THINKING PROCESS VERSUS OUTCOME
Lot of Indian cricket fans remember the Hero Cup match between India and South Africa on November 24, 1993 at Eden Gardens in Kolkata. South Africa needed 6 six runs off the last over to win the match. There was an intense discussion between the players and the captain about who should bowl the last over.
All the regular bowlers Kapil Dev, Srinath, Prabhakar and Ankola, had some overs left to bowl. After consultations, the Captain decided to hand over the ball to the 21-year-old Sachin Tendulkar. Sachin was a star batsman, but the whole Eden Gardens was shocked as he came out to bowl the last over. That overturned out to be magical! Sachin got a run out and restricted the batsmen to only 3 runs resulting in India’s victory by 2 runs.
Let’s imagine what if… South Africa had scored quickly and won the game easily. What would be the reaction of the crowd, the media and the experts? Would anyone have spared the captain of severe criticism for such a bold decision that went wrong? Even the captain give any justification, would people care to listen to or believe the justification?
We tend to focus on the outcome to judge whether the decision was right or wrong. However, the decision-making process becomes more important. In the context of equity investing, stock market is always volatile and uncertain but investors only chase the certain outcome and in that process is forgotten.
INVESTORS DON’T NEED TO GET IT RIGHT ALL THE TIME.
No one can get it right all the time. Investment decision-making is about considering the payoffs and their probabilities. The right investment process will provide the right combination of both the factors in a way that brings higher upside when you are right and lower downside when you go wrong.
Following Process >>>> Chasing certain outcome
Nishit Siddharth Shah