldn’t have felt good to destroy these other teams. The basketball team that Shannon played against Saturday had 3 AAU players and four fifth graders. What did beating them by 48 achieve? The context of the team make-up is also important for Shannon’s team to understand - the context matters. Context is what changes facts into truths.
3/ Win the next possession, keep working, keep fighting - I keep the book for the team and I have known these girls for a long time. This picture really captures their spirit, and notice one of their coaches letting them work through this challenge sitting in the background. With their great coaches and great attitude, they ignored the scoreboard and tried their best on each end of the floor each possession. I guarantee you the next game they play is going to seem a lot slower and a lot easier.
My daughter Shannon discussing the game and what the other team was doing
4/ Basketball is a finite game with infinite life lessons - better to win the latter. A fourth grade pre-season basketball tournament score is as close to irrelevant as you can get (except to the girls playing during the actual game). However, using those games to teach about life outside the line is of great importance.
5/ Coaches matter - I have been fortunate enough to coach basketball teams with my kids on it and without. I think the only thing I really did different was sit my son quicker because he was trying to get away with something. My daughter was a great listener. I loved working with the teams where my kids weren’t playing. I always treated basketball as a dynamic puzzle. I tried to give my teams the structure to succeed, the freedom to fail, the cadence to stay engaged, and the chemistry so the sum of the parts is greater than the whole. I stopped coaching because of the egos of other coaches. It was no longer about teaching and learning, it was about winning and losing. It wasn’t about process, it was about outcomes. It was about “me”, it wasn’t about us. The gratitude for the time and sacrifice of the collective group atrophied and it wasn’t worth it to me anymore (but I still go through everything in my head when Shannon plays).
I am very, very lucky to have the coaches I do for my daughter in soccer and basketball. What Shannon doesn’t have in aptitude, she overcomes with attitude. Always giving her all - always with a smile on her face. Her teammates genuinely enjoy each other. Are there things I would do differently? Yes, but just because I think I am right doesn’t mean the other coaches are wrong - and I hung up my whistle. I always have the right to work with Shannon individually and I do. All of this I attribute to the culture that her coaches have created - in victory and defeat. Developing character, having fun, and making friends is important, but having a coach that exemplifies that culture is a gift they will appreciate and cherish decades from now.
6/ Preparation and Execution Matters. If you want to get the results when everyone is watching you have to be willing to work when nobody is. Practicing on your own and trying to be better than you were yesterday is something we try to teach our kids on the playing field and in the classroom. Shannon dribbles to and from the bus stop each day it isn’t raining. You have to want it work like that.
7/ You are never as good as you think you are when you win, and you are never as bad as you think you are when you lose. Often when you win, you can get complacent, think you are great, and stop working so hard. Conversely, when you lose, you can feel like giving up. These girls enjoy their sports and each other so much that I haven’t seen this, but I definitely saw some deflation a couple of times on Saturday. They have had so much success playing soccer (against boys) that this was new and character building for them. It shows me why losing is important - learning to lose and learning to respond both externally as well as how you internalize it. My daughter had a million questions after the game and a lot of thoughts. My favorite was, “I want to play them in soccer.”
8/ One team limited their challenges, the other team got to challenge their limits. If I am winning by 30+ points with 8 minutes left in the game, I would hope that my entire 2nd string would be in the game. That didn’t happen Saturday. Their coach lost the opportunity to develop his weaker links and give them a chance to learn from their mistakes. At that point in the game, there is nothing that you can prove or work on. Meanwhile, my daughter’s team is 0-0 today….just like the other team.
How does this translate to investing?
1/ Ego - I see how people treat their investments as a means to try to win - beat the market, brag to their neighbor, show off to their brother-in-law. Why? What does this do? Likewise, this happens at companies and it is reason #483 of why I don’t buy individual stocks. CEO’s tend to try to “win” for their shareholders rather than focus on the employees and customers. Simon Sinek discusses this in his new book “The Infinite Game” and how it affected companies like Kodak, Sears, and Apple differently.
2/ Making yourself look good by making others look bad - It is quite easy to pick a timeframe of your liking and a performance benchmark of your liking and make your advisor look really bad. Conversely, your advisor can likely pick the timeframe he likes and the benchmark he likes and make himself look good. This solves nothing. What matters is that you are progressing to be better postured to achieve your life goals that you were last time you did a review with your advisor.
3/ Win the next possession, keep working, keep fighting - life and investing is going to throw you curve balls - market crashes, job loss, family health. You must keep working through your community to get solutions and get through the tough times.
4/ Play the infinite game, not the finite game - Basketball is a finite game - you know the rules, the players, the desired outcome. Investing is an infinite game where you are simply trying to move forward. You don’t win if you have the best investments today. You don’t win if you are the richest person in the graveyard. Those are not the rules and not everyone is playing by the same set of rules. What matters is you and your ability to achieve those goals.
5/ Coaches Matter - While I am clearly biased, sometimes you need a coach who sees what you can’t or to share what they have learned to make your life easier. Financial advisors should help with the monetary and non-monetary side of managing your wealth
6/ Preparation and Execution Matters - In basketball, you need to know how to scheme against the other team and you have to score. Your portfolio needs to have a game plan that you have prepared and then you have to act on that plan. Remember, it is just a plan, and it is likely subject to change, but going through the exercise will make everything else about wealth easier to absorb and achieve.
7/ Never as good as you think when you win, never as good as you think when you lose. If you “beat the market” today, you are not invincible. In fact, you probably should be asking what risk are you unnecessarily exposing yourself to for that “victory”. Much like a starting point guard can get hurt, a portfolio may not require silly risks when your goals are not in jeopardy. Playing that point guard could put the title in jeopardy, especially when this game is already won. Conversely, if your portfolio doesn’t have a great day, understanding the context of why will either make it easier to accept OR make you re-evaluate what you are doing. Hopefully one “loss” doesn’t lead to drastic, unnecessary action.
8/ Challenge Your Limits - Investing is a place where risk and volatility are scary to many people. Find ways to fight those fears successfully. Set savings goals rather than spending goals and understand how that impacts your future and your ability to absorb market misbehavior.
While I am disappointed that my daughter lost by such a margin of victory. I think she learned a lot in the process. I am going to guess that her team and coaches will perform better in the infinite game of life...which is what really matters.