I had the great pleasure of watching Johanna Konta play Simona Halep in the Ladies Quarter Finals at Wimbledon on my TV on Tuesday afternoon of the Second Week (the Markets are simply best avoided at the moment) and Konta’s whole approach struck me as remarkably relevant to our task as Investors.
I had not watched a full Match with Konta up until now but I had seen odd bits and I have been really impressed by how she talks to the Camera after her Matches (she is such a contrast to that miserable Murray) and what is really remarkable is how she has gone from being an ‘ok’ player to someone who is now in the Wimbledon Semi Finals and ranked Number 4 in the World.
From what the ‘experts’ are saying, the change seems to be in Konta’s head and it is obvious to anyone who follows Sport that the difference between the Champions and the Losers is nearly always about the Mental side of things. At the Top Level in any Sport, the talent is extremely similar and the physical attributes and durability is largely the same - but some Players consistently Win whereas other Lose.
Nothing Succeeds like Success
So much of it seems to be about Belief - the ability to believe in yourself. A common thing I see is how a fairly new Player is pretty good until they actually take the final step and win a big Championship or something - once they have cracked this milestone, often further Wins follow as if a Dam has finally been broken. Perhaps it’s a Mental Dam.
This is particularly something I have seen in Motorcycle Racing - one that especially springs to mind is Mick Doohan back in the late 1980s who was up against arguably the strongest line-up of Riders ever in the likes of Eddie Lawson, Wayne Rainey, Kevin Schwantz, Wayne Gardner, John Kocinski and others but despite many Podiums he never seemed to take the final step and get a Race Win at the top level. Then it happened, I think it was Hungary in 1991 or something like that, and then he just could not stop winning - in fact he was only really stopped by a huge Crash in Assen that smashed up his Legs and nearly cost his career (the Doctors wanted to chop his leg off but they ended up sewing his legs together for months so that the blood supply from the good leg saved the almost dead one !!). The amazing thing here is that despite such appalling injuries and being unable to even operate a Rear Brake using his Foot (his ankle is frozen solid), he went on to win 5 World 500cc Championships on the trot and was just mentally bullet proof.
One of his approaches was to intimidate his opposition every Race weekend by getting a ‘Gentleman’s Set’ of Pole Position, Fastest Lap and Race Victory - every time he went out on Track even in the Practice Sessions, his aim was to be the Fastest and to just scare his Competitors into giving up before the Race even started !!
This ‘breaking the Dam’ thing is something I see a lot in the smallest Class of the MotoGP Weekends - Moto3. The great thing here is that you get to see the Top Talent of the future when they are still remarkably young - often they can start winning as young as 17 and the amazing thing is that once they win a race, you can almost guarantee more Wins will come soon. It’s like they “get the monkey off their back” and start to realise they are good enough to be at the Top and it just gives them something solid to hang Self-belief upon. It gives them an ‘Edge’ against the other 40 or so Riders.
This is most definitely the case with Investing and I find that when I have a bad period I can be reasonably relaxed about it because I have a lot of experience of making Money behind me and this is something that I can build on and take great mental strength from. I distinctly remember struggling for several years when I first started off Investing (you know, the usual errors like mucking around with AIM Trash) but at some point it just all ‘clicked’ and things started to make a lot more sense and my ability to find Stocks that would go up over time improved immensely. Of course the biggest realisations are to stop buying Rubbish and to buy Quality Stocks but also to understand Valuation.
Sadly there is no real substitute for this experience. If anything the biggest problem when anyone starts Investing is over-confidence - we all think we are a genius and we will easily ‘Beat the Market’ but in reality 99.9% of Newbies are simply Lambs in the Slaughterhouse (sorry Veggies !!) and we will make a lot of mistakes that can often be repeated until we finally get the message the Market is trying to drum into us. I guess what I am trying to say is that the important thing here is to just stick at it - you will have setbacks and disasters and terrible periods of under-performance - BUT THE WORST THING YOU CAN DO IS TO GIVE UP.
Once you have a few years behind you and you have started to figure out what really works and what doesn’t, it gets a lot easier to stay calm and unemotional and to focus on the Daily and Weekly repetitive tasks and just be confident that the overall Yearly Results will take care of themselves. Lord knows we will have bad years but if we just keep plodding away doing the right things then we will be Winners.
This is the thing about Konta - she has gone from someone who used to ‘choke’ in Matches to someone who is just totally focused and unemotional and robotic - exactly what we need to be as Investors / Traders. After the Quarter Final match, Konta said the following in the Interview immediately afterwards:
“I felt very clear about what I was trying to achieve out there whether or not it was going my way or not………I put trust in the fact what I was doing was going to bring good things.”
I just love these words - she is basically saying that she kept her eye and focus on the Big Picture and just kept plugging away and fighting for every point - and not getting flustered when things went wrong and not getting over excited or over-confident if things went well.
Konta shows no emotion - same win or lose a point. We must be the same when we are attacking the Markets. The Key thing here is just how important the Mental Side of things is and we need to get our Heads in order if we are to consistently make Money. We all have the talent and the knowledge, the art is to get our Brains in order so we can exploit these attributes.
In the post-match analysis, Billie Jean King (another Former Tennis Champion from the 70s I think) said stuff like:
“Stick to the game plan…….Be aggressive when it is appropriate…..Don’t be over aggressive……Accept you will make errors but stick to the plan.”
