In early October of 2013, one of India’s go-to cricketer and last classic test match batsman – Rahul Dravid, played his last match in international cricket. As a classic test batsman with phenomenal technique, Dravid is one of the few batsmen who have been able to score over 10,000 runs. The aspect that drove Dravid’s performance and style was technical excellence coupled with his mental toughness and emotional restraint especially during troubled times.
There are many similarities between Dravid’s approach to cricket, and the approach taken by smart investors who build long term wealth.
#1: It pays to remain patient
During the 4th ODI of West Indies tour of India in the year 2002, Rahul Dravid chased down a high target of 325 set by West Indies by scoring an unbeaten century. A composed knock which included just 8 boundaries and no sixes and rarely a shot misplaced or a mishit which would have cost him his wicket.
Another element of Dravid’s skilful play was that of tiring out the opponent; several bowlers have remarked that Dravid frustrates the best of the bowlers by not doing anything entertaining and skilfully defending ball after ball after ball.
For investors, our opponents are largely volatility in the equity markets and time. Both of them put together are like a perfect mix of pace bowlers and spinners rarely giving loose balls in the beginning of the game. As the game progresses, we need to tire out their arms and let the heat of the pitch get to them. The only way to beat them is to use Dravid’s strategy of being patient and stomach the volatility over the longer term. With patience, Dravid was able to establish himself in the team as a 'must-have' in both formats of the game. Similarly, with patience, time becomes the friend of the investor and returns start kicking in.
#2: Be consistent
At the start of Dravid’s ODI career, his batting average did not cross single digits for quite a while. If the selectors had written him off from the shorter version of the game, India would have lost a world class middle order batsman.
Dravid took almost 10 matches to score his first half-century and 33 matches to score his first ever century. In fact Dravid has scored only 12 centuries in a career spanning over a decade in the ODIs but what mattered most was the consistency in which he scored his runs that saw him retire with a batting average of 39.16.
This teaches us investors the most important lesson in investing. Invest regularly no matter how small the amount. While a few bulk investments,like the 12 centuries of Dravid, will help you raise your numbers, it is the small, regular monthly investments that help you grow your money over the long term.
#3: When it comes to investments, think logical- not emotional
Throughout Dravid’s career, he has displayed immense emotional restraint and mental toughness which has aided him to bat well in tough situations.
Circa 2001, Calcutta. It is one thing to chase a total of 446 that the Aussies set and it is completely another thing to end up winning the match against the Aussies after being all-out for 171 in the first innings. Such was the adversity that VVS Laxman and Dravid faced on that day when the match would have been easily written off favouring the Australians after the first innings collapse. But it wasn’t over for Dravid and VVS; the resilience they displayed on the pitch for the next 2 days took us to a lead of 384 runs which was successfully defended with an excellent bowling performance by Harbhajan singh.
As investors we also see tough situations during which we would also need to display emotional restraint while keeping in mind the eventual goal of investing. For example, in between July and August 2013, we saw India’s benchmark equity index fall from just a shade over 6,000 points to nearly 5,400 points in one month.
While the fundamental story and growth outlook for India had not changed, much of the fall was on account of panic selling due to global factors. In the subsequent months the Nifty bounced back. If investors lacked emotional restraint during turbulent times, they would have participated in the panic selling and eventually lost out on the potential gains that could have been made.
#4: Future is unpredictable; but that’s OK
Back in 1996, when Dravid started his international playing career, no one, including Dravid himself, would have ever imagined that he would end up scoring more than 10,000 runs in both forms of Cricket. Thanks to his unbreakable resilience, patience and determination that Dravid not only passed the 5-digit mark in both Test and ODI cricket, he also gave us a lot of moments to cheer about as fans of Cricket.
Like Dravid, you would never know at the start of investing that how much you are going to make after a long spell of 7 years. But with patience and discipline by your side your investments might turn out into a hugely successful one like Dravid’s career.
*With Inputs from Sanjay Pranesh and Ambhareeson Udhayakumar.