No, You Don’t Need to Win ‘Em All!

By Shlomo Maital  

    Roger Federer, tennis great, recently gave the Commencement address at Dartmouth.  There are tons of such speeches these days, as graduation ceremonies proliferate – but Federer’s got special attention.

      Here is the essence:    Federer quit school at 16 to turn pro,  and went on to win 20 Grand Slams!   In his career,  he won 80% of the matches in which he played.  But in terms of points, he won only 54%!    That is, his opponents won 46% of the points played against Federer.

        How can this be?

         So, Federer notes, you do not need to win every point, just a bit more than half, to be a champion.  And most important  — you do need to win the key points, like set points and match points, which he tended to do.

          We do not need to win them all.  Just a bit over half.

          In terms of investing:   We play against pros, and are amateurs.  We can’t win that match.  Buy and hold.  The rising tide of the market will boost your assets.  If you try to play against the pros, who  have information we do not, you will not win 54%,  or even 45%.  They will  win.  Churning your portfolio just racks up commissions for Wall St.  Why do that?

           In terms of life:  Do not despair when you lose.  Focus on the ‘matches’ that are really crucial, and try to win like Federer, just over half.   Then you will be a champion.