The Sports Investor's Mindset
by Ric Brown, Top Market Sports
In stock trading, there is an old saying: "Plan the trade, then trade the plan."
If you're not familiar with the adage, it basically means that you do your analysis up front, develop your plan, then stick to it. It's a great way to keep yourself from getting caught up in the emotional swings before, during, and after the trade. So, if you haven't incorporated this into your sports investing strategy yet, here's why you should:
Watch the typical recreational gambler inside a casino to see how erratically they behave. They will either bet on their favorite team, on a hunch, or they'll bet on a tip they got from an outside source. They're impulsive, shaky, and they might even change their bet at the last-minute if someone as random as their bartender even happens to second guess their pick. It's because they have no plan.
Take your typical sports program on TV as another example. You'll find the hosts to be informative and entertaining, but more importantly, they will hold STRONG opinions. That's because they're paid to debate. Watching two hosts go at it, each pounding away with their points and counterpoints makes for great theater, however, when it comes to sports wagering, these talking heads can wreak havoc on your betting system if they cause you to double-think your plan.
Sure, it's nice to have our opinions validated by experts, and likewise, it's natural for us to recoil when they are against us. No one likes to stick their neck out and go it alone, but as sports investors, that is exactly what we must do at various times throughout the season if we are to be consistent with our "trading philosophy."
I can recall two Superbowls where I experienced serious cases of double-think due to being second-guessed by the experts. The first was Denver vs. Carolina in 2016. My research and intuition both lead me to pick the Broncos. It was about 10 days before game time and the odds were great with the public flying high for Carolina, so I called my business partner in London to place the bet. Unfortunately, he hesitated because one of our mutual friends, an ex-professional athlete, roasted him alive. "The Panthers are the team of destiny! What are you thinking?"
It took some convincing to get my partner back on board and by that time our odds had worsened a bit, but at least we still made money.
The second Superbowl was the epic, Patriots-Falcons matchup. I bet on the Brady-Belichick combo, which in my circle, was a difficult choice since my peers were all going with the Atlanta Falcons. My biggest critic was a childhood friend who knows way more about football than I do. He was a high school star and to this day, a sports fanatic who watches every NFL game. But, even though he nearly talked me out of it -- and oh how I suffered through the first three-quarters of the game -- I'm obviously glad I stuck to my plan. Not just because I was right, but simply because I had the discipline to do so.
In both cases, it was tough with so many going against me. And the last thing I wanted to do was cause my partner to sustain a loss by unnecessarily playing the contrarian -- but such are the quandaries that come with being a social animal.
So, whether it be an expert on TV or an expert at your local sports bar, always remember, it's your money that's being wagered, not theirs.
Make it a disciplined habit to plan your trade, then trade your plan regardless of the avalanche of contrary advice that might come your way afterward. You'll find yourself maturing into more of a level-headed, self-assured professional as opposed to the typical, neurotic, flip-flopping amateur you see haunting the casino floors.