Golf’s new populist hero, Jason “Duff Daddy” Dufner, recently captured the PGA Championship, the final major tournament of the year. As summer and the golf season fade, this is a good opportunity to reflect and see if there are lessons from the game applicable to other areas of life, like investing.
Jason DeSena Trennert is managing partner/chief investment strategist of Strategas Research Partners LLC, a highly respected New York-based research firm. I have followed and admired his work throughout my career. As it turns out, Trennert is also an avid golfer and recently penned an essay, “The Greatest Games—Golf as a Metaphor for Investing … and Life.” He has graciously allowed me to share his words with you.
Trennert cited the classic “The Lure of Golf,” written by Herbert Warren Wind. Wind wrote, “There are a few contemplative golfers who have attempted to analyze why the golf virus hits a man so hard. The game’s singular fascination, in their consensus, rests on the fact that while you play against par, against your opponent, against the topography, and against the elements, in golf, as in no other sport, your principal opponent is yourself.”
Reading the book led Trennert to believe his interest in golf and Wall Street revealed some “unifying character flaw.” He drew the following parallels:
• It’s hard to have everything going for you at the same time. Rounds where your drives, approach shots and putts are all clicking are very rare. It’s similarly difficult for investors to capture the market’s fundamental, technical and psychological rhythms simultaneously. Trennert says, “More often than not, success comes not from perfection, but from a series of small successes that allows you to grind out solid performance.”
• Each investment decision and golf shot is independent of the next, and performance can be fleeting. It doesn’t matter if you knock a 7-iron to within three feet of the cup, unless you sink the putt. Similarly, it doesn’t matter if you once had a profit in a stock. It’s where you sold it that counts. All golfers know the pain of having an otherwise great round spoiled by one or two bad holes. Trennert says for investors, success has increasingly become a function not of picking the right stocks, but avoiding the bad ones.
• Both games are humbling and can seem like they’re unfair. “In investing, the real pros know there is no difference between being smart and making money. It doesn’t matter where you went to school or how nuanced your thesis may have been. Performance ultimately equals smarts in the investment business. Because no style points are awarded in either activity, investing and golf may be the fairest games of all.”
• Ultimately, the highs and the lows keep you coming back. The romance involved in golf and investing is that both are very difficult and can never truly be mastered. When you have success, it’s all the sweeter.
I’ve discussed ad nauseam in past columns how investors can be their own worst enemy. The same is true in golf. As Lao Tzu said, “Mastering others is strength. Mastering yourself is true power.”•
Kim is the chief operating officer and chief compliance officer for Kirr Marbach & Co. LLC, an investment adviser based in Columbus, Ind. He can be reached at (812) 376-9444 or firstname.lastname@example.org.