When I was a schoolkid, I enjoyed playing all kinds of sports. I was doing okay in football but the one sport I wish I could do really well was Taekwondo. I used to train for local sparring competitions but today, I had nothing much to showcase for my hours per week of training and preparation.
But, the combating experiences I obtained had shaped me as an investor today. I would say how I invest is similar to being in a Taekwondo bout and by the way, if you are involved in other fight sports such as Muay Thai, boxing, MMA, Sanda and Kumite, I believe these experiences are highly relatable to investing.
Hence, in this write-up, I’ll share how Taekwondo is relatable to stock investing. Of which, you’ll learn what dividend and growth investing are all about and you can decide which of the two investment styles are suitable to your objectives.
#1: How Points are Scored in Taekwondo and in Stock Investing?
First, to win a game, be it in Taekwondo or investing, we must know how scores are obtained and accumulated. Thus, in Taekwondo matches, an exponent shall be granted:
1 point for a valid punch to the trunk.
2 points for a valid kick to the trunk.
3 points for a valid kick to the head.
4 points for a valid spinning kick to the head.
In stock investing, dividends are likened to obtaining 1 or 2 points from a punch or a kick validly delivered to the opponent’s trunk. Meanwhile, capital growth is often viewed as the big money to investors, similar to getting 3 or 4 points for a kick or a spinning kick delivered beautifully to the opponent’s head.
#2: What Are Your Weapons to Score Points?
Obviously speaking, you need to know how to throw a punch in order to have 1 point in a Taekwondo bout. If you wish to score 2 points, you need to learn how to deliver kicks, which include front kick, a roundhouse, a back kick, and a list of their variations, effectively to the opponent’s trunk.
Usually, a newbie in Taekwondo would learn to deliver a front kick, roundhouse and a back kick in the beginner’s class as these kicks are basics.
Of course, once you mastered the basics, you can move onto mastering the fine art of delivering an axe kick, a spinning kick, and the rotational kicks such as the 360s, 540s and the 720s. These kicks would enable you to score 3 or 4 points in a Taekwondo bout.
It is the same with stock investing.
If you are a newbie, you’ll start with the basics where you would pick up the art of reading financial statements and the basics of stock valuation. This will allow you to effectively earn dividends from your stock investments. It is like getting 1 or 2 points from each kick attempt made to your opponent.
Over time, you can choose to pick up a higher level of accounting and as well as stock valuation skills which are much needed to succeed in growth investing. Its set of skills enable a savvier investor to look beyond the financial reports and in their own independent judgement, invest in stocks that could be multi-baggers. This is like getting 3 or 4 points from a kick to the opponent’s head.
Thus, if one says that he invests for capital growth but yet doesn’t know how to interpret financial statements, he is a fool. It is like saying he wants to get 3 or 4 points in a Taekwondo bout but yet doesn’t know how to deliver a basic kick. In Taekwondo bouts, experienced exponents love to face such opponents, as they know these bouts are already won even before the start of these matches.
#3: How Most Taekwondo Matches Are Really Won?
Is it by always going for the speculator 3 or 4 points with kicks to the head?
Or, is it by a consistent accumulation of 1 or 2 points strikes to the trunk?
From my observation, it is the latter. Consistency is better than spectacular. And this is even true for the most experienced exponents in many high profile bouts such as the recent Olympic Games and the World Taekwondo Championships.
These highly skilled exponents could mix it up where 70%-80% of their kicks are aimed to score 1-2 points and 20%-30% of their kicks are aimed for the head. In the context of stock investing, it is a type of portfolio diversification which has a list of dividend stocks as his main portfolio and a list of growth stocks which can add to the icing on his cake.
But, do note that the above is meant for highly skilled exponents.
If you are new, it is ideal to learn the basics before going for the spectacular.
Why is that so? As such, this leads us to the next question:
#4: If I Can Do the Spinning Kick, Why Not Aim for 4 Points All of the Time?
Why do highly skilled exponents spend more time on getting the 1 or 2 points?
The answer is simple. It all lies with ‘calculated risks’.
You see, it takes more time and effort in delivering spinning kicks to the head as compared to landing a punch or a simple roundhouse kick to the trunk. Also, as an exponent attempts a spinning kick, his body would likely be off-balanced. He would be at risk of falling to the mat which could lead to a 1-point deduction or worse, be at risk of a series of counter attacks from his opponent if he fails.
Yup, a spinning kick is likened to a move that is ‘High Risk, High Returns’.
So, a savvy exponent must know when to deploy this kick to boost his chance in scoring 4 points without being viciously countered by his opponent. Hence, this requires a higher level of Taekwondo education and experiences.
Meanwhile, most exponents can score points easily with a punch or a basic kick to the trunk. Yes, it is nothing fancy but they put numbers on your scoreboard. I realised that this is the case for they require less time to deliver and in practise, most exponents can swiftly clinch or evade a potential counter attack after they have thrown a punch or a basic kick to their opponents.
Yup, a punch and a basic kick is likened to a ‘Low Risk, Low Returns’ move.
Conclusion: What to Aim For in Your Next Taekwondo Bout?
I believe it would be practical to assess your skill sets as an investor.
If you can throw a punch and basic kicks, you could build a strategy on them for your next Taekwondo bout. It would be less practical to use advanced kicks, like the spinning kicks and the 360s and 540s, to win points spectacularly. Here, it is important to note that your task is to win and survive the next bout and not act like the next Bruce Lee or Jackie Chan.
However, if you are efficient in scoring points from punches and basic kicks, you may continue or you can add onto your arsenal of weapons so that in due time, you can enhance your scores in a Taekwondo match with advanced techniques.
Alright, that is it for this week.
Perhaps, you could share what is your favourite sport and how it shaped you in your journey as an investor below:
