Sunday, May 25, 2014

3 Investing Lessons from Real Madrid's Win In Champions League 2014

Real Madrid winner of Champions League 2014
If you have not already know, Real Madrid has just been crowned King Of Europe about 6 hours ago by winning the Champions League final (against Atletico Madrid) with a scoreline of 4-1 (after extra-time). 

I am not a fan of either team but still congratulate Real Madrid as it takes them until the 90th minute to hit the equalizer and bring the game into extra-time in the last few seconds. Of course, I will not dwell into too much details of the game as this is not a sports blog. What I want to share is what investing lessons I can gathered our of this game? 

Here are the five investing lessons that I've learned :

1. Defensive Is Never The Best Attack!
Personally I think Atletico Madrid lost the game because they turned too defensive after their goal (at 36th minute). It is like inviting equalizer and it is just a matter of time. Just like in investing, if we went too defensive (e.g. buy spreading the portfolio too thinly or too conservative in investing a real undervalued stock), the overall rate of returns might not be as promising as we targeted. In short, taking calculated risks is necessary in investing! 

2. Expensive Players Is Important
The club paid handsome money (many a time outrageously handsome) to the skillful and great players, Hence, I equate expensive players as blue chips stocks, they might be expensive but they do deliver the result at the right time (most of the time). In this morning's game, the blue chips (I means the expensive players) are Gareth Bale and Cristiano Ronaldo.  

Real Madrid winner of Champions League 2014

3. Never Say Die aka PATIENCE
In the game, it took Real Madrid 90 minutes (to be exact, at the third minute of the extra-time during the normal play time) to find the equalizer and managed to turn the table afterwords. Hence, patience is important. Just like in investing, patience is important (assuming that we have holding power) as it can turn a seemingly loosing game into a winning one.  

You might not be a soccer fan but I am pretty sure that we can learn something from anything that appeals to us!

Cheers!  

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