The cricket Big Bash has come to an end this season. It has been won and lost and once again, there’s a lot to learn from sport. In the semi-final, the Sydney Sixers had made the most magnificent start scoring at a rate of ten runs per over without losing a wicket. A young twenty one year old batsman, Josh Phillippe (who I’m sure we will hear more about) was playing the game of his life. Demonstrating an incredible array of shots all over the ground, he made the bowlers look like primary school kids. They had no answers. He romped to 48 runs in 20 odd balls and just as Shane Warne began calling for his selection for the Australian team for the World Cup later this year, he began to look vulnerable.
The bowlers hadn’t started to do anything different – they were out of ideas. Josh started doing things he hadn’t done to that point. Maybe he was getting bored..or tired. Either way, for the first time, he looked vulnerable. Four runs later he was out.
Very successful people find out what works, have routines, and without losing focus are able to stick to their method through difficult as well as good times.
Effective approaches are sabotaged all the time and in all aspects of life. Weekend golfers are possibly the funniest. They will find a swing technique that works, but as soon as they play a bad shot they’ll try something new. Business people also try new things all the time. The latest book, the latest method. The most successful create a method and stick to it. 90% of the benefit is derived from the regular and consistent application of the strategy. It doesn’t have to be perfect.
The most successful people are clear and consistent. There is always going to be some minor adjustments or adaptations, but seldom a complete change to something that mostly works. Pujara, the Indian batsman who ground Australia into the ground in the 2018/19 test series, has a very distinctive method of regripping his bat before every ball. He picks it up like he’s never done it before, looks down at his hands and then takes up his stance. Every ball! Nathan Lyon the Australian spinner, in some level of frustration as Pujara passed another century, asked him if he was bored. With no verbal response, he took up his grip and carried on.
Research from Dalbar Inc shows that due to behavioral errors, the average investor underperforms the markets by on average 4% per year. New ideas, methods or the distractions of the media are all reasons for it happening.
No system or process will work every time, all the time. There will be times when it looks like it isn’t working. There will be times when it almost works too well. It can be difficult knowing when to make an adjustment or when to just stick to the system. There will be times when changes are needed – generally, these shouldn’t be made either when the results are particularly good or bad. There is seldom a perfect correlation between a good method and results. It’s impossible to see results immediately. Logically, therefore, it doesn’t make sense to make changes simply because the results aren’t as expected. A decision to allocate most of a portfolio to growth assets to achieve a higher long-term return shouldn’t change when the markets go through a temporary fall.
There are endless numbers of investment methods. Every year we are exposed to new ideas and methods from both the individuals we deal with as well as the institutions. Some, including the most famous, have had times when they didn’t look good. It’s not always easy filtering the good from the bad or simply dressed up old ideas. What is definite is that whatever method is chosen, it will come under question at some point. Even the sage of Omaha, Warren Buffett regarded as the world’s most successful investor, has had to endure underperformance and speculation that he had lost the magic. But, throughout his career, he has stuck to some basic principles and never wavered.
Josh Phillippe wasn’t to blame for the Sixers loss but he missed an opportunity to not only score a hundred and ensure victory for his team, but also ensure his selection into the Australian team for potentially a once in a lifetime experience. I’m sure he’ll get there but like many on the road to experience, he will need to understand that method is more important than talent.