I admit I get suckered in to watching the Olympics when they are on in my house. I think it is the combination of my admiration for those far more gifted than I, the interesting personal stories that are told, or the drama of the competition.
It takes a lot of personal ingredients to earn the right to stand on a podium in front of a worldwide audience and accept an Olympic medal.
Obviously, the first ingredient is skill. If you don’t have it, you won’t get a medal. You won’t even make it to the games. This is the first reason (along with my advancing age) that I am not an Olympic athlete.
There are thousands of talented skiers, curlers, ice skaters, and lugers in our country, but only a select few earn the right to represent our country at the Olympics so there must be additional ingredients than skill.
The second ingredient in my Olympic medal recipe is persistence. Being the best requires overcoming your worst.
Regardless of how skilled you are, there will always be setbacks along the way. Injuries, stumbles, failures, and dark moments can derail even the most skilled athlete. Medal contenders have the mental fortitude to persist through challenges that cause other skilled athletes to quit.
A third ingredient is risk. To stand out from the crowd and overcome the competition requires that athletes to assume a great deal of risk. They must push themselves beyond anything they previously believed was possible – a daring pass, a new jump, an additional twist.
This requires a deep understanding of your physical limits coupled with a commitment to daringly expand those limits.
An Olympic athlete’s career is typically quite short. A few may make it to three or four Olympics, but most will participate once and then move on with their lives.
Maintaining the skills, persistence, and willingness to take risk for decades requires talent beyond an Olympic athlete. That incredible commitment requires the skills of an investor.
To reach their podium, investors must constantly sharpen their skills of ignoring the daily excitement of the financial markets to focus on their long-term well-being. Investors must persist through personal, financial, and even market setbacks numerous times throughout their life. Investors must identify and balance all the different levels and types of risk in their lives.
Come to think of it, investors really deserve to be honored by a worldwide audience if they achieve their financial goals in life. As a country we should celebrate and admire their skills, persistence, and risk management so that others can be inspired by their success.
Unfortunately, a lifetime of good investing makes incredibly boring television. Investors are most often left without a podium or a worldwide audience to celebrate their successes. Instead, we are left with quiet gratitude for our blessings, and, come to think of it, maybe it is actually better that way.
Quote of the week: Warren Buffett: “Investing is not a game where a guy with the 160 IQ beats the guy with the 130 IQ . . . Once you have ordinary intelligence, what you need is the temperament to control the urges that get other people into trouble in investing.”