You can learn a lot by watching the highest performing people when they are under extreme pressure, regardless of their field. Their words, their actions, and their body language. In the 2016 National Basketball Association (NBA) playoffs, Lebron James and the Cleveland Cavaliers were down 3 games to 1 in the best of 7 finals series. No team had ever come back to win the NBA championship from such a deficit. In his media interviews when asked about his performance, good or bad, Lebron continued to emphasise the same two points I had heard him repeat in almost every interview throughout the season. He would say:
“I don’t get too high or too low, I stay even keel and will just keep working on my habits.”
To start with, it seemed like the usual ‘athlete talk’ to the media, keeping it simple and not giving anything away as they are trained to do these days. But over the course of the year, it became increasingly clear that this is what he lived and breathed. This insight was as simple as it was profound. He didn’t waiver and led his team as they won the series 4 games to 3 in one of the greatest comebacks in sports history. This is the mindset that makes him one of the greatest basketballers of all time.
Hearing these comments consistently, in interviews during the season and playoffs from one of the greatest athletes ever, highlighted to me what it really takes to perform at the highest level in both the good times and the bad times. The key to performing under pressure isn’t what you may think. It’s not about the spectacular, it’s about the consistent. It’s not exciting, it’s boring. It’s not about the score, it’s about the process and the discipline. If you get that right, if you play the right way, then the score board will eventually take care of itself.
From a psychological perspective, we can learn a lot from elite athletes in managing our own temperament as investors. It’s human nature to get caught up in the hype of the economic good times. Regardless of the macro-economic environment that created it, we expect that is the new normal rather than a boom. Conversely, when the eventual downturn comes, we become overly negative as we see that ‘new normal’ evaporate before our eyes.
As difficult as the past few years have been for everybody, firstly with the pandemic and now moving into an economic downturn and a range of global issues, staying even keel, and working on your winning habits and process are more important than anything else. Remember that nothing is generally as good as it seems and nor is anything usually ever as bad as you fear. There are only certain things you can control, and they are the areas where you need to focus.
So, while I can see there is an ever-growing list of challenges that the world faces the best way to approach it is to be pragmatic. It will not be as bad as many fear and at some point, we will come out the other side to better times. I will always be optimistic about what the future holds for us as investors and for the future of the world more broadly, regardless of how difficult conditions feel. But in the meantime, there is work to be done so we may as well just get on with it. There will be great businesses that emerge from the toughest times, and great investments to be made too.
Stay even keel and keep working on your habits.
General Advice Disclaimer: This information is of a general nature only and may not be relevant to your particular circumstances. The circumstances of each investor are different, and you should seek advice from an investment adviser who can consider if the strategies and products are right for you. Historical performance is often not a reliable indicator of future performance. You should not rely solely on historical performance to make investment decisions.