Baseball and Wall Street

When it comes to investing, some people are long-term investors.  They continually put money in the market and don’t worry so much about the daily, weekly, or even yearly ups and downs and just focus on where they want to be in 20-40 years down the road.  When looking at the following picture, long-term investors focus mostly on the red line.

 

For others, like “day-traders,” it’s a very different story.  Their jobs (and earnings) depend on correctly analyzing the minute by minute ups and downs of the market.  In the photo, they focus on the numbers and every by-the-minute change in between.  Not surprisingly, they usually lead very stressful lives.  These are the people you often hear about resorting to drugs and alcohol to cope with the stress.

Does any of this sound familiar?  My guess is when it comes to investing your money you take a long-term approach.  With regards to baseball, I’m willing to bet many of us passionate baseball people are day-traders.  

From a player’s perspective, a pitching “day-trader” is euphoric at #1 because they just struck out the leadoff hitter.  At #2, the pitcher gives up a double to the next batter and is furious with himself.  In #3, he gets a good hitter to pop-up and once again he’s high as a kite.  A bad call sends him spiraling down to #4 only to return upward again to #5 with another strike out.  He then walks off the field totally devastated after giving up a game losing home run at #6.

This emotional rollercoaster does not suit the game of baseball.  If you live and die on each and every up and down moment of the game (or season) you are sure to burnout.  The human mind is just not suited to handle that amount of emotional mood swings.  Mine sure wasn’t.

Whether you play 20 high school games or 162 at the major league level, a long-term approach is usually best for your own sanity and performance.  Of course, this does not mean that you never make adjustments along the way.  Minor adjustments here and there are necessary.  However, baseball “day-traders” tend to see every downturn as a sign that major overhauls in mechanics and/or strategy are needed.  These players seldom perform to their potential because they are constantly changing this or that to the extreme. 

All this goes for coaches too.  “Day-trader” coaches are not too pleasant to play for either.  They tend to scrutinize every little thing players do wrong. 

Be honest.  How many of you players and coaches out there are “day-traders” ?

Tomorrow’s post: Practice in uniform