Tag Archives: The Losers Game

The Loser’s Game: Why Being Conservative Can Help You Win At Investing

Throughout my whole life I’ve always enjoyed playing tennis. I loved being competitive, and I played in all the local tournaments growing up – and even went on to play in both high school and college. In my later years, I read a book called “Extraordinary Tennis for the Ordinary Tennis Player” by Simon Ramo, who was a scientist and statistician.  His book analyzed how tennis matches were won or lost. The book would have served me well when I was competing years ago because it brought attention to the concept of risk and return. The author highlights the fact that in expert and professional tennis about 80% of the points are “points won” simply because of superior talents by the participants. This means that in professional matches, the points won are typically accomplished by brilliant passing shots and by very few misses. In our mere mortal amateur world, however, the opposite is the case. About 80% of the points won in an amateur match are accomplished by “points lost” – i.e. points that are caused by errors, missed shots or double faults by the opponent. In other words, just being consistent and conservative can help the lesser player win a match against a formidable foe with a reckless game plan.

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