The Wimbledon Final between Federer and Nadal illustrates the importance of ever changing cycles in sport and the markets. Not only did each set alternate, but the break between the sets was key to a change of fortunes for the players. The first three games of the first set, which Federer won, were fatal for Nadal, as was his inferior stroke production, and how this tired him out in the end. I predict that Nadal will drop out of the top ten within the next two years as his athleticism regresses with old age.

The lessons from this match would all seem to have direct applicability to the markets:

Gravitation: If you looked through every world market as to its performance this year, you'd find the US below about 90% of them. This has been the case for the past three years, and could perhaps indicate that the hatred of the US that permeates the rest of the world carries over to investments, and leaves the US cheap relative to other countries. I hypothesize that there is a gravitational pull from all these other markets to the US.

Palindromic Lesson: People often ask me what I learned from the Palindrome during my 10 years of intimate association, aside from the value of using two cans of tennis balls in a match, being humble about your performance next year, and never admitting to a profit in the past. I would say that his idea that refuted hypotheses are the key to major market moves has much explanatory and predictive power. The most recent refuted hypothesis was that stocks couldn't go up when bonds are down. Last week bonds were down two points and stocks up 2%. Stocks are back to near their all time high, but are not there yet. I hypothesize that they need a refuted hypothesis to climb the last leg.

Death in the Woods: Much too little attention is paid to the death of companies and markets, as a prerequisite to renewed and bounteous growth in the future. A visit to Muir Woods, where fire and wind toppling a tree, leads to a profusion of new growth, from burls, roots, and stragglers, confirms the importance of this theory.

James Tar adds:

During yesterday's match coverage on NBC, there was a videotape comparison of the forehands of Borg and Federer. The strokes are frighteningly similar — the controlled loop backswing, the length and arc of the stroke, the extremely forward contact point, the angle of the racket at contact, and the follow-through just under the left shoulder. Their physiques, too, are almost identical. If you changed the hair and apparel of these players, you might have trouble identifying who was who. The real difference was the racket in each hand.

Borg's forehand was the most feared shot of its day, as is Federer's now. The point is that as technology changes, the foundations of competitive success remain constant. Nadal's strokes are completely different, even inferior. The power he generates is enhanced by the racket he uses. I recently tested the same racket. It does not favor smooth, traditional strokes. The balls flies — everywhere but into the court. Abbreviated, quick, jerky strokes, designed to create spin, must be used to harness the advanced technology in your hand. When the ability to make these incredibly timely movements diminish, so will the end result.

Barry Gitarts mentions:

One thing we can learn from Nadal is how far working harder then the next guy can take you.

Alfonso Sammassimo writes: 

Some points on the Wimbledon final:

1. Changing cycles. Just under thirty years ago one of the greatest ever baseliners won the title for the fifth consecutive occasion. Last Sunday one of the best ever all-court players in history did the same, playing predominantly baseline tennis. In between these two heroic feats, serve and volleyers have taken most of the spoils. Tennis, like markets, is a dynamic game where players discover new ways to counter present styles and tactics. It is a simple but perfect example of ever changing cycles. Greg Rusedski said it so well, "Tennis changes. If you look back in the past, they say it's too slow, then you have eras they say it's too quick. It always balances out."

2. Equipment best benefits those who best use it. While baseliners have benefited greatly from the power that comes with new racquets and strings, so too have the big servers. Nadal does indeed use a racquet that is very hard to control - the fact that he does so well is a testament to his talent, not the racquet. Roger Federer has his racquet strung at 50 pounds which is also extremely difficult to control and provides much power. They both have strings which can help generate a lot of spin. These are two superbly talented tennis players who maximize the benefits of available equipment. 'R' or a Bloomberg terminal doesn't help me trade any better unless I have the ability to utilize them expertly.

