A few days ago a video of Roger Federer went viral, for some the best tennis player in history (and for everyone at least one of the best), giving a speech at Dartmouth College in the United States.
“In tennis, perfection is impossible,” he says in his speech. He then recalls how people, when they saw him play, said that he seemed to not try hard, that he easily beat every opponent. And of course, Roger won almost 80% of the matches in his career.
But what is most striking is a fact that he reveals, and that I think left many of us with our mouths open: in his 1,526 games, he won only 54% of the points.
If an average person, who doesn’t know him, were to watch any 20 points from Federer, he would see him winning only 11. He would hardly think he is one of the best in history.
To give a counterexample, there are several cases where, unlike Federer, they have been extremely effective. Just to name a few:
- Floyd Mayweather, boxer who finished his career with 50 fights, all victories.
- Khabib Nurmagomedov, a mixed martial arts fighter who retired with 29 wins in 29 fights, having lost just 2 rounds in his career.
- Outside of sports, we can mention SpaceX, which to date has 96.89% of rockets successfully launched.
Federer tells us: “Did you double fault? That’s just one point. (…) Even a great shot, a backhand overhead, that ends up in the ESPN top-10 list, that’s just one point too.”
Mayweather was fighting for glory and money. He wanted to become the best boxer of all time, and he knew that with one loss under his belt, that would be an uphill battle. Many say that he only chose easy fights, to make sure he kept his record. For him, a fight was not “just a point.”
Khabib set a fighting model in the UFC (Ultimate Fighting Championship), which simply served to dominate every opponent put in front of him. Unlike Mayweather, Khabib wanted to fight the best, and he made them all look like just another one of the bunch. In his history of 29 fights, each one meant much more than a point.
A failed SpaceX launch, unlike Tennis, is not “just a point” either. It requires tremendous effectiveness, because there is so much at stake in each one.
Since 1927, the S&P 500, the index that represents the US stock market, has had an accumulated return of more than 30,000%.
Over the same period, the index has had positive returns on only 52.4% of the days. If you look at the market over any given 20 days, if you’re lucky, it will have risen on 11 of them.
When it comes to investing, we tend to look for markets to behave like Mayweather, Khabib or SpaceX, when in reality, they look more like Federer, and that’s enough. If one day we see a drop of -2%? That’s just a point. If another day the return is 4%? That’s also just a point.
To win the game you have to be able to think long term, not that every point is the end of the world or that everything is ready. Just as staying in the market is, proven, the best investment strategy.
