Fall is upon us and for many of us, that means the excitement of football season has finally arrived!
Being a life-long Cleveland Browns fan been a tough life. As someone who has grown up a Browns fan, seeing them leave Cleveland and the organization starting over it is always interesting to see how the team has developed each year.
On the flip side, being a Browns fan has taught me a lot about facing adversity - and if you follow football at all you will understand when I say that being a Cleveland fan has been a tough life.
Many of my friends and colleagues are die-hard Patriots fans. I lived in Boston for some time so we always enjoy (friendly) banter when the Browns are facing the Patriots.
After facing the New England Patriots last weekend, the Cleveland Browns dug themselves a pretty big hole, just during the first quarter. During that first quarter of the game we saw a lot of sloppy turnovers, bad decisions, rampant penalties; just continuously shooting themselves in the foot. Essentially it made it harder to compete against the other team when they were regularly making simple mistakes against their own team.
While the team does have potential, it is still a very ‘green’ team in comparison to their competition. They tend to do things more carelessly, and continuously make more rookie mistakes than other teams do.
As always, I try to draw similarities to investing.
As a newbie investor, you can potentially run a similar risk for not setting yourself up for successes as you should against the market. You make poor decisions, make simple mistakes, yield rampant penalties (i.e not having good processes in place, etc). Books by famous investors always share similar stories about painful experiences early in their careers, especially those about a large magnitude of loss.
How do you learn good lessons from these painful experiences?
First and foremost: be prepared! You need to mentally prepare yourself for situations where the market reacts differently than you anticipated or for market conditions to have a dramatic change. If you mentally prepare yourself for a different outcome than desired, you are better equipped to learn new lessons and be able to make necessary changes for the future.
Next, consider doing a post-mortem analysis. Honestly review what happened after the project is complete. Evaluate what worked and what didn’t. Consider what processes should you establish to make things run more smoothly next time. Take all of those lessons and implement them in future actions and investments.
After the Browns lost to the Patriots they didn’t simply leave the locker room and go home. They went to the film room and reviewed what exactly happened to cause such a disastrous first quarter. They considered what could be improved, how the players could prepare and perform better and decided how they could make better decisions both individually and as a team. They looked at what steps can be taken to be better prepared for the next game.
My challenge to you is to consider a recent experience that did not go as expected: did you evaluate post-mortem and determine where you can improve for your future routines?
RR#6,
Dave
Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. Please see the Disclaimer page for full details.