It’s the Rugby World Cup final today and I’m going to make a prediction. Most predictions are based on statistics and in sport there are statistics for everything.
Everything is tracked in detail. How many tackles, run meters, missed tackles and line breaks are a few. But what’s often interesting is that victory is not always assured by dominating in areas that one would think would lead to victory. The most important statistic is the scoreboard, but one would think that the team that possesses the ball more, would have a distinct advantage. A deeper analysis shows that this is not always the case. Finding the lead indicator of success is not always simple.
I’ve asked a number of people including some professional rugby players and none have yet been able to be sure which one or two leading indicators are the most important. The obvious ones are possession – that’s the amount of time in the game during which one team has the ball – and territory. But in the game in which England thrashed Australia, Australia actually had most possession.
My theory is that the most important stats are turnovers and possession in the opposition’s half of the field. Another is meters gained after the tackle. Professional rugby teams these days are very strong defenders – they make first-time tackles and have organised defensive lines. That’s when they are expecting attacks – but when they’re not, it’s a little different. Turnovers are when the team with the ball loses possession and is then not ready to defend. And possession in the other’s half of the field is much more valuable than possession in their own. The Wallabies could be criticised for not being able to use possession and having too much possession in their own half. It’s all about building pressure in order to crack the defence.
Financially successful people also build pressure through surplus cash flow and being opportunistic. They are quick to take opportunities when others are under pressure. They aim to pay less for assets by using their liquidity. Unsuccessful people spend their cash flow aimlessly. They have possession but don’t know what to do with it.
Warren Buffett, known as the world’s, most successful investor, made some of his greatest deals in the GFC. Not planned but when the ‘turnover’ appeared, he took full advantage. The average investor usually does the opposite. They either don’t have the money (because they followed the herd at the wrong time) or they panic when prices fall and do the opposite. They become the team that loses possession and gets unexpectedly attacked.
Cash flow is like possession and surplus cash flow is like possession in the opposition’s half. It’s no good just having cash flow if you can’t or don’t know how to use it. You have to get yourself into a good position so that your cash flow reaps rewards. That means having a clear plan aimed at ‘attacking’ what’s most important.
What we will see in the final is both teams focusing on getting into the others half first. It’ll be their first priority so expect them to kick out of their own half and then try to get turnovers and possession in their opponents’ half. They both try to put as much pressure on the other as possible in order to create a gap. This will be through ‘rush defence’ and kicking. They will be trying to lay the foundation for scoring points. Investors need to lay the foundations for wealth accumulation through a strong defence.
I predict that the winner of this World Cup Final will be the team that has most possession in the opposition’s half and most turnovers.