The last few times that I’ve played golf, I’ve used my putter from the fairway. The elusive 25 yard chip is often problematic; its about touch. Sometimes you just don’t have it and sometimes you do. Its the same in billiards, dancing, ping pong , and well any other thing you can think of that combines not full effort physical activity and emotional intensity.
The result of my putting from the fairway has been relatively consistent, however. I can basically get it up to the green and in the hole with 3 strokes every time. That’s not great but its steady. Its like if I just use my 7 iron on the golf course. I think I could beat my score everytime with just a 7 iron and putter – no joke. I used to do this when I grew up in South Carolina. I’d walk around carrying a 7 iron and putter because I hated using a bag.
My point here is about consistency and its related to investing. It seems to me good investors are consistent. They consistently find good companies or deals at the right time and valuations. They control their emotions with patience and can balance the excitement of the deal with pragmatism. Its very hard but they have the touch. Its not the golden touch but the touch of consistency. By being consistent, they can keep playing the game, sustain, and then put themselves in position to make the big hit which may only happen once every few years. At that time they hit without really having swung for the fences. At that time it was just a consistent allocation of capital of which this investement was one.
Well, there are a few venture investors with different strategies. Buffet doesn’t even believe in full portfolio diversification. He finds something he knows and bets big. Another one of those would be Vinod Khosla who only swings big. He swings so big it moved the entire world into clean tech. He thinks I’ll lose 20 times but the 1 time I’ll hit it will make so much money that it will dwarf my losses. Those two guys are amazing and are probably the two smartest investors in the world. And then that reminds me of a few of my old sayings, if you don’t think big league, you’ll never be big league. The other is SWING BIG or GO HOME. Otherwise, its not as fun.
I had an old baseball coach who described our second baseman as “steady at being steady” – there is a lot to be said for that. Then we had a 5 hole hitter who was as hot as he was cold and he said he only swung to hit the ball as hard as he could everytime. Why else would he play?
So this brings me back to strategy lesson #102, don’t get stuck in the middle. Pick one strategy and be the best at it.