Now that the World Cup and Wimbledon are over, we can start becoming obsessed with another major event in Europe this summer -- the Tour de France. For three weeks, nearly 200 freaks of nature (and I say that respectfully) will race their bicycles for more than 2,000 miles and cross two mountain ranges, at speeds at which those of us who regularly ride bikes can only regard with awe. If you don't believe me, get on a bike and power up to 25 miles an hour. Now stay there for 140 miles. Tomorrow, do it again. And again the next day. And again. Now ride up the Alps.
Even non-cycling fans probably know Lance Armstrong's story. After winning a near-death battle with cancer, the Texan went on to win the Tour de France, not once, but seven times -- in a row!
The secret of success
What made Lance so different from his competitors? Was it his genetic gifts, his training regimen, his teammates? All of the above? And how can this be in any way relevant to your stock portfolio?
Yes, Lance had a natural gift. His body doesn't produce lactic acid as readily as most of ours do, and that allows him to work longer and harder before the acid shuts his muscles down. He also has an amazing capacity to take in and process oxygen. But those advantages alone aren't the reason Lance broke every record associated with the Tour.
Lance won his races months before they started. He was the champion of homework. The course for the Tour is different each year, but by the time each year's race began, Lance had spent more hours training on the actual course routes than his competitors had. He knew every climb, every corner, every potential pitfall, months before he actually had to ride them in the race.
Likewise, when you pick stocks, your homework is more important than your natural gifts are. With the information available to you here on the Fool's message boards and in the links to research sites, you have the kind of information you need to manage the ordeals ahead. Climbing those mountains isn't nearly as intimidating when you've prepared.
There's no "I" in team
Lance also didn't win his seven Tours alone. Even though the champion wins as an individual, the Tour de France is in reality a team event. In fact, an individual isn't even allowed to enter without a full team. The team members protect their leader in the large field -- the peloton -- by keeping him out of danger when the mass of riders gets crazy. The team shelters the leaders from the wind, a strategy that can save those leaders 25% to 30% of the energy required to battle those breezes. And the team members pace the leaders in the crucial mountain stages, where the Tour is typically won or lost.
And then there's the rest of the team behind the scenes. Lance's Discovery Channel team made use of the best in technology research. The team used wind tunnels and advanced software packages to make sure that every element of each bike was set up to maximize the rider's position and performance. And the support staff, from the team manager to the team chef, all contributed to the team's efforts on the road. Without a good team, no one -- not even Lance -- wins the Tour.
The power of consistency
You have the same type of team here at the Fool, just waiting to help you with your research, your homework, and your race. From the community of investors to the stable of newsletters, you have the support team to get you to the finish line, whether you're in Paris or Peoria.
The Tour de France is made up of some 20 separate races, or stages. And even though Lance won the overall title seven consecutive times, he didn't win all of those individual stages. He doesn't have to win every day. What's required to wear the yellow jersey is consistency. As long as a rider stays with the main field on most days, and distances himself from the pack on the right days, he can win the overall race.
In investing, that's even more true. Investors love to talk about their big wins -- the stocks they bought at $15 a share and rode up to $100. (We somehow tend to be very quiet about the ones we bought at $100 and dumped at $15.) The big winner in the market is the equivalent of winning a stage in the Tour. It's a great victory, and it's to be celebrated, but it's just one stage. If the pack leaves you behind the other 20 days, your overall race wasn't very impressive, now, was it?
Consistency is the key. Picking more winning stocks than losing ones gets you to the line in good shape. You don't have to be right every time. You don't even have to win a single stage, as long as you do reasonably well most of the time. Peter Lynch talks about the 10-bagger that can make an investing career. He's right, of course, but not everyone makes that great investment. Even if that big score doesn't happen for you, you can still have a great investing career by doing your homework, relying on your teammates, and being consistent.
That yellow jersey looks good on you, Fool. Wear it proudly.
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Fool contributor Robert Sheard , author of The Unemotional Investor and Money for Life, is an avid cyclist and will be riding the 444-mile Natchez Trace Parkway this month. That's right. Mississippi. In July. He won't, however, be doing 25 mph unless he's being chased by a bear -- downhill.