I’ve never been a huge fan of winter sports (unless you include bowling!). Despite spending all of my growing up years in the Big Sky Country of Montana, and wading through tons of deep snow, I was never big into skiing, ice skating, hunting, camping, hiking, fishing and the like (misspent youth, I know). So whenever the Winter Olympic Games rolled around, I met the event with somewhat mixed feelings. Ski jumping was pretty exciting. Figure skating had its moments. But usually the thrill of victory and agony of defeat featured in the Winter Games did not thrill me.
Then I discovered curling.
Wikipedia says it best, “Curling is a team Olympic sport in which stones are slid across a sheet of carefully prepared ice towards a target area. Two teams of four players take turns sliding heavy, polished blue hone granite stones across the ice towards the house (a circular target marked on the ice). The purpose is to complete each end (delivery of eight or ten stones for each team) with the team’s stones closer to the center of the house than the other team’s stones. Two sweepers with brooms or brushes accompany each stone and use stopwatches and their best judgment, along with direction from their teammates, to help direct the stones to their resting place, but without touching the stones.”
It sounds kind of weird on paper, but watching it is even weirder. The action (?!) of curling seems like some alternate reality mash up of shuffleboard and sweeping the kitchen floor. Yelling seems to be a big part of the sport as does looking more like an indie pop singer than an Olympic athlete. It’s rather difficult to imagine what kind of fitness routine curlers go through to prepare for the games, but I suspect they spend less time in the weight room or on the track than do other Olympians. I mention none of this to be critical or degrading; I really, truly enjoy watching the sport/game.
For me, there is something elegant in the precision of the game. It’s clearly a sport which requires more finesse, than flash; more strategy than strength. The fact that the Norwegians are good at it is also a plus (I’m one-fourth Norwegian). And the contrarian in me is naturally drawn to off-beat activities such as curling.
As I was watching the match between the US and France, I started thinking that curling is a little like investing. And as I pondered on this a bit more, I realized that curlers are a lot like professional investors. I see three points of similarity:
1) What they do looks easy. If curling were just like shuffleboard, it would not be an Olympic sport. There is clearly a lot more skill and strategy involved than just sliding a big granite stone down the ice. Many think that stock picking is also a simple exercise. Just find a stock with a good story and buy it. Make money. The fact the some people with no investment background, training or expertise can make money by buying a stock re-enforces the notion that investing is easy. It’s not.
2) They use unusual tools to do their job. Who else brings a broom to an Olympic contest? What else is on the curler’s equipment check list? 42-pound curling stone? Check. A pair shoes with different soles (one for sliding, one gripping the ice)? Check. Flashy golf pants? Check. The tools for the professional investor may seem as arcane to the average person: free cash flow analysis, beta, intangibles on the balance sheet, off-balance sheet items, DuPont ROE calculations, earnings yield, insider transactions, sentiment measures, technical analysis, and so forth. The work behind picking a stock is much more than just finding a good story, but it is work not easily appreciated by the casual observer.
3) Strategy is paramount. To be successful, curlers need to anticipate the moves their opponents might take a few turns out. Simply executing the game plan will not be enough to win. They must be flexible and react to changes in the position of the stones, or modify the plan when they own execution is imperfect. Likewise, professional investors need to figure out what the market is telling them and what it might do in the future. Inevitably, the market will make some unexpected moves which require the investor to be flexible, nimble and opportunistic.
I hope that all you curling fans out there will totally enjoy the rest of the Olympic games, and perhaps as you watch a few of the remaining matches, you will take a moment to consider the hard working professional investor who, metaphorically at least, is trying hard to put the stones in the right place in the house.