Learning investment strategy from 4 great football moves

Managing a portfolio is all about making the best use of resources available to you before taking an investment decision. Getting your research, execution and your risk management together is the key to managing your portfolio.

Jun 20, 2018 09:06 IST India Infoline News Service

Great football stars have signature moves associated with them. These trademark moves, in many ways, define what sets these players apart. While most of them are complete players in all regards, there is one move about them that immediately comes to mind. Interestingly, each of these trademark moves also provides some unique portfolio insights. Here are 4 such trademark moves and portfolios insights that you can glean from them.
 
The Cryuff Turn: Flexibility is the key
Johann Cryuff is undoubtedly the greatest Dutchman to have graced the football field. Also called the Flying Dutchman, his trademark move was the sharp about-turn that he would make on the football field confusing his opponents. What was unique about Cryuff’s turn was that he would execute the turn in a series of different ways that made him absolutely unpredictable.

What are the portfolio insights that one can gain from the Cryuff turn. Managing a portfolio is about two things. Firstly, you have got to be prepared that no two situations are alike and hence you need to tweak your strategy for each situation. Secondly, the Cryuff turn is all about flexibility. To successfully create wealth over the long run, you need to be flexible in your approach to managing your portfolio. The more flexible you are, the more adaptable you are to macro and micro changes. That makes the difference!
 
The Ronaldo Chop: Make the best of available resources
 
What is so unique about a Ronaldo Chop other than the fact that it was popularized by Cristiano Ronaldo? It involves dribbling the ball with your favourite leg forward and using the inside and the back of the leg to good effect. The Ronaldo Chop is extremely confusing and is all about making the best uses of all available resources in a given situation.
Managing a portfolio is all about making the best use of resources available to you before taking an investment decision. Getting your research, execution and your risk management together is the key to managing your portfolio. You not only need to perform well but also better than your peers and competitors. That is possible by making the optimum utilization of accessible resources and equipment that are available at your disposal. 
 
The Messi Free Kick: Capitalize on the window of opportunity

A free kick is not a regular occurrence. In football it is gifted to you on rare occasions. And in the many years of football there have been few players who executed the free kick more brutally and with greater precision than Lionel Messi. The free kick is all about making the best of the little window of opportunity and advantage that is available to you.
 
What are the portfolio insights from the Messi free kick? Typically, your portfolio alpha comes from those few chances that you get. You could have identified a disruptive stock or an overpriced stock or an erstwhile leader that is awfully under-priced. Creating an alpha for your portfolio is all about seizing the golden moment and it comes to you in the form of a free kick. If you don’t make the best of it, you only have yourself to blame.
 
The Neymar Flick: Think out of the box
 
Imagine you are up against the Brazilian superstar, Neymar. You are rushing towards him and he nonchalantly flicks the ball from above your head and collects the ball from the other side with precision. Zidane also used to do it but the number of tricks that Neymar brings to the flick makes him truly incredible. It is true test of your out-of-the-box thinking in a jiffy.

As an investment portfolio manager if you think along traditional line, where is the alpha going to come from? It obviously isn’t. The idea is to think out of the box. Use a technique that cannot easily be replicated. If your investment strategy can be modelled and replicated, then the alpha will vanish. It is only when you keep surprising with your out-of-the-box ideas that you will really generate alpha on a consistent basis. That is what the Neymar flick teaches every portfolio manager. Be different; each time.
 
There are more such trademark kicks but these are the four that are most relevant from a portfolio strategy point of view. Try them out!

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