Something unusual happened in 2017.
In the World Cup of Darts, the unseeded Singaporean duo Paul and Harith Lim made the headlines after upsetting the odds, eliminating top-seed Scotland in the opening round.
As a seven-year veteran of the darts circuit in Singapore myself, I am glad to see two of my fellow countrymen make a dent at the world stage.
You need real skill to achieve such a result.
Thankfully, when it comes to investing, you don’t require as much talent.
But there are a couple of key lessons we can learn from Paul and Harith’s adventure of hitting the bull’s eye.
Perfection is fleeting
In 1990, Paul Lim became the first person to hit a “nine-dart leg” in the World Championships.
A “nine-dart leg” is a perfect leg of darts, with nine consecutive arrows hitting the target.
That fleeting moment of perfection served as a launchpad for Paul’s darts career, earning him fame and popularity amongst the darts fraternity worldwide.
But the “nine-dart leg” is extremely rare.
The world had to wait for 19 years to witness this amazing feat again at the World Championships.
And no player has ever managed to hit back-to-back nine-darters in an official tournament.
Similarly, no investor can be perfect.
Without a crystal ball that can see into the future, we cannot accurately predict the fortunes of companies.
Companies may suffer from intensifying competition for market share, macroeconomic factors not within their control, or simply mismanagement.
But just because we cannot be perfect in our investments should not stop us from investing.
Even legendary investor Warren Buffett has made his fair share of mistakes over the years.
What Smart Investors should do is to ensure that we do adequate research on the company before making a decision to buy or sell it, thus reducing the chances of making a bad investment.
A psychological battle
In darts, players are always looking for ways to gain a psychological edge over their opponent.
Some participants take to trash talking, displaying over-enthusiastic celebrations, or retrieving the darts from the dart board at a snail’s pace to disrupt the rhythm of the match.
But any dart player worth their salt will tell you that the difference between winning and losing is often the ability to keep your emotions in check and avoid falling for distractions.
A similar mindset can be very useful when navigating the stock market.
That is because there are various investment pitfalls and psychological biases that can trip up investors.
For example, one may get emotionally attached to a stock, hindering the ability to remain rational.
Or an investor might keep waiting for stock prices to drop to the low of March 2020 before entering the market.
Dart players often try to enter the “zone” when stepping up to the throw line.
The “zone” is a mental state of extreme focus on the bullseye, where the player can suppress any emotions and overcome distractions.
When it comes to investing, the concept of entering a “zone” can also be useful when you review a buy or sell decision.
Get Smart: Practice makes us better
Although perfection is unattainable, professional dart players continue to put in the hours on the practice board.
Every practice session helps them build confidence and muscle memory, which will make it easier to enter the “zone” in decisive moments.
As Smart Investors, we should also continually hone our investing skills.
While we will never achieve total perfection, we can at least boost our chances of enjoying the delight in finding winning stocks.
And if we do so, we stand a better chance at upsetting the odds in achieving more than we expected, like Paul and Harith before us.
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Disclaimer: Herman Ng does not own any of the companies mentioned.