Ready for the Big Game?

  • Posted by
  • on February 4th, 2010

Most of us will watch the Super Bowl this weekend, and marvel at the offensive machines run by Manning and Brees.  Are they that much more talented than the rest of the population? Compared to that stud on your high school or college team, then yes. Versus the other 30 NFL QBs(plus backups), I think the answer is a definitive NO.  So why does it look so easy for them?  What can we learn as market speculators?

I think much of the difference lies between their ears, in the way they process information.  Take a supremely talented athlete and throw him into the neighborhood Turkey Bowl, and he will dictate the flow of the game.  Put him with professionals, and he’d better get a plan real quick or he’s Ryan Leaf. The preparation AND repetition needed at that level becomes just as important as arm strength and foot speed…replace strength and speed with instinct and intellect, and the conversation moves to trading.

If we think our opponents in this game are less talented than we are, our career won’t last long.  Sure, some have no business being in the arena and are punished quickly.  But once markets have weeded out those that don’t have “it”, even the least skilled are pretty damn sharp.  Who can’t play devil’s advocate on virtually any bullish or bearish argument advanced by a fellow pro?  At that level, it’s about preparation and repetition of edge.  In the immortal words of Allen Iverson, we’re talking about “Practice?!”

We can’t control the flow of the market, nor can we ensure that our best plans will come to fruition.  What we can do is have a few formations in place, and know what we’re going to do when things line up a certain way.  Seriously, do you think there’s a defensive formation Peyton hasn’t seen yet? A market formation Art Cashin hasn’t seen yet? I don’t know how many times Art hits his target, but Peyton hits 60% of the time, not 100%. He’s made his mark by converting some of those 60% into huge plays by recognizing an imbalance, sending his guys to the weak spots, and throwing to that spot.  Think that TD came from circling his team and drawing up a play in his palm?

As stated by Dr. Brett Steenbarger, success is something that is cultivated over time, with directed effort .  We can do one of two things, be born to process information a little better than our opponents, or prepare like crazy in honing our processing skills. Probably a good idea to focus on the latter, rehearsing a variety of scenarios and developing our game plan ahead of time.  In the end, it’s still an art, but there’s no reason not to hone our prep skills into a science and let our acquired instinct take over once the game begins.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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