Lessons From the Lions: Grit, Patience, and Planning
The Detroit Lions. Historically, they have not performed well. This season represented a breakout from the norm. Unfortunately, the storybook ending was not to be this year; however, there is momentum for future rewards with this football team and their coaches.
Is it too cliché to write that football, and sports in general, can be akin to financial planning and investing? Perhaps, but I am going there anyways. In this blog I will use the Lions, their Coach and the NFC Championship game to highlight interesting connections to personal finance.
First Half: Nothing Short of Amazing for Lions
Lions – they dominated the first half of the NFC Championship game! Every call that Coach Dan Campbell made worked! Lions players were executing, celebrating, and executing again as it seemed they could not lose after going up by 14 points. Then, with seven seconds left in the 2nd quarter, a chip shot field goal increased their lead at the half to 17 points. Statistically they had an 83.1% chance of winning. Almost a sure bet…
Personal finance – there are times when you feel the market can’t lose! You need not look further than the last two months of 2023. Every index was up at least 12%...and that was just since November 1st!
And if you look at the full year for 2023, you can imagine that many investors in the S&P 500 were doing their favorite touchdown dances following annual returns of 24%. Even better, the Nasdaq skyrocketed! Investors grossed 43% in what was akin to an MVP year for the tech heavy fund.
Second Half: Lions Risk It, Lose Their Biscuit
Lions – they are not a good 3rd quarter team, but during the season they mostly overcame this ugly fact. Not this time; their follies proved too many to recover. A risky fourth down call by Coach Dan Campbell! Missed catches by Lions receivers! A crazy reception by 49ers off of Lion’s facemask! A fumble! Another risky 4th down call!!! A 17-point lead morphs into a 10-point deficit. How did this happen??? In the end, Lions lose a soul crushing defeat!!!
Personal finance – there are times when you feel the market can’t do anything but lose! You need look no further than 2022. The Federal Reserve started the year with a fed funds rate of 0.25% and raised seven times to 4.50% by the end of the year! 2022 saw a historic rise in interest rates which coincided with a brutal beat down of both the stock and bond markets. There was no place to hide! Even cash was a loser's game as inflation raged as high as 8.3% (meaning that purchasing power of the dollar was down by that amount). And the markets? Take a look below. They were ugly. Everything, save the Dow Jones, was down double digits.
Strategic Plans are Long-Term and Durable, Not Short-Term and Fragile
Coach Dan Campbell and the Detroit Lions organization have built a team around grittiness. Their strategy involves a search for talent that fits into their team’s “gritty culture” of practicing and playing hard. It’s starting to pay dividends.
Financial plans are strategic plans and they too require grit. Why? Because psychologically it’s easy to abandon a plan at the first sign of trouble. This has many implications for investors. For example, imagine bailing out of stocks or bonds at or near market lows because of the emotional bias for action. This can and often does result in significantly reduced returns. What’s more, it creates another problem: how do you buy back into the market without paying higher prices? The odds are stacked against you in this situation.
A good coach knows a plan for building a team is going to take time. Notably, Coach Dan Campbell didn’t realize much success until his third year. But now, it seems the Lions can build exponentially upon their successes and continue to compete at a high level.
A good financial planner likewise knows that plans take time to build, implement and accrue returns. Fortune favors long-term planning, patience and grit. When done well, these financial plans are durable and so too are the investment results.
Go Lions! Go Financial Planning!