When professional golfer Billy Horschel gave an interview after winning the Memorial Tournament a couple of weekends ago, I couldn’t help but notice that many of his comments were as applicable to investing as they were to golf.
First and foremost, he talked about the importance of using a reliable system.
Follow a process
Horschel tends to do things quickly. He walks fast, talks fast, and makes decisions fast — sometimes too fast. The process, or pre-shot routine, that works best for him is to slow things down a little. As Golf magazine described him, “Horschel is, shall we say, one of the more energized pros out there, so he says he needs a second or 15 before a shot. Talk it through. Check the yardage. Check the wind. Pick the club. Feel right. Then hit.”
Left to his own devices, he tends to drift away from that process. He starts moving too fast. As Horschel put it, “Sometimes when I get a [yardage] number, I just grab a club right away and sort of have an idea of the shot I want to hit and then I go…. I’m impatient, and so I’m ready to go without always being clear on everything. Sometimes I just want to get the golf shot over with.”
That’s exactly what happened in the two tournaments leading up to the Memorial, resulting in a 68th place finish at the PGA Championship and a missed cut at the Charles Schwab Challenge.
He credits getting back to his tried-and-true slower process for his win at the Memorial. Why did he move away from it in the first place? “Am I an idiot for not doing what I know works every time? Yes…. I need to do a better job of it. If I’m going to win the golf tournaments I want to win, and I feel like I can win, then I need to do a better job of it on a daily, weekly basis, especially when it comes to the bigger events.”
As regular readers know, we preach the importance of process all the time at SMI. There’s a simple, objective, mechanical process behind each of our strategies. Just follow the process.
But it isn’t always so easy, is it? After all, there’s a difference between “simple” and “easy.” It’s simple to receive instructions once a month to sell one fund and buy another. But when the market is falling and a fund you were instructed to buy is falling right along with everything else, your emotions start screaming at you to “Do something!” Like Billy Horschel, you can be tempted to quicken the pace — to not want to wait until the next strategy update before making a change. Far better to stay with the process. (Read Drawdowns – They're a Drag, But a Fact of Life.)
Horschel’s other takeaway was the importance of not going it alone.
Accept outside help
Horschel said his fast-moving nature can sometimes get in the way of listening to his caddy, Mark “Fooch” Fulcher. “He’ll try to chime in and sometimes I’ll shoo him away, unfortunately. Fooch does a really good job… [but] sometimes I’m short and I don’t want to listen.”
So, slowing things down — getting back to the process that has led to their greatest success — has meant taking the time to listen to his caddy and making sure they’re both on the same page.
“There [were] a couple times where I’ve [gotten] maybe a little quick this week, and he’s sort of pulled me back. And there [were] other times where we thought we had the shot and then I wasn’t sort of fully committed, and I backed off and we talked about it a little bit more to make sure we were hitting the right shot with the right club and doing things to give ourselves the chance to succeed.”
We often describe the SMI newsletter's approach to investing as “DIY– with help.” You’re the golfer, we’re the caddy. You’re the investor who makes your own trades. We’re the helpers who offer investment strategies and recommend which funds to invest in. Even in good times, it's difficult for any of us to invest completely on our own. But especially during years like this one, when volatility is high and fear dominates the headlines, we need to listen to a voice of reason and reassurance.
Follow a process. Accept outside help.