What Golf Teaches Us About Investing

I probably play an average of, oh, say, one round of golf a year.  That includes the years when I go totally berserk and get in two or three rounds, as well as years like this one when I probably won’t play at all.

For all the abuse golf attracts based on some of its obnoxious practitioners and its sometimes questionable land-use practices, I think it’s a fabulous game, and there’s one big reason why.

Because it can’t be mastered.  Even if you have every advantage there is.

If you take away from golf the opulent clubhouses, the manicured courses, the clubs crafted from dragon’s toenails and depleted uranium and the sometimes bizarre styles of clothes, bags, carts and shoes, what you have left is the same silly game that shepherds began playing in 12th century Scotland: trying to hit a rock into a rabbit hole with a stick.

No matter the splendor of the setting or the sophistication of the equipment, eventually you have to hit the ball.  That’s when the fun begins.

The possible courses the ball can take don’t clock the entire compass, but it’s certainly close to 120 degrees depending on your shank or hook.  It’s also possible for the ball to roll a humiliating five or 10 feet or even to just sit there undisturbed on the tee giving you the raspberry.  Even if you get the pellet in the air, it can still head for the rough, the bushes, the trees, the bunkers or the pond.

In golf, nothing can save you from the consequences of your actions.  Period.  Unless you’re one of those vermin who use the hand wedge or the foot iron to move the ball to where you wish you had hit it (or just lies with the scoring pencil), you’re doomed to make the best of it.  As the back cover of the official rules of golf states, “Play the ball as it lies, play the course as you find it, and if you cannot do either, do what is fair.”

The golf course never gets mad, but it can get even.  It doesn’t warn, but it will punish.

The absolute even-handed justice of golf drives some players nuts.  They will blame their poor results on everything from bad luck to poor course conditions to inferior equipment to substandard caddying to satanic intervention.  Their best efforts go into newer and better excuses, not into improving their swings or their tactics.

The half dozen or so twisted clubs that I’ve seen abandoned on courses over the years probably weren’t the real culprits in some angry duffer’s poor round.  Everyone plays the same course and they all play with the equipment they brought with them, including their skills and their temperament.

I hate to even start on this next part because you’ve probably already realized where I’m going with it, but here goes.

Stock investing is just like golf in every way that matters.

Markets are completely impartial and their rewards and punishments are meted out with an even hand.  They cannot be mastered.  You can make two investments that seem exactly the same to you and yet one will deliver a sack of cash and another will turn into a box of rocks.

Just as in golf, the most important question in investing is “What are you going to do next?”  After hitting a ball into a fairway bunker you have to decide whether to try to advance the ball toward the green or just get back on the fairway.  In both golf and investing, sometimes you go for the big shot and sometimes you play it safe.  But whining about conditions won’t help you a bit.

And just like golf, investing requires you to know your own temperament and limitations and the current conditions on the course and play accordingly if you’re going to make money.

Both golf and investing can be played safely and conservatively.  Or not.

And finally, you can become either a better golfer or a better investor by getting professional coaching and advice.

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