Saturday Serendipity
Quote, Mental Model, Interesting find.
Hello!
Reading time: About 4 minutes
Quote
“Amateurs think in absolutes. Professionals think in probabilities.” - Shane Parrish
Mental Model
Playing to the merit
Today we have a mental model from the sport I love. Cricket. Playing to the merit of the ball is something every batsman learns since the start. You are supposed to punish the bad balls and respect the good balls.
This model is very similar to the one that Buffett spoke about in baseball.
“If he waited for the pitch that was really in his sweet spot, he would bat .400,” Buffett explains. “If he had to swing at something on the lower corner, he would probably bat .235.” Buffett
This was picked up by Buffett from the book ‘The science of hitting’ in which the emphasis was on knowing your sweet spot.
Now in cricket it is more or less the same thing. The best way to see it in play is seeing test cricket. It is a battle of patience. Test cricket to me is a very entertaining format.
Imagine a fast bowler coming in to bowl with full energy and the batsman does nothing but leave the ball. The fast bowler slogs his ass off just for the batsman to leave and defend the ball.
I just described Pujara and Dravid as batsmen. They wear the bowler down who is bowling at 140 clicks. The bowler is bound to make mistakes as well and bowl one loose ball in the overs he is bowling, those balls they will not fail to score runs. They are the masters of playing to the merit of the ball.
Test Cricket is a game of patience, the bowler tempts you to sort of chase the odd ball outside the stumps and get a knick behind to the slips. As a batsman it is your job to keep your focus on for long periods of the game and trust me this is not as easy as it sounds.
In Investing
Now the last paragraph has so many parallels with investing.
Investing is a game of patience, where Mr market tempts you and challenges all your psychological biases to act when you are not supposed to act. Your job as an investor is to focus on your areas of competence and operate within it and find companies which are great quality businesses and available at a valuation which is fair.
This sums up how to invest successfully and it is very similar to the way Test Cricket is played.
Both investing and cricket are games which are simple to understand but not easy to implement.
In Business
Playing to the merit of the ball basically means act only when the opportunity presented in front of you makes sense.As a businessman your goal is to do the same thing.
You don’t want to take up any opportunity that comes your way to expand your business. What might look like a lucrative area to venture can be the end of the business. Most of the time businesses tend to act when there is actually no need to take action. This is similar to the do something bias. Human nature makes us want to take action and 90% of the time it is the wrong decision. So as businessmen every opportunity presented should be analysed like a batsman analyses a ball coming to him. Whether it should be left, defended, driven, lofted, etc. is the decision the business has to make.
Conclusion
All in all this mental model is basically just a check of making informed decisions before you take action. Most of the times we react to a situation in the wrong way and it costs us big time.
This is something we can learn from the sport of cricket.
You can also interpret this to your circle of competence mental model. Playing to the merit of the ball is playing to your strength. So you can play to your strengths in everything that you can think of. Whether it is sport, investing, reading, etc.
Interesting find
That’s it for this week!
Enjoy your weekend!