Its 2015, November and Barcelona are playing against their arch-rivals Real Madrid at their home ground, Bernabeu.
At around 9 minutes into the game Ronaldo, the super striker of Real Madrid marches towards Barca goal but is foiled. The ball then lands to XX who then starts a classic t0tki-taka move of passes. They keep passing to each other for 38 times and then it happens. The Madrid defence becomes a little lazy a small gap is opened in which lands the 39th pass. The next pass goes to Suarez who puts in back of the goal
Tiki- take the rule of Investing
FC Barcelona’s philosophy is simple if the opponent doesn’t have the ball they can’t score. So they keep the possession and wait and wait for the right opportunity to attack. Similarly, when they lose the ball they work double hard to get the ball back in their possession
One needs to wait patiently for the right moment to attack the market quickly and decisively. In case you make an error in sports or investing, you need to rectify it at double speed to regain control of your investing field.
Let us look at another classic sports moment, this time we go to Motor Sports.
Valentino Rossi and Lorenzo are locked in a neck to neck race at Cataluyna circuit. With just 3 laps to Rossi makes the move and takes the lead. But as they cross the start-finish line, Lorenzo dashes out and goes ahead only to see Rossi make the most audacious use of breaks on the left-hand side on straight to move ahead.
They battled more but Rossi took the lead again at the final turn to win the race.
The braking rule of investing.
What separated Rossi from a lot of others was that while all of them were very good in accelerating bikes Rossi was superhuman in decelerating and braking his bike.
When markets are going up and your portfolio is growing up you tend to think that this won’t end and actually the acceleration will happen faster. It as at these times you need to break decisively by cutting down your equity exposure and moving them to other asset classes.
The next rule comes from the world of cricket
2003, India are playing Australia at Adelaide. The series has been bitterly fought and Australia batting first have scored 556. India in reply is struggling at 85/4 when Rahul Dravid takes charge. He shows a masterly calibration of defence and attack and goes on to score 233 allowing India to fight for a victory, which they do to notch up a famous win.
The defence rule of investing.
As Warren buffet says the most important rule in investing is not to lose money or not to lose so much that you can never come back. What that translates for all of us is that investing only when you are protected against permanent losses of capital. That would often mean leaving a lot of balls and chances and waiting for the right ones to come. This applies to both sports and investing.
Sports brings out the raw human traits and those excel in sports are ones who are able to master control over these traits. Also, it is the best way to learn taking losses on the chin and to look ahead. And this is exactly what you need to do if you need to succeed in both sports or investing.
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