The Game Is Different

“New England tried to play action earlier. I can’t see it here. This has to be a run.”

That was the game-winning touchdown call Tony Romo gave before Tom Brady handed the ball off to Rex Burkhead to send the Patriots to the Super Bowl.

Romo has become somewhat of a media phenomenon after he was able to correctly predict plays before they happened. According to the Wall Street Journal, Romo made a total of 72 play predictions on-air this season and got 68% of them right! Not bad.

This begged the question: Why can’t a team hire a person like Tony Romo to diagnose what the offense is going to do and then counteract it? Why can’t there be a Tony Romo-type person playing middle linebacker and calling plays? Shouldn’t teams be hiring him as a Defensive Coordinator?

While that remains to be seen, what Tony Romo has going for him is 14 NFL seasons as a QB and a birdseye view of the football field from the broadcasting booth he shares with fellow commentator, Jim Nantz. Romo has all the knowledge of an NFL offense and how a good quarterback should exploit a defense. But his biggest advantage is perspective.

It’s a completely different game from the eyes of a defensive player who is on the field.

To show you that perspective, here’s a look from a referee cam of a college football game between Wisconsin and Minnesota:

Two observations: football sure looks weird and this is absolutely chaotic!

As a defensive player, you have seconds to adjust to a personnel or line shift from the offense, then communicate it so all 11 people are on the same page, and then go make the play.

I think baseball legend, Mickey Mantle was spot on when he said, “You don’t realize how easy this game is until you get up in that broadcasting booth.”

Coaches coach, commentators comment, but players play.

Perspective is everything.

***

In investing, we’re all aware of the good practices one should follow in order to make money:

  • Invest for the long-term
  • Don’t sell in a panic
  • Buy high-quality companies
  • Diversify

People with Ph.D.’s and CFA’s write lengthy books and white papers about why each of these is important, and how these are the smartest things that you can do to build wealth. But their perspective is from above in a closed environment. They are expert financiers with full knowledge of how one should act in a given situation, not how it feels on 3rd down with a racaus crowd and a SuperBowl on the line.

The game is played by you and me with our own money trying to find a way to not run out of it. Once your money is at risk, you feel more like a linebacker in the midst of chaos. The game seems easy from the sidelines, but perspective is everything. Once you’re on the field, you’re playing a completely different game.

One of the best examples of this is Nobel Prize-winning economist Harry Markowitz. In 1990, Markowitz won the prize for developing a theory for how wealth can be optimally invested in assets. The so-called Capital Asset Pricing Model or CAPM was created – a very complicated formula. But when asked how he invests his own money he said, “I visualized my grief if the stock market went way up and I wasn’t in it – or if it went way down and I was completely in it…So I split my contributions 50/50 between bonds and equities.

Markowitz won the Nobel for a formulaic investing breakthrough but was incapable of following it himself!

Listening to Romo commentate and break-down defenses was sheer bliss for a football junkie like myself. But it would be wise to remember that’s all it is – entertainment. Reading and increasing your knowledge about financial topics is great and figuring out how to allocate your resources efficiently is important, but we can gloss over the most important fact that it doesn’t matter what you know in a clean environment out of sample case, what matters is what you do when you’re playing the game and things get chaotic.

Sources
Tony Romo calls plays before they happen (WSJ)
Your money and your brain

Now, here’s what I’m reading/listening to:

Eugene Wei – tech, media, and culture (Invest Like The Best)
How I built this: SoulCycle (NPR)
What’s in the bags NBA players carry (WSJ)
So you just got traded…now what? (ESPN)
Flagstick in or out (WSJ)
Tim Shaw: Letter to my younger self (The Players Tribune)
The other side of the equation (Collaborative Fund)
Tibet basketball (The Atlantic)
Start-ups rejecting VC (NY Times)


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