Fribble The Sport of Investing

By Selena Maranjian (TMF Selena)
September 12, 2000

[In honor of the approaching Olympics, here is a classic Fribble that first ran on February 27, 1998.]

The Winter Olympics have come and gone. Those of us who watched as much of it as we could, despite the supremely annoying TV coverage, are now left trying to remember what we used to do on weekday evenings.

Ah -- I remember! I used to sit around and think up Fribbles. So what could be more timely than a Fribble on the Winter Olympics? Surely there are some investing truths we can draw from this two-week extravaganza of up-close-and-personal profiles -- er, I mean, sports. Here some initial thoughts.

-- Hermann Maier, part I. Remember him? He's the Austrian skier who gave CBS the great gift they had hoped for -- a breathtaking wipeout, suitable for endless replays. Imagine him as an investor for a second. Why did he wipe out? It seems that officials had slightly changed the course, so no skier was prepared for it, not having trained on it. The run of the market takes similarly unexpected turns. We don't know exactly what's ahead of us in the short-term, nor do we know how to deal with it in the manner that will bring us optimum results. If we want the gold medal, we have to ski aggressively and hope for the best.

Investors with the same mindset also take chances, hoping for the best. If we just want to successfully complete the run, we might ski or invest less aggressively and be more patient.

-- Hermann Maier, part II. Remarkably, Hermann's fall, in which we saw him spin in the air before being tossed back to earth virtually on his head, did not mark the end of his 1998 Olympic experience, his career, or his life. He came back in later contests to win two gold medals. This reminds us that although our portfolio can take a terrible beating on occasion, we can still come back and succeed. If your stocks careened southward in late 1987 and you didn't panic and sell them, you were probably back in the black within a few weeks, months or a year. Even if your portfolio was mired in the stagnant market of the 1970s, if you held on Foolishly for the long-term, you probably fared well. Eventually.

-- U.S. Hockey: The Men and the Women. Could any Olympic set-up be more Foolish than this? Picture it -- Nagano, 1998. Onto the ice skate the Wise professionals. The American and Canadian men's teams, chock full of National Hockey League stars, are expected to have little trouble reaching the gold medal game. Whoops. Can you say underperformance?

Meanwhile, the non-professional women's teams played cleaner and more impressively than many of their professional counterparts. Their teams exhibited actual teamwork -- groups of individuals effectively working together for a common purpose, without much hype surrounding any single superstars. This is quite Foolish, and not unlike what you'll find in
the best of our message boards.

-- The Olympic Village. How many places on earth will you find Princes living alongside fellow athletes of much more modest origins? The village and the Olympics in general are notable for the way they permit all kinds of athletes to compete against each other rather equally. Not entirely equally, mind you -- some have had far superior training and coaching and some have the latest equipment, while others are just happy to be there, no matter how they got there. This is akin to the field of investing, which has become a lot more level lately. In the market, Gladys Frumwalt from Decatur, Georgia can go head-to-head with big-name investors and money managers. She can buy and sell the same stocks and outperform mutual funds left and right. Heck, if she's really good, she might outperform Warren Buffett and end up featured on a box of Wheaties.