Six things that investors can learn from Sachin Tendulkar
The stock market is all about human psychology. It’s the right mindset, it’s the habit that you form over a period of time to become a successful investor. To be on top of your game for a very long time in any profession requires a certain level of grit, focus, persistence, discipline, and determination. The stock market is no different.
Here we bring one such very famous, very successful, and very inspiring individual in the field of cricket – Sachin Tendulkar. We want to attempt and draw parallels to the world of the stock market from his journey.
Here are a few important learnings and messages coming out of his cricketing career and how we can use them to our advantage in our investing journey.
1. Stay in the game for the long term
Sachin Tendulkar, often known as the ‘God of Cricket’ has been part of the sport at the highest level for more than 24 years. He is also the only cricketer in the world to play six cricket world cups. He lost the first five world cups, and he played. Not to forget, he was the man of the series in the world cup 2003, but still, India lost the finals to Australia. It may happen that you do everything right – the right analysis, in-depth study, etc., and still the stock market surprises you. It is okay. Stay in the game. You must know that he has only won one world cup, that too his last world cup in 2011.
Important learning is that you should stay in the game. There may be many ups and many downs in your investment journey when your investments may not reward you the way you would expect, but stay invested in the right stocks, do your regular research, review your portfolio, believe in the long-term philosophy, and trust your wealth management advisor.
2. Discipline brings consistency
How can we forget the ‘Dessert Storm’ in the Nineties? Sachin was merely in his early twenties and had witnessed success very early in his career. However, the grit and determination to do better allowed him to continue his extensive practice sessions. Sachin had a very strict work ethic irrespective of the outcome of his actual performance in the match. You need to remember that only discipline will bring consistent performance. An important learning for you, as an investor, is to be very consistent in your investment journey.
Products like money management and systematic wealth management allow you to invest regularly and consistently and get rewarded in the long term along with the benefits of compounded returns. Irrespective of the broader market outlook and macroeconomic factors, if you stick with your long-term financial goal plan and work regularly towards the same, you will reap the rewards eventually.
3. Diversification
Sachin Tendulkar was not just a cricket, but also a very smart businessman. While he was playing cricket, he was gaining popularity. He got into endorsements and advertisements and started building businesses like owning restaurants, playing IPL, etc. He was diversifying and leveraging his name to create alternate income streams.
As an investor, diversification becomes very important. If you are focused on one stock or one sector, the risk is very high. Diversification helps you reduce the overall portfolio risk. As a guiding principle, an ideal portfolio should not have an allocation of more than 5 percent in more than single stock and not more than 15 percent in one single sector.
4. Have a focused approach and strategy
In his 24 years career, Sachin Tendulkar had faced different generations of cricketers. He had to face a lot of different conditions - different bowlers, different strategies against him, different pitches, etc. Be it his strategy to sweep on the leg side to the legendary spinner Shane Warne or be it his strategy to avoid playing even a single cover drive in Australia and scoring a total of 241 runs?
You should create your niche and focus on your strategy and trust the process. Having the right strategy using investment advisory services for example will allow you to sail through the market shockwaves.
5. Setbacks are part of life
You would not believe that someone like Sachin Tendulkar ever had a bad day at work. But, forget a bad day, there was an entire patch in his career in the early 2000s where he suffered a ‘Tennis Elbow’. Being out of action for a while and making a comeback was difficult for him. He had an array of poor performances. His injury was so bad that many of us thought it was an end to his career.
When times are tough, people become tougher. That’s what Sachin did. He practiced and practiced hard to make a comeback. He scored 100 centuries in international cricket and also became the first player to score a double century in ODIs. He broke many such records after his comeback.
Similarly, in the investing world, there are global crises, national emergencies, and other external shocks. For example, the Harshad Mehta scam in 1992, the IT bubble burst in the early 2000s, the financial crisis in 2008, Demonetization in 2016, the Covid-19 outbreak in 2020, the Russia-Ukraine war of 2022, etc. are all such shocks that will affect your portfolio significantly.
Shocks are temporary, recovery is a certainty and discipline is a winner.
Always remember that “Every setback is a setup for a great comeback”
6. Avoid the outside noise
The stock market and cricket are the two most talked about things in India. Almost everyone in India is a cricket legend and guru when it comes to giving opinions. It takes hardly a few days for someone to become a god and even lesser time to be asked to retire from the profession. People criticized Sachin does not do well, all throughout his career. He did not shy away to give a strong reply to everyone, not by speaking with them but by focusing internally and improving his batting.
Similarly, even in the stock market world, there are people who believe that the stock market is going to crash tomorrow and there are people who think that the nifty will reach 20,000 in the next month. There are extremists everywhere, but you should focus on your analysis and research and continue a disciplined approach to investing.