Five Boxing Principles That Made Me a Better Investor

I grew up in a very male-dominant household. My father is self-employed and has been from a young age, having made his own way with an asphalt paving business. The only movies I ever remember him watching were morally driven, real-justice-wins-in-the-end sorts. The kind with guys like Clint Eastwood and John Wayne. They always knew that winning in life wasn’t about the spotlight, it was about boxing against the enemy within, as much as without.

While he was never into athletics, my old man always had plenty of respect for Rocky Balboa and that rubbed off on me. Along the way I learned to box by hitting the old beat up heavybag in the basement. Over the years I’ve come to look back affectionately at boxing as having had many positive impacts in my life.

Years later, I recognize that there were five vital boxing principles I gleaned from years studying the sweet science. I feel they’re worth sharing with you.

1) People Never See The Amount of Work You Do

The life of a boxer can be a lonely path to tread. Think of the most moving, inspirational images of any boxer; it’s probably them running down a trail, alone, in the dark, with a hood up over their head. Rising before dawn to get that roadwork in, there is no one to tie the boxer’s shoelaces. Nobody is helping them out of that warm bed.

All the external world ever gets to see are the outward results. The victories, the trophies, and perhaps the bitter defeats.

What the boxer calls roadwork and preparation for an opponent, as an investor I call due diligence. I spend countless hours researching investments from every angle. I want to know where I can go wrong every bit as much as where I can go right. That’s what determines ultimate victory or defeat. By fight night, or the moment I am prepared to pull the trigger and purchase a stock, the hard work better already be done. Afterwards, positive or negative consequences will follow; they say the money is made or lost when you buy, not when you sell.

The hours the fighter spends shadowboxing alone with their thoughts, or an investor spends sifting through annual reports, quarterly conference calls, and whatever else they can get their hands on, all contribute to the end goal. Stephen R. Covey, in his incredible text “The 7 Habits of Highly Effective People” covers the necessity of living a disciplined life; the foundation of success is built on achieving private wins before the public victories become possible. We are each compelled to dig deep internally before we are able to shine our light for others to see.

2) Fighting Desires: Deferred Gratification

There’s an old saying that there is “nowhere to hide in the boxing ring”. If you haven’t put in the work, it will show when the lights shine brightest.

The key to maximizing one’s odds of winning in boxing is to train properly. Training properly involves eating well, living right, and avoiding vices. It even gets harder once material success has been attained; how to keep that hunger once the hunt seems over?

It takes a strong spirit to maintain keep one’s eye on the prize once it seems to be had. Do the right thing today and reap the reward tomorrow.

One of the tenets of personal finance is to spend less than you make and invest the difference. On the same vein, we’ve all heard the advice to pay yourself first. Both of these inherently require self-discipline to forego the impulse to burn the candle at both ends and spend all resources available.

Boxing teaches us that to improve, it is necessary to keep putting something back in the tank to compound the returns. The more you train, the stronger you get. The more you save for investing, the bigger your portfolio will grow. Do what you need to do today so that you’ll be in better shape tomorrow, physically or financially.

3) The Rock-Paper-Scissors of Boxing: Styles Make Fights

The 1970s are often looked on as the “Golden Era” of heavyweight boxing. A long list of fighters from that era remain today as household names. The three standouts from the period were Muhammad Ali, George Foreman, and Joe Frazier.

In the ultimate game of rock, paper, scissors, it turned out early in the decade that Frazier beat Ali in the “Fight of the Century”, Foreman then demolished Frazier, and then Ali ultimately won the championship back from Foreman in “The Rumble in the Jungle”. Looking in from the outside and through the lens of most other sports, one might conclude that the best fighter should simply win most fights. Certainly, it would have been no easy task ahead of time to predict that each fighter would somehow provide the perfect foil for another of the triad.

Every opponent requires a particular plan. Taking each challenge in exactly the same way is a recipe for disaster.

As an investor, it is important to have a healthy amount of diversity within a portfolio of stocks. To adequately research them requires understanding the differences and nuances to make a well-reasoned judgment. Attempting to value a technology company such as Facebook (FB) through the same lens as you might apply to a railway such as Canadian National Railway Company (CNR) simply doesn’t work. Each company requires a fresh look as there are always differences that must be respected and accounted for.

Being one dimensional as an investor is as financially dangerous as stepping into the ring and trying to do the same thing against all comers.

4) To Be The Best, You’ve Got To Beat The Best

Life is a continual series of challenges. Hurdles to be overcome, obstacles to be met head on. When a boxer is coming up in the game, they are defined by the fighters they’ve beaten. The quality of one’s opposition and one’s willingness to take on the best challengers is what truly separates the best from the rest.

This point is really about a mindset. Who doesn’t remember the phrase (and song) “The Eye of the Tiger” from Rocky III? It is a cornerstone of boxing lore that has fully crossed into the mainstream.

As an investor, the challenge I face is to stay current and never grow stale. Today I might feel comforted that many of the Canadian banks boast over 150 years of consecutive dividend payments. If I hold and never challenge that belief, perhaps I’ll be wiped out by cryptocurrency which is on the rise or by some other foe I’ve overlooked.

The best I need to beat is the best version of myself from the day before. I need to step out of my comfort zone and keep learning. Then, I need to apply those learnings within my portfolio to ensure I have a solid foundation on which to continue growing my wealth.

I mentioned that there’s no safe place to hide in the boxing ring, and that is equally true of the financial markets. There’s a heavy price to pay for security. In boxing, it means no one will remember your name as nobody wants to watch a boring, mismatched fight. In finance, absolute security means poor returns where you’ll take a shellacking from the silent threat of inflation.

The lesson is to welcome the adversity and keep being the best you can be.

5) Learn From Role Models

One of the great myths of our society is that anyone is entirely self-made. There’s not a single person that was born, raised themselves, came up with all of their own ideas, and then crafted a successful life. We’re all on the shoulders of giants, whether we care to admit it or not.

As a boxing purist, I’ve spent countless hours studying practitioners of fisticuffs going back over a hundred years. As I learned the craft, I would stand in front of the mirror and practice moving like Marvin Hagler with a high guard and my chin tucked in. I’d roll my shoulder like Bernard Hopkins in anticipation of punches to slip. I’d stick the jab like Joe Louis or Larry Holmes. I took the best of what they each respectively had to offer as I put together my own arsenal, both offensive and defensive, thinking that if it worked for them, it could work for me, too.

While the gods of finance may not carry the physique of a world class boxer, they surely have plenty to emulate for a would-be world class investor.

If you’re reading this article, you’ve probably also heard the names Warren Buffet, Benjamin Graham, Peter Lynch, and all the others I’ve encountered along the way. To hone my craft, I studied their words and their lives. I decided that if I wanted to be the best investor possible, I needed to see what those who have come before did. As with the boxers, I decided it made most sense to take what I need from their wisdom and leave the rest. Each person is different and ultimately must chart their own unique path, but we can still each be inspired by those who have walked before us.

Concluding Thoughts as a Boxing Investor

If we look closely enough, we will each find crossover points in our lives where lessons from one domain allow us to be better in another. Who we are today is a representation of all we have experienced over the course of life.

The lessons I have learned from the sport of boxing have influenced me to be, I believe, a better investor than I would have been had I never laced up the gloves to begin with.

It is my sincere hope that you will also find value in the lessons I’ve learned. Just remember that even when you get knocked down or take a loss, as long as you get back up and keep grinding, you’re never out of the fight.

Thank you for reading.

Ryan

Full Disclosure: Long CNR

Pictures courtesy of pixabay.com