Tom Brady, Howard Marks and Risk Taking

Tom Brady turns 45 today — but instead of blowing out candles on a birthday cake, he'll be hard at work practicing football for the Tampa Bay Buccaneers.

Brady has defied all the odds, playing a highly competitive sport at an age when most are long retired, and is now deep into a second career. Amazingly, he has maintained his athletic skills and talent, ignoring the accumulation of candles on the cake. He is a living testament to the H.G. Wells quote, “I want to go ahead of Father Time with a scythe of my own.” Brady has been chopping down everything in his path for years.

Brady’s training methods have gone against conventional wisdom, proving that the trouble with being normal is you cannot improve; you only get worse.

As legendary investor Howard Marks wrote in his 2006 email Dare to be Great: “If your behavior and that of your managers is conventional, then you will get conventional results — good or bad. If your performance is unconventional, you will likely get unconventional results.”

Marks believes that the “road to above-average performance runs through unconventional, uncomfortable investing,” which means looking at non-consensus ideas, something most investors fail to do. But this is where the true opportunities for growth lie, according to Marks. Along the lines of uncomfortable investing, Marks notes most “great investments begin in discomfort.”

What Brady and Marks have done to be successful, thus sustaining unparalleled excellence in their respected fields, is to be different, to be willing to go against the norms of their peers, and to take risks with a fresher, unique approach. Both men know there isn’t a magic formula for their success.

According to Marks, the way to generate superior investment results doesn’t lie in formulas or loss aversion but rather from “a better-than-average ability to figure out when risk-taking will lead to gain and when it will end in loss.” Properly gauging when a risk will lead to gains or losses allows for superior investment results.

What keeps many of us from taking a new approach is that we don’t see instant results. The short-term pain affects our long-term strategy. One of Marks’s favorite quotes is: “Being too far ahead of your time is indistinguishable from being wrong.” For investors, even if they are right on investment, they may not see their gains for a while and will have to deal with looking wrong and live with the fear of being wrong.

The fundamental question we all must answer when we seek to change and be different to gain sustainability is: Can we handle the fear of looking wrong even when right?

Brady can, as could Marks. Can you?