The Secret to Inevitable Success

The Secret to Inevitable Success

September 13, 2017

“You don’t need to have extraordinary effort to achieve extraordinary results. You just need to do the ordinary, everyday things exceptionally well.”

— Warren Buffett

 

Early in my coaching career, I devoured anything I could about great coaches.

I read it all, but one quote affected me more than the others.

A wildly successful high school football coach was asked how he explained his extraordinary success. He said, “We never get tired of running the same play over and over again.”

At first, that seemed dimwitted and boring. What kind of coach keeps repeating the same play? Won’t they figure it out? Shouldn’t he switch it up? Won’t the fans think he’s stupid?

After a while I realized the answers were: A great one, doesn’t matter, absolutely not, andwho the heck cares?

This coach does something effective, and he does it in a way that no one else would.

He runs the same play over and over.

There’s nothing extraordinary about running one successful play. Extraordinary is a play-calling sheet that’s bigger than a Cheesecake Factory menu. Extraordinary is a staff of eleven coaches working for sixteen hours a day. Extraordinary is not one simple thing.

Because if we only do one simple thing, what happens when it fails? If it fails, it’s obviously become useless, so it’s time to move on to something else.

And when that new thing fails, we move on to the next thing. And when that thing loses, we move on again.

Nobody sticks to something that loses–especially something that’s boring.

But that’s the trick: doing something ordinary and sticking to it.

I recently came across in interview with Michael Adam. He was one of the creators of the legendary AHL fund. That little hedge fund he created now manages over $78 billion.

In the middle of that extraordinary growth, Adam decided to strike out on his own. Currently his new fund, Aspect Capital, manages $6.6 billion of assets.

During the interview, Adam said something that sounded eerily like our successful football coach.

When asked why his systematic strategies are so successful, Adam said, “Our strategies actually work because they’re so hard to hold.”

Adam deals primarily with deep value and trend-following strategies. Those methodologies are indeed hard to hold.

Who wants to hold a stock that drops 25% after it’s already dropped 30%? No one. Who wants to keep trying to follow the trend when they’re stopped out ten times in a row and haven’t had a winning trade for eight months? No one.

And, of course, that’s why he’s so confident in his success.

No one is desperately trying to reverse-engineer his positions. No one is trying to hack into his database to find out what markets he trades. Even if they did (and they should!), no one would stay around during the losing streaks.

By dealing in boring, ordinary strategies, his trading remains bulletproof and enduring. His methods will always work because their boring nature keeps any potential meddlers far, far away.

He runs ordinary, common sense strategies in an extraordinary way.

Do we have any example of this?

Yes, and we talked about it recently in a webinar.

Trading back to Weekly Pivots is ordinary. Nothing exciting about that.

And when a trend gets strong, anyone trading this way would watch a trade stop out quickly and feel stupid for taking a trade back to fair value during a savagely trending market.

But if we didn’t get bored trading this boring system and didn’t bail during the losing (which happens regularly), we would be up over 10% in 2017, which is almost identical to the top Index Funds.

That’s trading conservatively, though.

I just got an email last week from a member trading this system and he says his account is up 12% since April. He said a family member trading the same thing is up 22% during the same time. And he said another family member is up 55%!

Why the discrepancy? They’re all trading different trade sizes and, obviously, the big return is a result of taking on more risk.

Even though the Weekly Pivot system is ordinary, it’s possible to get extraordinary results, and that’s what Buffett, the coach and Michael Adam are trying to teach us.

To win, all we have to do is take ordinary, undesirable strategies and never get tired of doing the same thing.

Then, success becomes inevitable.