Golf has lessons for investors
David Berman
A number of observers have noted the similarities between smart investing and good poker playing. Now comes an analogy between investing and golf – or at least a punishing course like Pebble Beach, where the U.S. Open championship was held last week.
According to Bill Luby, at VIX and More (via Abnormal Returns), the trick to success in both pursuits is to avoid making big mistakes.
He explains: “The reason the Pebble Beach odyssey stuck in my mind is that it reminded me that traders should approach trading the way they would approach a golf course like Pebble Beach. The goal should be to play for pars and look to capitalize on any birdie opportunities that arise. To the extent possible, this means keeping the ball away from hazards and obstacles, as well as avoiding low percentage plays. It also means not compounding small mistakes by pressing and trying to make up lost shots in a hurry. Impulsive play is almost always penalized; patience and discipline are the only way to survive.”
