What is the relationship between the stock market and equestrian sports? What can we learn from the latter?
By Amr Hussein Elalfy, MBA, CFA
6/27/19 11:02 PM
I have never been either interested in or a follower of equestrian sports, even though Islam calls for teaching our children swimming, shooting, and horse riding. But after my daughter joined the equestrian team about five years ago, she became quite familiar with the rules of some of these fine sports, such as showjumping and dressage. But what attracted my attention as a stock market specialist was the similarity between equestrian sports and the stock market.
In the past, people likened kindness to "knights' morals". But I did not realize the meaning of this statement until after I had touched those morals directly. Equestrian sports teach discipline, which includes many aspects ranging from respect for the coach and other riders to training and wearing uniform at tournaments all the way to perseverance and self-realization. Also, equestrian sports teach how to adapt to the status quo and to always be prepared for any change that may occur to reach the ultimate goal: winning. Successful riders are those who use their experience in dealing with horses in all cases, calm or disturbed.
In the stock market, discipline is one of the important—if not the most important—qualities that investors or traders must have, including the adoption of a certain investment policy and not to be confused by any psychological factors that may affect the investment decision. Also, the successful investor or trader is the one who makes decisions according to the current market situation with a willingness to change these decisions quickly to deal with any developments, be it economic data or financial results of a particular company to achieve the goal of profit or at least the preservation of capital.
As I watched my daughter perform equestrian sports, I began to draw comparisons between them (which to my surprise are part of the Olympic Games) and the stock market in particular and investment in general. Thus, it was not strange to find many stock market experts interested in these sports as well! There are those who ride horses for leisure and those who compete, and there are those who encourage their children to ride horses. If we think deeply for a little bit, we realize that the most important similarities between the two are: the spirit of challenge and readiness to overcome obstacles and obstacles and to deal with all the circumstances and any possible changes.
In my opinion, financial markets are like the racetrack where investors meet to achieve the biggest win: to achieve a positive risk-adjusted return by being disciplined to stated investment policy and selecting the winning horse (stocks be it or any other asset class) to achieve that goal. Therefore, I advise investors to adopt knights’ morals in general and especially when investing. Sooner or later they will achieve their desired goals.