Recently there was a CNBC report on Roger Federer viral Dartmouth commencement speech earlier this month. How viral ? the official Dartmouth college youtube video on Federer speech has racked up 1.8 million view as of June 30th 2024
So I figure, why not “shamelessly” attempt my hand at trend jacking to increase my site exposure. ( after all, as an investor, we rely on riding the tend/cycle momentum bandwagon to earn a living, in short, no trend, no profit, period ) Although I might be a bit too late to the party for this Federer bandwagon.
Little bit of background, I used to played tennis and watch tennis during the heyday of Federer and Nadal Rivalry , I was Nadal Fans initially while at the same time, modelled elements of my swingpath after Federer. During the modelling process, my admiration for Federer has grown through my countless video watching and imitation process, especially after 2012.
Regardless, watching Federer game and penning my thoughts on relevant lessons I learnt from him is a kaleidoscope & intoxicating experience
1)Effortless is a myth ( behind the scene hard work is what creates Federer )
excerpts from Federer speech,
I say that as someone who has heard that word a lot. “Effortless.”
People would say my play was effortless. Most of the time, they meant it as a compliment... But it used to frustrate me when they would say, “He barely broke a sweat!”
Or “Is he even trying?”
The truth is, I had to work very hard... to make it look easy.
So I started training harder. A lot harder.
But then I realized: winning effortlessly is the ultimate achievement.
I got that reputation because my warm-ups at the tournaments were so casual that people didn’t think I had been training hard. But I had been working hard... before the tournament, when nobody was watching.
Sometimes I have readers emailing to me that they were amazed at the ease with which I pointed out market bottom/ inflection point ( my articles in Q3 2022, and the other important market inflection point in end October 2023 ) and was wondering how I managed to do that ?
one of my early Nov 2023 market review entry detailing the inflection/market reversal are shown below,
I was able recognize and point out certain pattern in a timely manner only because I have suffered many losses in the past, and spent countless hours drilling myself in the structured learning process ( viewing charts in different cycle, context, and under different indicator types , to identify trend and pattern )
Excerpt from Federer speech
Yes, talent matters. I’m not going to stand here and tell you it doesn’t.
But talent has a broad definition.
Most of the time, it’s not about having a gift. It’s about having grit.
In tennis, a great forehand with sick racquet head speed can be called a talent.
But in tennis... like in life... discipline is also a talent. And so is patience.
Trusting yourself is a talent. Embracing the process, loving the process, is a talent.
Managing your life, managing yourself... these can be talents, too.
Some people are born with them. Everybody has to work at them.
Talent, intuition, hardwork, they are all important. But at the top echelon of tennis and investment arena, raw talent only accounts for about 1 to 5% of your success, yes you may have some brilliant ideas popping up/ inspiration from certain books/investor quote, but it require tons of structured learning processes and refinement to turn your idea/inspiration into some that’s even remotely workable/usable in financial market.
And you’ve got to embrace the process ( as well as having patience & discipline to stick to the process ), to learn about the market and eventually, turn your learnings into a weapon & an edge that you can employ to extract money from the market.
Through structured learning process, you will discern the commonalities and differences in conditions under each market phases, which enhance you ability to assess market conditions and develop plan in response to the market.
2) It’s only a point
Excerpt from Federer speech,
In the 1,526 singles matches I played in my career, I won almost 80% of those matches... Now, I have a question for all of you... what percentage of the POINTS do you think I won in those matches?
Only 54%.
In other words, even top-ranked tennis players win barely more than half of the points they play.
When you lose every second point, on average, you learn not to dwell on every shot.
From time to time, investors came up with ideas, and will formulate some of them into serious investment thesis, but does every seriously thought and strategically planned thesis work out ? Of course not, that’s where setting out parameters comes into play, if it hits your losing threshold, you‘ve got to move on and reassess the market to find the next opportunities.
The similarities of top tennis players and top investors are the following,
So there you see, Even amongst the best professional investors/traders, the win/loss ratio of their trades is barely better than coin flip. ( sometimes worse than coin flip )
If your guesses, trade turn out to be a loser, just move on don’t dwell on it.
However, if you keep repeating the same coinflip chance throughout the matches, trades day-in day out, quarter-in quarter-out, year-in year-out you will most likely turn out to be a mediocre tennis players and average investors.
Top players know that there are crucial moment which swings the match winning odds in your favor, and they capitalize on those moment to advance into semi finals, finals and ultimately winning the tournament.
Brief example in Federer context, winning the last set in 2017 & 2018 Australian open finals, or losing the last set in 2008 Wimbledon finals
Similarly for investors, there are moments that tilt the winning odds in your favor, creating market-beating mind boggling return %. Learning to recognize when those moments is, is what separates Top performers from the run-of-the-mill investors.
And this is where it relates to section.1 effortless is a myth (training hard behind the scene, outlasting opponent are what create Federer ). It’s through tough training and drills that enable you to recognize and thrive under the crucial moments.
Analogously to tennis players, What matters to your investment account at the end of the day, is how much money you gain when you are right, and how much are you losing when you are wrong. ( in other words, trade expectancy ).
This is the crux of the famous George Soros quote, It's not whether you're right or wrong, but how much money you make when you're right and how much you lose when you're wrong.
3) Evolving playing style, expanding options in your repertoire
Federer had been evolving his playing style in different phases of his career, particularly when his age is advancing, his rival is improving and countering his existing playing style.
Below is the bird eye aerial view of the evolvement of his playing style,
2004 – 2006 – outhitting/overpowering all his opponent to claim title
2007 – 2010 – changing to a shorter takeback and more efficient forehand swingpath to save energy, while still preserving racquet head speed (maintain the same forehand speed but tradeoff = sacrificing some power )
2014 – changing to a bigger racket head to increase power while increasing margin for error ( less shanking/mishits while hitting the fuzzy yellow in off center area. )
Post 2014 – enhancing his net game and develop more arsenals of shots to shorten the point. ( preserving stamina post 30 years old )
Excerpt from Federer speech,
To amplify my game and expand my options. You need a whole arsenal of strengths... so if one of them breaks down, you’ve got something left.
When your game is clicking like that, winning is easy—relatively.
Then there are days when you just feel broken.
Your back hurts… your knee hurts… Maybe you’re a little sick… or scared…
But you still find a way to win.
As a tennis player, Federer Serve, returns of serve, forehand, backhand, transition, volley, speed, footwork, physical conditionings and mental resilience are all develop & enhance to the highest level to ensure his competitiveness in dominating the field and prolonging his trophy laden career
As an investors, the equivalents of those skillsets are your ability to identify,
1) Trend
2) Momentum
3) Breadth
4) Sentiment
5) Positioning
6) Flow
7) Relative strength charts
Combination of these factors will form certain market cycles and pattern ( due to trend, large institution positioning & flows or dealers/intermediaries market action during certain time/conditions)
Financial market and investment research has evolved tremendously post Pandemic, (let alone post 2008 GFC ) the relationship that work wonders in the yesteryear/previous market cycle no longer works. There are many esoteric research, multidisciplinary approach since then ( Quandamental, technical analysis, Macro conditions, flow of funds, etc.. ), it’s very essential in learning and understanding them to keep up with the development of financial market.
Ultimately, the more repertoire you possess and understand, the more ways you have at assessing & skinning the market.
These concludes the 3 lessons I learnt and hope they would inspire you similarly in your investment journey.
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