Playing the Long Game

Based off of our earlier post on how fantasy football relates to the stock market, we are going to review Habits 5-7 and demonstrate how your skills in fantasy football can make you money in the stock market.  Habits 5-7 talk about how the best fantasy football drafters are adaptable and understand that the draft is just the first step. Fantasy football is a weekly game. It’s not a yearly game, or lifelong game.  Fantasy football is a weekly game that happens to take place over the course of an NFL season.  And while that seems different than your 401K or your retirement fund, the truth is that investing in the stock market is just like performing many fantasy football seasons, one stacked right after the other.  We are playing the long game.  It’s just made up of many seasons.

Habit 5 is “They understand it’s a weekly game.”

Ultimately, “season-long” fantasy football is a string of 13 (and hopefully more) one-week contests. Analysts, writers and pundits all talk about how many touchdown passes or fantasy points or yards or targets or whatever someone had last season and how many are projected this season, but the truth is, there aren’t a lot of players who need to be in your lineup every single week. So here’s a very simple way to go about that. We’ve talked about how you need to have an opinion on every player. You don’t need to have stats or projections memorized, but just a general sense of how much you like that guy in comparison with other players. Even if it’s just someone’s rankings that you trust, some way to differentiate between players as the clock ticks down on your pick, right? It also doesn’t really sound like we are playing the long game, does it?

With stock market equities and ETFs, it can be slightly different where there are certain companies or indexes we want to hold forever.  The truth is that everything that goes up has periods where it also goes down.  So, although people like to think they are lifelong stocks to hold onto forever, if we are looking more to make profit, minimize risk, and take advantage of opportunities, we can also do that without entering a lifelong commitment with a specific company.

Habit 6 is “They are flexible and trust themselves above all others.”

Try not to enter any draft with a set strategy. You never know where you might find unexpected value, so being flexible enough to adapt on the fly is essential. Don’t let the draft room dictate your behavior, but consider it a factor in shaping your approach.  “Everyone has a plan until they get punched in the mouth.” No, Mike Tyson wasn’t talking about fantasy football, but the sentiment here is accurate.  So I’m a big believer, especially as you get further into the draft, that you should just get your guys. Don’t sweat rankings or what some people think are good values (or bad). None of that matters, and it will all change. I want you to win, I really do. But not as bad as you do. No one will know your league, your rules, your tendencies better than you.

Above all else, trust yourself.

The same is true in the stock market.  Build your skills and knowledge to the point where you have an opinion on the situation in front of you.  Find people you trust and listen to provide additional points of view but in the end, the true key to financial freedom is being able to make the decision yourself.

Habit 7 is “They understand that the draft is just the first step to success.”

You don’t have to win the league during your draft. In fact, it’s very unlikely that you will. If your fantasy football season is a house — and at this point in the article why wouldn’t it be? — the draft is merely the foundation. You’re just trying to acquire the building blocks of your team. If there’s a run on quarterbacks, instead of forcing it and taking a lower-tier guy, grab another running back. Give yourself some surplus so you have something to trade. Trust me, another lower-tier QB will still be there next round.

In the stock market, you don’t have to win the trade immediately when you make it.  The simple truth is that by building your skills, you actually can make any situation into a winning one.  Learning to manage the trade can often be just as important as spotting the opportunity. There have been numerous trades we have made where it looked like we made a mistake in the beginning but wound up turning into a huge win.  That is what we mean in playing the long game.  Now, are you ready to get started?  Click here.

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