3. Speed and agility are often overlooked and under trained. From the first point the most obvious difference between this match and the lead up matches of the tournament was the speed of both players. They are in the right spot at the right time more than the other players. Not only better foot speed, but also better anticipation. Market analogy…

4. Never give up. Federer looked on the back foot for much of the match. Only one break point opportunity during the middle three sets, and down break points in two service games in the fifth. He hung in, and the opportunity came as nerves and possibly fatigue got to his opponent. He took it swiftly as a champion does.

5. Efficiency nurtures longevity. A style of compact strokes and taking the ball on the rise requires less physical effort, expends less energy, is less likely to lead to injury, and most of all can be continued for longer in a career. Agassi and Connors are examples. Fewer trades and less commission, and coming straight in after a decline might prolong my trading account. I would agree that Nadal will suffer as his athleticism regresses with age.

6. Have outs. Much advantage having an all-court game to fall back on, having something else available when you're in trouble. When he was down break points in the fifth Federer cranked out three aces in a row, so discouraging to an opponent who has to earn nearly all his points with longer rallies. It’s good to have mouse holes when in the market.

7. You have to work harder than anyone. Nadal's was an incredible effort, coming so close to winning the running double which has eluded previous champions who aspired for the Grand Slam. He is possibly the hardest worker on the tour and his obsessive and methodical approach to everything from training and practice to the placement of his water bottles might just help him maintain his place in the food chain for longer than might be expected. 



 Just weeks before 'that' tournament, with Federer having conquered all but the French (before Roche joined), it's hard to imagine that the Aussie was not in the camp to get that title on the mantelpiece. How difficult it must be for a player of Federer's standing to put his faith in a coach, even one with such an exemplary history, in order to achieve what still eludes him.

It must be difficult to listen and trust someone else to help make you better when you are already going so good. Tiger Woods did exactly that several years ago when he was already the most dominant golfer ever seen, changing his swing to ensure he would have longevity, and in the process taking the risk that his rhythm would desert him. I wonder what game plan Roger will bring to Roland Garros this year.



 There is a point of view out there that the best performance comes when you're having fun. In my lifetime I have played in more than 10,000 refereed squash matches, and won at least 50 national tournaments, and I never had fun in any of my matches. When I tried to have fun, it was disastrous, and I shudder at what a horse's ass I was on those occasions.

To someone who's a serious competitor, the idea of having fun in a tournament is ridiculous. There's so much work, and so many better athletes that you have to beat. So many officials working to do you in, and so much equipment to properly deploy. So much practice and preparation before and during the event. You might think that this is a matter of individual differences or different sports, and I grant that there are some so great that they can soar so high and so much better that it's possible for them to have fun.

I believe that Sharif Khan and Hashim Khan had fun when they beat me, but they didn't have that much fun when I beat them, on those much too rare occasions.

I do know it's totally wrong to try to have fun in the market — it's much too hard, and there are no naturals. The cycles are always changing.

One of the best things I've done in my operation is to make sure that no one has fun in my office. Every now and then, I catch someone who doesn't get the joke, and I upbraid them. 

I try to suppress all exuberance, and when I hear of some former trader who loves to have fun by trading I know he's a straw man waiting to be exposed, and I only wish I could short his fund. Normally I wouldn't comment on a subject like this but I am sure that all frivolity should forever be knoced out of the speculative arena, especially when even an iota of other people's money is involved. They should have their own fun with money you make for them through serious and scholarly discipline and improvement, with no fun whatsover.

Charles Pennington adds: 

I don't know whether he considered himself to be having fun, but I remember a quote from Rod Laver in which he said that he would just swing for his big shots until they started landing in. If they didn't, then he would lose. I guess he knew that losing when you're having a bad day was inevitable when you're playing at the top of the game.

Regardless, I remember that he was my favorite player to watch when I was a kid. It's difficult to find footage of those old matches now, except for a few minutes of a match with Borg in 1977. Laver is past his prime, but he's definitely holding his own with Borg. His modest height of 5'8'' makes the court look like a football field. Notice the beautiful drop shots he makes, even from near the baseline, which are so startling when mixed among his blasting drives. 

