Play smart (The Financial Athlete #54)

If you play a sport too much without cross training, you risk muscular imbalances. A common muscular imbalance are strong quads combined with weak hamstrings. This particular imbalance causes knee injuries.

I see many with knee problems playing tennis with knee braces. This may prevent the knee problem from worsening but won’t contribute to healing. Oddly, I don’t see any of these tennis players troubled with knee injuries strengthening their hamstrings in the gym to counterbalance the strength of their quads.

Those who play too much of one sport know how to play hard. If they don’t correct muscular imbalances, they don’t know how to play smart. It’s more important to play smart than play hard. This principal applies to investing, too. Smart investing begins with an investment criteria geared toward sound risk management. A master investor is marked more so by his ability to manage risk rather than his returns of late. To be skilled at managing risk means to consistently exercise good judgment, not to avoid risk. There is no such thing as investing without risk, but you should invest when most of the risk is gone.

Old Chinese proverb: “The fish sees the bait, not th hook; a person sees the gain, not the danger.”


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