Golf, from James Sogi

August 19, 2007 |

 On a detour on the way home from New York I ended up in Napa playing golf. It is an interesting game and filled with market lessons and insights into human nature.

Despite our veneer of self control, golf exposes the truth of the matter, that we really have little or no control of many actions at the peripheries happening in real time at high speed. Only lengthy training and discipline and years of work allow some semblance of consistency. How true this is of market endeavors, especially beginning with the lack of consistency and lack of control, and the process of how this changes as the years and "mastery" or at least journeyman skills develop.

In golf there is a constant battle of over-correcting. One shot is too long. The next shot is too short. Correct left, too far; correct right, over-shoot. Putt short, overshoot. Constantly hysterias of overshooting combined with an emotional overlay of frustration, anger, and exertion. Perhaps it doesn't sound like fun, but in fact the process is enjoyable.

Markets seem to exhibit the same tendency to over-shoot, on a minute to minute basis, on a daily basis, and on drops like the current one, and the prior midsummer run up. All a processes of overshooting and over corrections. It seems a natural process innate to the human condition. Thursday's drop off, clearly an overreaction, followed by the inevitable over-reaction back up.

Another curious phenomenon occurred on the links amid the vineyards. Some holes looked long and the water big from the tee. Shooting big resulted in overshoot. Walking down the hole "clicked" into proper perspective and scale, and the lake seemed smaller, the tee closer. It was a sudden shift in mental framework and perspective, which could be linked to volatility as the perceived framework clicked back to a proper perspective. The same shift of scale and perspective seems to happen with some regularity in the markets.

It is interesting how quantitative models can lead to new qualitative insights in the natural world. This is the scientific process Vic has shown to be fruitful in the market. One of the weekend's discussions was about Einstein's mind experiments; the elevator and the pinhole and light leading to an understanding of the special relativity and the bending of light. So simple but so profound. Such mind experiments lead to testable hypotheses and many market insights.

Russell Sears writes:

There is an old memory trick where you place the word/phrase/date at points on a familiar journey. It is then easy to pick them up as you travel that journey in your mind. Survival often depends on being able to get home or back to the family, hence most people remember location/directions instinctively and have higher portion of memory circuitry assigned to this task.

What I realized after I started running was that I generally remember the perspective and order of things the way out much better than the way back. And after having run a trail a time or two, and then not run it for awhile, I was much more likely to get lost on the way back since I assumed it was known and did not pay proper attention to landscape changes.

So for me the real test remembering a list is if I can "pick-up" the list going backwards towards "home" and/or switch the "season" of the trail from the mental season I had remembered the list. 

Steve Leslie comments: 

Due to the complexity of the game of golf there is a list of points to mention.

  1. Golf can never be mastered nor is there such a thing as a perfect round of golf.
  2. Golf has innumerable variables which can come into play such as trees, weather, grass, wind, bushes, water hazards, sand traps, etc.
  3. It is not always the hazards you detect that can ruin your round but the hazards that you did not account for.
  4. Most of the hazards in golf are in front of the green or alongside it but rarely behind it.
  5. People have died on the golf course due to lightning strikes, heart attacks, assaults and accidents.
  6. The better the equipment used the better the likelihood of success.
  7. The greatest who play the game are humbled and abased by its brutality.
  8. A golfer can shoot a low score on one day and implode the next. Or a golfer can make a birdie and on the next hole post a bogey or worse.
  9. Golfers are constantly comparing themselves to others by scores.
  10. Golfers remember their good holes and rounds and forget the really bad ones.
  11. There is a certain camaraderie in the game.
  12. Professional golfers do not get paid if they do not make the cut and there are no guarantees.
  13. It is absolutely essential to learn the rules of the game.
  14. It is virtually impossible to learn to play the game of golf at any level of success without professional instruction.
  15. And finally, the best golfers take the most lessons, have a mentor or are lifetime students of the game.


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