What the game of football ("soccer") taught me about "luck"

Another post of mine evolved into a discussion about luck in investing, so I thought it was worth splitting out to a new discussion.

Now let me preface this with the fact that I know nothing about football, but just as a casual observer, I managed to learn some pretty important life lessons from it.

In football, unlike basketball or AFL or many other sports, it's a very low scoring game. It's not uncommon to have 1-0 scores, and penalty shootouts are relatively common. Because of this low scoring nature, it can be difficult to distinguish between the role of luck and skill.

As a casual observer, I always used to wonder...where is the skill here? So often I have seen a crap team put up against a team considered the best in the world, and it's absolutely not uncommon to see a 1-0 score. Shouldn't they have dominated? Why aren't 10-0 scores more common? And most of the goals seem to be flukes too - a lucky kick, a goal keeper taking his eye off the mark for just a split second. So when they do win, it often seems to be up to luck. Hell, I've seen some pretty big upsets too, because again, it's not difficult to pull off in such a low scoring game. You only need that one bit of luck and you've defeated the best in the world. It's not like basketball where a good team can unequivocally win with a lead of 50 points - you just don't see that as often in football.

BUT - and getting to my point - it's not all down to that one game. It's never just the one game. Take a step back and look at the bigger picture. It's about consistency over ALL their games. Yes that world leading team may have lost out due to that one lucky kick, but they've also won 9 out of 10 of their other games...even if all their wins were also 1-0. What appeared to be a game of randomness turns into something very consistent if you look at the big picture.

Likewise, you can say an investor got lucky with one house. Right place, right time. Take a step back and you see they've managed to reproduce this "luck" half a dozen times in a row now. Is it luck anymore? No. The same works in the opposite direction - to be "unlucky". You have people who claim that they've simply been unlucky in their investing careers. Fine, we've all been there. It would be a bold investor to claim that luck didn't play at least one pivotal role in their investment journey, or that they've never screwed up - god knows I have. But when you've screwed up 10 times in a row, I no longer call you unlucky. Just like a world dominating soccer team can lose one game, but you'd hardly call them bad if they've won the preceding nine games.

My point is, in isolated cases, the presence of luck is REAL, and to dismiss it would be at your detriment as an investor. But when it comes to having consistently good or bad luck, it's no longer luck...it's no longer "real" luck, and it's a term only used in delusion.

 

In the long run a skill advantage or an edge will show itself, but over the course of one football game anything can happen, which is part of the attraction of soccer and sport

I would prefer the A-League just have a premiers plate and not the grand final game where there is too much randomness involved.

 

Yup exactly my point, and the same analogy can be applied to investing.

 

Ah, football. The fakery where some teams pretend to be injured.... Yep, analogous to investing. Or not.

Isn’t investing more like knitting?

 

Best you read posts before replying to them.

 

I did read it all the way through. My comment stands.

My point is that I think the analogy is fallacious. Any comparison between football and investing is arbitrary. It would be just as valid to compare it to a craft.

Though I really appreciate the evocative way you write!