The 106th Australian Open has been served, volleyed and aced to victory right here in Melbourne, and that’s why it’s forehands, breakpoints and double faults are on our minds.
The combination of Aryna Sabalenka’s ridiculously loud grunting at Melbourne Park and the tantalising $4 million taken home by the men’s and women’s singles champions really got us thinking. Winning big sports tournaments like the Australian Open and succeeding in investing really are similar in many ways.
Both the Australian Open tennis champion and a successful investor …
1. Has their eyes on the prize
Tennis legend Pete Sampras said he learned a simple thing from being beaten by Stefan Edberg at the 1992 US Open: “It made me really hate to lose.”
Similarly, a winning investor always has their eyes on the prize. You can’t invest ‘just to invest’. Successful investors have made a clear plan—they know what they want to achieve within a defined timeframe and how they will get there.
2. Strives for excellence
Legendary tennis coach Nick Bollettieri said great players in his charge, including Steffi Graf and Andre Agassi, were absolutely determined that being the number 2 player in the world was just nowhere near good enough.
The pursuit of perfection can often be futile and demoralising. Instead, top investors, like champion athletes, strive for progress, with a skill set honed and practised over years. When looking at something to put their money into, astute investors aren’t looking for the perfect strategy; they ask questions, remain nimble, and continue to build their knowledge and skills.
3. Is mentally tough
Most tennis players say they have confidence. But tennis champions believe very deeply that they can do it. It’s how they battle back from match point at 0-40 down with a thumping ace. It’s how they ignore a hostile crowd and incessant boos and whistles to win from two sets down.
A great investor is also remarkably calm and patient. A plan has been carefully set, so they stay the course rather than leap into the buy/sell trends of the moment. In the face of a 10% downtick, they don’t despair but rather hold tight and lift the trophy aloft after a 100% uptick.
4. Is multi-disciplined
Any good tennis player can win a match or a minor tournament. But only the true greats add a Grand Slam title like the Australian Open to their CV. It’s because they play winners with both a forehand and a backhand, and their serve is as strong as their groundstroke.
In the same way, top investors believe in their diversified plan but they also have their eye on the markets. They know their stuff going in but their knowledge about market changes is constantly evolving. They can make a mistake but learn a lesson and put it into the armoury for a better move next time.
5. Knows how to take a risk
A tennis champion rises to the occasion and becomes great just at the right moment. Revelling in the high-pressure moments that would break us mortals, they fire a bold winner that their opponents would deem way too risky.
But was that shot really a risk too far? A top investor has formed a solid plan, covered every angle, analysed the risk versus the return, and is confident it will pay off and is well covered in the event that it doesn’t quite work out.
6. Doesn’t dwell on the past
All too often, a player that isn’t great yet will miss a big shot and still be shaking their hand in disgust five points later. But a true champion will muck up and immediately bank the knowledge from the mistake and get stuck into the next play a stronger athlete and person.
Similarly, the only thing an investor takes from the past is a lesson. If it was a mistake, that can be turned into a positive. And if it was a win, that’s extra confidence and capital for the next successful move.
7. Knows how to mix it up
An average tennis player will think they know what they’re good at and stick at it – even if it’s really not working. But a tennis champ also knows how to change gear at a pivotal moment of the game.
Smart investors don’t put all their eggs into one basket. Part of planning for that investment is expecting it to be slightly unpredictable. Too many average tennis players and half-baked investors are counting chickens long before they’re hatched, but the great investor makes money not just when the market is up, but also when it’s on the slide.
8. Knows their limits
Having courage sounds like the trait of a tennis champion, but sometimes the bravest thing to do is to call it a day. That’s what great champ Rafael Nadal did at the 2018 Australian Open when he pulled out with injury. “The doctors tell me that in two weeks I will be back on court,” he said.
That sort of sentiment is echoed in the good investor, who avoids falling into the emotional trap of letting fear or greed rather than really knowing yourself and realising your limits guide their decisions. Like Nadal, great investors have immense control over their emotions, reacting just as admirably in good times as when the chips are down.
So how did Roger Federer, Warren Buffett, Serena Williams and George Soros achieve greatness in their fields? They knew their stuff, they were calm and focused, they practised hard, they learned from their mistakes, and they always kept their eyes on the prize.
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