Great Investing Lessons From 'The Science of Hitting'

Source: Gurufocus

It is well-known that Warren Buffett (Trades, Portfolio) compared investing with baseball, as he believes that investing success also relies on waiting for the right pitch to come. He has recommended Ted Williams' book, "The Science of Hitting," and after reading it, here are some of the most important takeaways that we can apply to investing:

Practice: "And then to practice, practice, practice. I said I hit until the blisters bled, and I did; it was something I forced myself to do to build up those hard, tough calluses. I doubt you'd see as many calluses today. Most players hit with those golf gloves, to begin with, but more important, they don't take as much batting practice, as much extra batting practice, and that's how you learn."

Investing is serious business. It is well-known that some investors such as Buffett read through entire compendiums of stock information and went through thousands of filings at a young age. Knowledge is cumulative, and it helps a great deal to build the correct mental framework. However, as many professionals would tell us, it is one thing to read about how to swim and another one to get in the pool and do the work. Practice helps us retain a greater deal of information and lessons. The more we practice and learn, the better we become at our activity.

Hit according to your style: "Hitting a baseball - I've said this a thousand times, too- is 50 percent from the neck up, and the more we talk about it the more you'll see why that is so. The other 50 percent is hitting according to your style."

We can't expect to outperform the market without taking the time to understand how it works and what makes it tick. Most importantly, we have to discover why WE are how we are and understand what makes US tick. Analyzing one's behavior can be a challenging feat, it requires honesty and fortitude to recognize our weak spots. But it is only by doing this that we can improve and avoid falling into the same mistakes over and over again. This is a never-ending task, but we can reach a point where we avoid silly mistakes that are generally the ones that wear us out.

The three rules to hit by: "There are three things I would emphasize to any hitter before even considering the rudiments of a good swing. These three things are more constant than the swing itself, and every bit as important: 1) To get a good ball to hit, 2) Proper thinking and 3) Be quick with the bat."

This is one of the best lessons in the book. To get a good ball to hit can be the equivalent of finding a great business to invest in. The second one has a lot to do with bulding the correct mental framework, something that Charlie Munger (Trades, Portfolio) would call the latticework of mental models that help us understand the main drivers of a company's success. The third one is also critical: When we find a great investment opportunity, we shouldn't be shy to swing away, which is investing a good amount of money with decision. This stems from the idea that while the market is efficient, it is not perfectly so, and we can seize those opportunities when we are able to recognize them.

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