Why investing is just not cricket

It doesn’t matter that I know very little about these sports. We all know very little before we know a lot. What is important is a willingness to admit you know nothing at all, and still be willing to learn and fail. Arrogance and pride can be the downfall of many. At inthallo, we live by a philosophy of continuous learning. ChatGPT does wonders, a curious mind and desire to ask questions does just as much. Fresh eyes can bring new perspective, which, combined with deep research and expertise, can lead to outsized returns.  

What I have experienced of baseball, involved a 3 hour game with 1 run. What I enjoy most about cricket is some blokes chatting nonsense on Test Match Special. Seemingly, in both sports not much is happening. Both sports require patience. But behind that swan-like patience is hours of hard work, missed shots, experimenting and failure. It is only the exciting parts that people remember, but the work you do around the excitement, is what will get you there in the first place. We may not come up with an investable idea every day. But being able to be patient and put in the legwork day to day, should bring us investment ideas with outsized returns over a long time horizon. 

From a batsman’s/batter’s perspective, these can seem very solo sports. It's you vs ball. In investment management, the majority of our time is engaged in research. This can, at times, feel a very solitary retreat. It can be done in an ivory tower with a pile of books and not much engagement with the outside world. However, from our perspective, results are always improved by engagement with a team, both internally and externally. We strive to share early and often. In person interaction and the ability to learn from, rely on, and teach others is an invaluable part of our day to day.  

All sport is much about gut feel. You have to learn where you can trust your instincts, and where lie your blind spots. When I mentioned the working title of this article to a friend, he rolled his eyes and asked why investors loved describing their work via obscure analogies. The answer to this is easy, we have the best job in the world and like to share it with people in a way that makes us sound clever. But also, as the old adage goes, this work is very much an art rather than a science. It is hard to pin down what exactly we do because, despite how many definitions, screens, or quant layers you add, so much of it relies on judgement, practice, and gut feel. Just like trying to hit a ball at speed. Hence the need for rambling articles and strange analogies to try and provide insight into what our brains are doing and how our methods work.  

Some people can make it look easy. It's not. Your ability to hit a 6 depends on a mixture of much you practice, how hard you work, and your natural skill. It also depends on countless factors outside your control. As with most things in life, you have to control what you can control, and mitigate against what you can't. We build our portfolio with individual and uncorrelated bets. Each black swan event is completely unpredictable. But we can predict that many will happen. Truly diversified positions provide the best opportunity and best protection from unpredictable future events.