Bull & Baird: The Wisdom of Golf
Anyone who has ever played golf knows what it feels like to experience a wide range of emotions. From the sheer joy of a pure iron shot to the agonizing despair of a three putt, golf will make you endure all the feelings our human brain has to offer. You know what else does this to us? Investing. The last time I walked 18 with a few friends, I realized that golf and investing have so much in common that I needed to write about it.
They say golf is “a good walk ruined,” which I love. We take something so simple and ruin it with crooked sticks, an impossibly small ball to hit, and a million dangers lurking around every corner. Meanwhile we put our money into the stock market, a simple act in and of itself, and we ruin it with inflation, war, fear, politics, and a 24hour news cycle. But there are lessons from golf that can help us navigate our investing journey. So grab your bag, maybe a hat, and about a dozen balls (I’m bringing two), and join me while we explore the wisdom of golf.
Managing Fear
We stand on the 17th tee at Whistling Straits, aptly named “Pinched Nerve”. In front of us is a 223-yard Par 3 with water on the left and mounds of sand on the right. There is nowhere to land the ball safely other than on the green. Danger lurks everywhere. It will take courage to successfully navigate, but it is possible, and we’re going to do it.
When you put your money into the stock market you must accept the fact that the World is a scary place. You will never sit back and say: “I’m comfortable with the entire world, all of our politics, and how things are going.” Not only that, but the most dangerous events will also never be seen in advance. The 3 biggest threats of the past 25 years were Covid, the Global Financial Crisis, and 9/11 which no one saw coming. Fear and uncertainty are unavoidable.
But that doesn’t mean you can’t succeed in growing your wealth. While danger lurks, so do advancements like AI, GLP drugs, the internet, an iPhone, and a whole host of other things that grow and compound money. Every successful investor from history acknowledged that they were scared along the way, but they endured and reaped the rewards.
The best golfers in the World know that courses are rife with dangers, but that doesn’t stop them from playing. Mastering their fear is how they succeed and the same is true for you.
Mistakes
“I think your ball is over there in the rough”
How miserable is a bad tee shot? I can’t think of anything more frustrating than slicing a ball into the rough. Maybe dealing with a 16-year-old? The DMV? Burning the roof of your mouth? Mistakes are bound to happen in golf because unless you can hit the ball perfectly every time, physics will take over and you’re bound for the rough.
One of the keys to golf is mistake management. Knowing what to do after something goes wrong or having the foresight to avoid a mistake in the first place. Professional golfers who win are really good at recovering from a mistake. But you know what? They have help, and it makes all the difference in the World.
Tiger Woods is arguably the greatest golfer of all time. He was blessed with a perfect swing, mental toughness, and an indomitable will to win. Did he do it alone? Nope, at every single tournament he had a caddie because Tiger knows a caddie is invaluable. They calm golfers’ minds, warn them of danger, help them out of tricky situations, and share their expertise.
The human brain is not wired to be a good investor. When our brain senses fear it overwhelms rational decision making. Evolution made us an extremely risk averse species so having someone outside your head, immune from that fear, giving solid advice, is akin to having a caddie read every putt. Also, the financial world is extremely complicated and there is more to it than just investing. Taxes, Planning, Charitable giving, Estates, a whole host of things that having an expert by your side makes so much easier.
The best golfers in the World don’t go it alone, why would you?
Being Average
Golf is a really hard game. The average golfer in the United States shoots 100. Yep, that’s right, 100. Less than 10% of golfers tracked by the USGA shoot par or better. All of this leads me to wonder….is being average enough to enjoy golf? I think it is and let me tell you why being average is enough for an investor too.
Most golfers just want to go out and have a good day. Golfing is a chance to be with friends, have a few laughs, get some exercise, and forget our worldly cares. If I can do that, while being average and shooting 100, then so be it, my day will be worth it. I don’t have the time (or patience) to put in countless hours on the range for the slight chance to shoot 90. Average golf is enough.
My friend Morgan Housel, author of the best investing book of all time (The Psychology of Money) once said: “average returns for an above average period of time = extreme outperformance. It’s the most obvious secret in investing.” You don’t need to be a top 10% investor (or golfer) to succeed at reaching your goals. If you got “down the middle of the fairway” average returns, over a long enough period, you would be one of the best investors ever. The S&P500 turned $100 into $352,000 from 1950 to 2024 using just the average return. Were there ups and downs along the way? Absolutely, which is why having that caddie helps so much.
The 19th hole
Golf is so much like our everyday lives. An adventure filled with excitement, success, elation and triumph, coupled with frustration, worries and failure. The feeling of a birdie is like the feeling of success at work. Hitting a ball into a bunker is no different than dropping a glass on the floor, rage inducing. Watching a friend hole out from the fringe is like watching your kid get first place. Three putting is as frustrating as a parking ticket. The parallels are endless.
Life, the best version of it, is about sharing a journey with family and friends, which is why the 19th hole is so important.
The 19th hole is the best part of golf. A chance to sit down with your friends, tell stories, enjoy a refreshing drink, and bask in the warm glow of camaraderie. No matter how many strokes you took, or how frustrated you got, or how many balls you lost, when you sit with friends and laugh about it all of those emotions are swept away and replaced with smiles.
Life is meant to be lived, to be enjoyed, to be shared with others. Don’t let the World scare you so much that you forget to savor the journey. Find your 19th hole as often as you can, for it is there you will find peace and serenity.
I hope you enjoyed your day on the course and the next time you swing a club you remember all the lessons golf has to teach you. Oh and if you’re ever in Wisconsin drop me a line, I’d love to launch a dozen balls into Lake Michigan with you.