Again, this could have been written with Investors in mind - it is just so true for what we are doing and it ties in with my view that we need to “put the hammer down” when Markets are favourable and we need to “ease up when things get tougher”.
Billie Jean also said “It takes forever to get ahead but no time at all to lose it” - this again struck me as so relevant to Investing - we all know it takes a long time to steadily build up our Profits, but once we get a Profit Warning or Market Meltdown we can see big Profits wiped out instantly.
After writing the First Draft of this Blog, which mainly focused on the Konta Quarter Final, we then had 2 Finals - the Ladies and the Gents - which both demonstrated the importance of Psychology to being a Winner.
In the Ladies Final, Venus Williams seemed to have the upper hand against Garbine Muguruza but towards the end of the First Set, Muguruza stepped up a gear and took the Set. The second Set was then just one way traffic and Venus just didn’t seem able to keep up. Again, like with Johanna Konta, Muguruza has a very robotic like approach - she clearly ‘internalises’ all her emotions and her outward appearance is just totally unflustered - even in the First Set when I think she nearly suffered a Break of Serve.
In a similar way of course, Venus seems to be fairly robotic but I see so many other Players who are smacking the Racket on the ground, bashing the ball against the wall, and talking to themselves and showing various signs of displeasure - I guess for some people this works but it is hard to think of many of the really great players who behave like this. In fact, even John McEnroe admitted in the Commentary that when he freaked out like he always used to, he actually played worse !!
Another interesting factor around the Muguruza Victory was that for the Wimbledon Championships she was being coached by Conchita Martinez who I think was the 1994 Wimbledon Champ and the only other Spanish Lady to have won that Tournament. The thing here was that she is normally coached by someone else who’s wife was having a baby, so Martinez stood in - but the Commentators seemed to think that she had brought something very positive to Muguruza’s game because she helped her relax and to not get too stressed about things. Again, Psychology has a part to play.
The Men’s Final was a total shocker - I honesty can’t remember seeing anything like it. In the First Set Marin Cilic put up a solid fight against Roger Federer but towards the end of that Set, Federer put the pressure on and as a result he took the First Set. From memory, Cilic then just seemed to lose maybe 8 Points on the trot and just seemed utterly outgunned - it was pretty surprising at that level. Then at the start of the Second Set they did the usual Sit Down bit and the Course Doctor and some other Bods were called out to attend to Cilic and he seemed to be in tears and in essence having a bit of a breakdown - it was really a shock and Federer looked utterly bemused and clearly had no idea what was going on. Cilic was sort of hiding under a Towel and clearly in huge distress but eventually he calmed down and was able to come out to play again but continued to be pretty ineffective.
After a bit he had to be attended to by a Doctor of some sort and they were dressing his Foot which looked a right mess - it seems like he had a pretty bad blister and this was causing him the problems. The tears and stuff were presumably because he was in the Wimbledon Final (Wimbledon is THE Tournament they all want to win due to its history) and of course all his family and friends were in attendance and all of Croatia would have been watching him - the pressure on him must have been immense. To have got that far and have all that pressure but then to have an injury which he knew would stop him from playing to the high standard he is capable of must have just hit him like a truck in terms of his emotions.
I think Cilic came out of it very well though - as did Federer who was very complimentary after the Match - because he could easily have given up but he made a point of pulling himself together and playing on to give the Crowd and the watching World something to see. He is a young guy on the way up and I am sure he will get many chances in the future and this is all part of the learning process and understanding his own weaknesses and where he needs to focus in order to become a Champion.
Well, I am sure you will agree, that was a very different Blog to the tosh I normally put out. It just hit me whilst watching Konta just how important the Psychological side of playing Tennis at the Top Level really is and the commentary from the likes of Billie Jean King, John McEnroe, Tracy Austin, Boris Pecker etc. just confirmed that element.
So why did I write this? Obviously my contention is that there are parallels from Tennis to what we are trying to do as Investors (or Traders) in the Markets - more and more I believe that our own Psychology and Emotional Control are vital to really being successful - or at least this is an area where I myself know I can improve. In addition, being able to think about the Psychology of other Market Players can also be of use.
I am pretty sure I have mentioned this before (it is probably on my ‘M3 Manifesto’ page) but I see successful Investing as having 4 Key Component Parts which are:
My contention is that we can get by and probably do ok by understanding and practicing a few of these but if we can combine all 4 in an effective way, then I really believe that gives a real ‘Edge’ and will enable us to consistently achieve Superior Returns. Therefore, to my mind at least it is pretty clear how the Psychology stuff I have talked about in this Blog relates to competing in the Markets.
In summary, I see the Key Lessons that we can learn from Elite Tennis players and we can apply to Investing as follows:
If you want to know more about the Mental side of Investing/Trading then click on the ‘Category’ ‘Psychology’ on the Blog Page and you should find quite a few things I have written and if you go to ‘Wheelie’s Bookshop’ there are a number of Books both specific to Psychology and also in relation to how it affects Investing.
Anyone for tennis?
Epilogue……..Sadly Jo Konta got beat by Venus in the Semis……and then got a hard time from John Humphrey (who is a massively overpaid BBC Radio Presenter……I bumped into him in a Lift once - don‘t ask !!)
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