Is Investing Like the Olympics?
I look forward to watching the Olympics every four years, especially the Track & Field. It’s impressive to watch athletes that are experts in their field. They have practiced their craft for years. Its amazing what the human body can do, when your put your mind towards perfecting every move your body makes.
I was a promising young sprinter in the fourth grade. I out-ran all of the boys in my elementary school, except for one. He went on to be the 6 ft 5-inch quarterback of his high school football team.
As a kid, I frequently envisioned myself standing on the podium, accepting my hard-won Olympic gold medal, in the 100-meter race, of course.
During that time, for a brief period, my parents moved us to Washington state from California (that’s a long story for another post). Anyway, in Washington, I entered the local track meet for kids. I entered the 50-yard dash and won by about 25 yards. I’m not kidding. People in the stands were shocked. I was shocked too. After the race, kids came up to me, when I was sitting in the stands, and asked me what I ate. They were trying to figure out why I was so fast.
Later, I learned, I was a big fish in a small pond. This was one life lesson that would stay with me.
We moved back to California within six months. I continued with my running, as it came naturally, I didn’t have to work at it. (so I thought).
Entering high school, I, of course, joined the track team. At our first meet, I expected to do well. I thought I would win. I placed third in the 100-yard dash. Reality had set in.
I had become a small fish in a big pond. Another life lesson.
I continued running in high school, as I enjoyed it. But I had other interests that took my time. I didn’t practice as much, and thus, I didn’t get much better.
I was, though, good enough to get approached by a track club in Huntington Beach, when I was competing in an invitational indoor meet. Maybe they saw promise in me, or maybe they saw another paying member. I did notice that the runners that were members of a track club were good, really good. Much better that us raw amateurs.
My parents didn’t have the time, money or inclination to allow me to join the track club, so my sprinting career faded as so many dreams do.
California is known for attracting the best and brightest. There are a lot of world class athletes living in California. The competition is tough. You have to step-up your game if you have any chance at competing. High risk, but high reward. If you can make-it in California, you have a good shot of making-it on the world stage, and at the Olympics. Thus, you are a big fish in a big pond if you can make it in California.
So now, I look at all the people that are on investing trading apps and professing their trading savvy in chat rooms. Do they have experience investing? Are they trained professionals? How can they be so brazen with little experience? And the most important question, do they trade stock as a profession? Are people paying them for their service?
When people are paying you for your service, it’s another ball game. The stakes are very high.
The first trade I made for a client was nerve racking. I re-checked my evaluation and data about 10 times before I clicked, “submit”. I looked at the trade from every angle to make sure I didn’t miss something: That the trade was in the client’s best interest and that my trade would hold-up to compliance scrutiny. This was someone else’s money. I never forget that it is someone else’s money that I am trading. I could hurt my client, I can lose my job, my livelihood if I screw up.
Professional traders: the money managers of large pensions, hedge funds, managers of mutual funds and Exchange Traded Fund’s, they are the ultimate professionals. They manage billions and trillions of dollars for a living. Every. Day. They are really good at it because it is their profession. They are educated financial professionals and have practiced their craft for many, many years.
So, I wonder how everyday people can think that they can compete with professional money managers.
Think about the visual of an Olympic athlete’s body, such as a sprinter, diver or gymnast and then think about the visual of an everyday person. The difference is startling, isn’t it?
It's like Olympic athletes are a different species.
Now, if you could, think about the visual of the inside of the financial brain of a professional money manager and the inside of the financial brain of an everyday person.
Its like the difference of that fourth-grade kid that dabbled in sprinting and an Olympic sprinter. Not in the same league. Not even close.
Photo Credit: Annika Byrde/NTB/AFP/Getty Images