This summer my son will be 27 years old which marks the 27 anniversary of the death of my golf game. Back in 1995 I had worked hard to turn 20 years of a makeshift baseball swing into a real, check that, something that passed for a real golf swing. My handicap had dipped to a historic low of 9 which for me was a monumental thing. Now I’m not saying my son is to blame for my lack of a single digit handicap…ok, let’s be honest, I am saying the little brat is the reason for my now mediocre golf game!
Now I do love the boy and he’s brought me many joys in life, but since I can’t blame lack of talent for my golf woes, I have no problem blaming him. Clearly, I didn’t put metaphoric pen to paper in an effort to pick on my boy. No, I put pen to paper in an effort to draw parallels (we’ll see) between golf and investing.
OK Brown, you might be saying, I’ll allow it, but you’re on thin ice.
You see when I was playing my best golf my instructor taught me that never to focus on my score. Never to say to myself, “self if you can get down in two, you’ll break 85, or self if you make this putt, you’ll avoid double bogie”. The key he said, was to play the shot right in front of you. Bringing the 18-hole score into question on number three is not only pointless but detrimental to the focus on “this” shot. I found this advice to be very helpful to my mental preparation on every shot. When I was (emphasis on “was”) playing good golf, I was always aware of this discipline and when I got caught up in a hot or poor start, I almost never played well.
What does any of this have to do with investing, indeed that is a good question. Like a golf shot investing has its moments when, well, it’s all about the moment. Many folks look at each transaction or “trade” as a do or die decision. They worry that if they don’t get this trade right in twenty years, they won’t be able to retire, or if they don’t read the right publication or watch the right talking head they will be doomed forever.
If you look at a bad moment in the market as a “get it right or perish” moment you’ll likely overthink it and in keeping with the golf metaphor, “tighten your grip and shank it”. In tense moments on the golf course or in long-term investing it is always about the long game and long-term outcomes. With that said we should not see every swing or trade as a “make or break moment”. We should focus on the swing or transaction for what it is, one of many individual decisions that will eventually get us where we are going and result in the score we are seeking. Golf like investing is about numerous decisions over a long period of time. Each should be given time and attention, but not so much that we overthink or overswing worried that this is an all or nothing moment.
There is no doubt we will all be facing a 250 yard shot over water at some point down the road. Do we lay up or go for it? The decision should be the one that makes the most sense for our long-term goals, but it should not be made into more than what it is, one of many shots we will take over an investing lifetime.
I’ll see you hackers at the 19th hole,