From Alan Millhone:

Your remarks carry over into competitive checkers with ease and are sound advice. When you play in a competitive tournament you had better be focused 100% or get crushed by your opponent. I have not had the proper time to devote to serious study for some time and my game has suffered accordingly. You have to spend time preparing for any tournament. The better players have obviously prepared with diligence.

Our World's 3-Move Champion, Mr. Alexander Moiseyev has often said that he is wary when making a move as his opponent (regardless of their strength) can make any reply move, and their reply may be a very good move. He is watchful in every game regardless if he is playing one of the top players or an average player as myself. You might play 'skittle' checkers at a party for fun on occasion, but in a tournament leave the fun outside of the playing room or suffer the consequences .

" Knowledge is power" in the market, checkers, chess, or any athletic event.

From Russell Sears:

At least in marathoning nobody comes to the line and expects to "have fun." The fans don't say, "look at how much fun he is having out there." The best they used to say of me was "he doesn't even look like he is trying." But believe me I was "trying." It's funny now that I am older, and much slower, they don't say that any more.

It's good to hear from Vic, that it's only the weekend warriors that think it's all about fun even for the serious competitor. The fun is left for after the finish. Or as the old country song goes, "time enough for counting, when the dealings done."

Nigel Davies writes: 

I think there must be a difference between how a games player or sportsman defines 'fun' and how the average person on the street does so.

Steve Leslie adds: 

Here is a profound clarification of fun that is so on the mark from my perspective.

I heard tournament poker pro Amir Fahidi say "If you are not willing to die you cannot live."

George Patton said, "Compared to war, all acts of human endeavor pale in comparison." In the movie Patton there is a dialogue between Omar Bradley played by Karl Malden and George C. Scott as Patton.

Bradley: "You know the difference between you and me George? I do this because it is my job. You do it because you love it."

Upon reflection Patton remarks: "God help me I do love it so."

From Alfonso Sammassimo:

Playing a tournament match with the aim of having fun has only occasionally entered my mind since junior days, simply because it has always been such a costly attitude to take onto the court. In particular I recall matches where I subtly tried to imitate players whose styles I admired and envied, especially when I had only recently watched them, and how badly it affected the score for me, cost me more matches than I can count.

I recently had my first competitive match (our annual club championships) in a while after a shoulder injury, meeting up in the second round against an older fellow who used to tour our satellite circuit and played a for a few years as a pro. He had been playing club matches for months and was in sharp form, typical Australian grass style player. I was very fit going into the match but hadn't played much, and my plan was to just enjoy myself. But after realizing my range was way out and seeing that the guy couldn't hit three high forehands in a row I decided to turn the match into a hack-fest, the only game plan I was capable of executing well on the day.

Fortunately fitness and concentration won the day for me, and as ugly as the game was it satisfying to win knowing that I managed to change plan, use my available strengths to make him push himself to hurt me - no fun involved until shaking hands.

The tournament player walks onto the court to win, and it's no fun losing no matter how fancy you looked - the fun is in the prize. With so many things that need to be done in consecutive matches to win a tournament and the concentration that is required, there is no room to think of enjoying it. My P&L tends to suffer the same fate when I trade for fun or try to get fancy, not playing the game that feels most natural to me. And I have more recently been prone to some imitation of market players, but that hasn't hurt me much.

From Stefan Jovanovich:

What poker has to do with either running or baseball, I have no idea. I do know that Don Schlitz wrote "The Gambler" in 1976, and Kenny Rogers' recording of it was a hit in 1978. As "old" wisdom, that is bit on the short side even for the more synthetic products of Nashville. I will defer to one of the many poker experts like SL to comment on whether players at the table count. My amateur observation tells me that they can tell you the history of every chip they have in the stacks in front of them.

