Malcolm Jenkins & Investor Instincts
by: Brendan MageeI know I am a week late on this, but today I would rather write about the aftermath of the Eagle's game vs Dallas as opposed to yesterday's vs the Dolphins. Last week, as weary as we were from a late night game, we were all thrilled that the Eagles pulled out a win in overtime and, finally, seemed to have put the season on the right track. Today, boy do we all know different.
One of the subplots coming out of Dallas was that safety Malcolm Jenkins played a the majority of the game with a concussion. Eagle's fans applaud Jenkins for his toughness and doing what it took to win the game. Just about everyone else, with all that has been discovered about the dangers of concussions, say Jenkins was crazy for risking his health and well being by not telling the medical staff what he was dealing with.
No one doubts the toughness of professional football players. They kill themselves week after week, but they also play with the fear that today's game could be their last. They could get hurt or someone better can come along and take their jobs. In a moment, there goes the contract and financial security. To last in that game, you have to have a real knack for survival, and sometimes that instinct works against the player. Be it a football player or an everyday human being, we all have instincts. We were born with them and they operate without our permission. Pain, pleasure, survival are amongst the strongest instincts we have.
Touch a hot stove, pain makes sure you never do that again. Pleasure makes certain that this weekend's cheese steak will not be your last. The thought of coming out of a game, letting the medical staff know you have a concussion, being forced to leave the game, perhaps needing to sit out the next few week's worth of games and maybe seeing your back up take your job is pretty painful. Under normal circumstances, and if it happened to be happening to someone else, your instincts would be telling you to get to a doctor.
The choices aren't so clear when your livelihood might be hanging in the balance. This is why as much as possible the National Football League is taking the decision as to whether or not a player stays in the game after sustaining a blow to the head out of the players and coaches hands.
When it comes to the long-term health of the players it doesn't bode well to rely on the instincts of the player. They have been conditioned to get on the field and play no matter how painful the injury might be. Instincts might be considered a player's worst enemy. The same can be said for investors.
No matter the investment advertisement or commentary have you ever heard a word about watching out for your own instincts? Have you ever heard Jim Cramer say that as far as your instincts are concerned, you have little to no shot at policing your instincts and emotions? Have you ever heard any investment analyst talk about how they can use your instincts to work against your best interests? The answer to all these questions is a big fat "No." As a result investors have very little appreciation for the role and the impact their instincts have on their investment decisions and behavior. They cannot even start to be accountable for them.
You wake up to headlines screaming that China's stock market is in a free fall. You have money invested overseas. "Holy ####! Pain! I got to call my broker and sell everything I have in international stocks." Cramer comes on and plays up the latest can't miss stock. "My portfolio is in the tank. If this keeps up I'm sunk." Pain! "Let's go all in on company XYZ." Scenarios occur like this everyday and are too numerous to count.
Just like Jenkins knows a concussion isn't anything to play with and needs proper medical attention, investors know they should not sell low/ buy high. They know diversification is the cornerstone for prudent investing. However, instincts in the blink of an eye can over power prudent behavior and put you on a crash course for disaster. The same guy who said one more beer or slice of pizza won't kill you is the same guy dealing with congestive heart failure. "Damn didn't that pizza taste good!"
I've heard the more you resist the more things persist. Perhaps, the solution for football players and investors is to admit how overpowering their instincts and emotions truly are. Perhaps even more so, they need to admit they are powerless in dealing with their instincts. Hence, they need help. As far as their football careers and financial security are concerned, both investors and players would be better served if they put the task of policing their instincts in the hands of someone they trust.
Brendan Magee is the founder and president of Inevitable Wealth Coaching. With questions and comments e-mail brendan@coachgee.com or call 610-446-4322.
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