Scoring Big: From Pitch to Portfolio
The ongoing Cricket World Cup has us all sitting on the edge of our seats, watching the screen with rapt attention – celebrating every six and feeling disheartened at every wicket. I remember discussing a particular match with my friends, and making a joke about how I spend my day job with similar anticipation, rejoicing at every green, and watching every red with a sense of despair.
Once I’d said it, and forgive me for wearing blinders, but I couldn’t help but notice more similarities that cricket shares with investing – Especially in that, to the outside world, it’s an exciting sport; Emotions move up and down, in tandem with the stock movement or on every boundary and every well-bowled yorker.
But what the audience cannot see is the extensive effort required that goes into making the correct choice, at the right time, every time. Investing, just like cricket, requires patience and discipline. It requires poring over annual reports, rehashing the same thesis day in and day out, and maintaining composure in volatile situations, just to hit the proverbial ball out of the park when you face it.
In that vein, to celebrate India qualifying for the world cup semi-finals, here are some lessons we can learn from our players on the field and apply to investing:
1. Invest in what you understand
In the world of cricket, players tend to shine when they have a deep understanding of the game’s intricacies. For instance, they need to be aware of their opponent’s weaknesses and strengths, and the conditions of the pitch. Similarly, successful investors thrive when they put their hard-earned money into areas they understand, whether it’s a specific industry, a company, or a financial instrument.
Simply following the trend, or making ignorant choices without fully understanding the situation, can lead to costly mistakes. In investing, just like cricket, a better grasp of the nuances of the situation at hand, will enable one to make informed decisions and outmanoeuvre their opponents, without taking too much risk.
2. Know your own biases
Understanding one’s own biases and shortcomings is another crucial parallel between the worlds of cricket and investments. In cricket, players who are aware of their weaknesses can work to improve them, whether it’s refining their technique or addressing specific weaknesses in their game.
Similarly, in the realm of investments, self-awareness about personal biases and cognitive shortcomings is essential. Acknowledging the tendency to be influenced by emotions like fear or greed, or the inclination to follow the herd, can help investors make more rational and informed decisions.
By recognizing these biases and actively working to mitigate them, both cricketers and investors can enhance their chances of success.
3. Accept that some bets might not pay off
Ever giggled at one of those terrible run-outs that had the batsman completely confused? Well, it should provide some solace that even the most skilled players sometimes make a wrong move. As one of India’s top batsmen once said, “You’ll hate it at the time, but in hindsight, you’ll be glad because you learned from it.”
In both cricket and investing, these moments of wrong judgements or unexpected outcomes are common. Embracing these failures and using them as opportunities to learn and improve is the key to success. Investors should avoid allowing a single setback to define their entire financial journey or deter them from their long-term goals.
All this just goes to show that while the thrill of victory and the agony of defeat are felt deeply – it’s the hours of preparation, the willingness to take measured risks, and the ability to bounce back from failures that truly define success. So, as you watch the next cricket match or contemplate your next investment, remember that it’s not just about hitting it out of the park; it’s about understanding the game and playing it with finesse.
This article was written by Soumya Turakhia.
Securities investments are subject to market risks and there is no assurance or guarantee that the objectives of the scheme/fund will be achieved.