Those of us whose sporting careers were limited to the John Kruk school of athletics ("M'am, I'm not an athlete; I am a ball player") have no way of understanding what Russell Sears knows as a marathon runner. We are even more puzzled by why he is so moved to anger when told that fun is a necessary part of baseball. Baseball is a game that you can only play well after 10 years of daily practice, study and good teaching. The first time a player gets to the major leagues he fails - either mostly or completely. (Tim Lincecum's debut yesterday with the Giants was a "mostly" so he may, in fact, be the next "pheenom".)

If, thereafter, you are hard working and talented and lucky enough to stick at the major league level, you get to fail only 3 out of every 4 tries. If you are that 1 in a million player whom God has truly blessed, you fail only 2 out of 3 tries instead. Precisely because it mostly about failure, baseball has one cardinal rule: you never "show the other guy up". If you do, the guy standing 60 feet 6 inches away holding a rock-hard ball has the right to aim it for your ribs instead of the inside corner; and even the players on your own team will think you had it coming. What almost all baseball players share, whatever their degree of success, is the capacity to find joy in its daily grind of failure and humor even in its worst moments of humiliation.

Rodger Bastien writes:

Have fun all of the time? Ha!! I think the struggle to excel is universal, in any sport. The idea that it's more "fun" in baseball or that the struggle is less is to me absurd. However, I would give anything to be able to enjoy that struggle again! 

Russell Sears adds: 

Perhaps there is an element of frustration, in what I wrote. The original reply was not meant in anger, but from a Spartan spirit. Nigel said it much better.

Age has forced me to run marathons for "fun" and feel many of the same sentiments Nigel expressed. However, unlike Nigel, my game suffers no matter the discipline I bring to it. But discipline can be exhilarating, even in defeat. Discipline can make the game fun.

Nigel Davies adds:

After some further thought I think I know exactly what the fun is in competitive sports (and trading) if you play for blood. It's the intensity of the experience which is completely off the spectrum of those we have in 'normal life'.

A chess game in which one puts everything in can lead one to feel either great highs or great lows, but always the feeling that one is more intensely alive because of the rich tapestry of emotions. Strong players will also tend to have feelings of pride and self-worth linked to good performance, and not necessarily to favorable outcomes, though the two tend to run side by side.

Those who can't bring themselves to play with much intensity are those I'd describe as dabblers. And they'll never be much good because they won't be able to fire on all cylinders.

Rodger Bastien adds:

My intent wasn't to diminish Mr. Jovanovich's knowledge or opinion pertaining to baseball as much as to respectfully disagree with the idea there are absolutes unique to baseball, especially regarding that difficult period at the beginning of a major league career.

I suspect that the first year in any sport at the major league level is especially daunting. The NBA is a prime example where the first or second year is often a year of learning. I'm convinced that these elite athletes do such a good job of making it look easy that we mere mortals can't begin to understand how gifted they are. When we relate our experience playing the game to the game they play at that level it is truly comparing apples to oranges, their game being that much more difficult.

That all said, I have always enjoyed Mr. J.'s musings and am partial to anyone who loves baseball and respectful to their opinions of it as it certainly is expressed from the viewpoint of greatest affection. Now Vic, I am still trying to figure out how you achieved such great success in the racquet sports without indulging yourself in a modicum of fun! Is it that to label it as fun is to infer a lack of seriousness? I know that at the moment of my most outstanding athletic achievement the almost orgiastic release would be defined in many ways, fun being nearing the top of the list.

Stefan Jovanovich replies:

Rodger: I think you are right. I was going to offer pitcher's WHIP stats as an example of baseball's uniquely absolute level of failure and compare that to the number of unforced errors in a tennis match. But, when I looked at the statistics for matches between professional players at the same level of excellence as the best major league hitters and pitchers (the top 25), their ratios of points won on service games vs. double-faults, unforced errors and winners by their opponents were roughly the same - 1 in 3 or 4. I am afraid that I got mesmerized by my memories of looking at the game through a mask and the joys of doing something well, at least at the orange level. 


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