There’s a famous saying in golf, “Drive for show and putt for dough.” Augusta National, the course where the Masters is played every spring, is no exception. Each year, a select set of individuals, only the best, qualify for the tournament. Every facet of the highest level of the game – accurate driving, shaping mid-range iron shots, chipping it close to the pin and putting on lightning quick greens – is on full display. For those that enjoy the sport, it’s magical to watch and a harbinger of the times they’ll get out on the course over the coming summer months. However, the scores here are generally much higher than other tournaments. Holes are strategically cut into the trees to create confusion from swirling winds, with water in all the right (or depending on how bad you’re playing, the wrong places) and greens where the ball rolls like it’s on glass. The course is constantly adjusted and tweaked to be intentionally difficult and the eventual champion must play better than their competition for all four days – not many get lucky four days in a row. Even one bad hole can make the difference and Matsuyama was masterful for nearly the entire tournament with all of his clubs.
Watching yesterday’s round of golfers can get anyone thinking about how challenging, and frustrating, the game is. I used to play for my High School team and managed to get down to a 3 handicap when I was playing consistently. Those days are long gone, and I am now a student of the market, not the putter. It shows how “professionals” can make their jobs look so easy. I still have my moments on the course – I’m lucky to birdie one hole a round, and I enjoy the fun of those good shots enough to offset the frustration of making double bogey most holes.
Isn’t this how most investors treat the markets? Remembering the time they picked a winner, and forgetting about their three big losers? 2020 was a perfect example of how it was hard to miss – pick a tech stock and it was bound to appreciate greatly during the pandemic and lockdowns. But now the vaccines are rolling out in full force and technology stocks took a back seat. Many novice investors and “reddit traders” jumped in too late, only to get burned, once again. Maybe it’s the dopamine rush of those once in a decade 10x trades, just like a memory of a hole-in-one, that keeps us trying for more. However, with investments, we’re not talking about a sport here, we’re talking about people’s savings and retirement nest eggs.
It really goes to show how diversification, in investments and golf shots, is clearly better in the long run.