By Master Class Invest

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bySee page for author [Public domain], via Wikimedia Commons

"Everybody knows how to hit - but very few really do" Ted Williams

Warren Buffett has long recognised the importance of exercising patience and sticking within your circle of competence when investing. Buffett regularly uses the analogy of the baseball player who only strikes the ball when it's in his or her sweet-spot.   Unlike baseball there are no called strikes in investing.  An investor can wait for the day a good pitch comes along.

Buffett often refers to the Hall-of-Fame slugger Ted Williams who played for the Boston Red Sox and is arguably the greatest batter of all time.

Ted Williams approached batting in a methodical way, he worked out his optimal strike zone where the odds were in his favour and he maintained the discipline to only swing if the ball was in that zone.  By the time Ted Williams retired he had a .344 batting average, 521 home runs, and a 0.482 on-base percentage, the highest of all time.

Buffett referred to Ted Williams in his 1997 letter .... "We try to exert a Ted Williams kind of discipline. In his book The Science of Hitting, Ted explains that he carved the strike zone into 77 cells, each the size of a baseball. Swinging only at balls in his "best" cell, he knew, would allow him to bat .400; reaching for balls in his "worst" spot, the low outside corner of the strike zone, would reduce him to .230. In other words, waiting for the fat pitch would mean a trip to the Hall of Fame; swinging indiscriminately would mean a ticket to the minors.

If they are in the strike zone at all, the business "pitches" we now see are just catching the lower outside corner. If we swing, we will be locked into low returns. But if we let all of today's balls go by, there can be no assurance that the next ones we see will be more to our liking. Perhaps the attractive prices of the past were the aberrations, not the full prices of today. Unlike Ted, we can't be called out if we resist three pitches that are barely in the strike zone; nevertheless, just standing there, day after day, with my bat on my shoulder is not my idea of fun."

In the recent HBO Documentary 'Becoming Warren Buffett', Buffett notes ..

"The trick in investing is just to sit there and watch pitch after pitch go by and wait for the one right in your sweet spot, and if people are yelling, 'Swing, you bum!' ignore them."

Having recently read "The Science of Hitting" I was fascinated by the common threads between a baseball great and the world's Investment Masters.   Below I've collated quotes from the book with the Investment Masters Class Tutorials.

Ted Williams noted "Everybody knows how to hit—but very few really do."  I think the same can be said for investing.

The Profit is in the Buying

"Hitting is the most important part of the game, it is where the big money is."  

Thinking is Key

"Something you must always take up there with you: proper thinking"

Patience is Critical to Successful Investing

"The longer a batter can wait on pitch, the less chance there is that he will be fooled"

Stick within your Circle of Competence

"You can see in the strike zone picture what I considered my happy areas, where I consistently hit the ball hard for high averages, and the areas graded down to those spots I learned to lay off, especially that low pitch on the outside 3½ inches of the plate. Ty Cobb once said, “Ted Williams sees more of the ball than any man alive—but he demands a perfect pitch. He takes too many bases on balls.”

"I gave the pitcher the outer 2 or 3 inches of the plate on pitches over the low-outside corner"

Continue to Learn

"Hitting is self-education—thinking it out, learning the situations, knowing your opponent, and most important, knowing yourself."

Work Hard

"Practice, practice, practice. I said I hit until the blisters bled, and I did, it was something I forced myself to do to build up those hard, tough calluses."

Its not an Exact Science

"If there is such a thing as a science in sport, hitting a baseball is it. As with any science, there are fundamentals, certain tenets of hitting every good batter or batting coach could tell you. But it is not an exact science."

Control your Emotions

"Hitting a baseball—I’ve said this a thousand times, too—is 50 per cent from the neck up"

Understand Psychology

"Most hitting faults came from a lack of knowledge, uncertainty and fear—and that boils down to knowing yourself. You, the hitter, are the greatest variable in this game, because to know yourself takes dedication."

Find your Edge

"Now, you can sit on the bench, pick your nose, scratch your bottom, and it all goes by, and you’re the loser. The observant guy will get the edge. He’ll take advantage of every opening."

Stick with your Own Style

"Now, there are all kinds of hitting styles. The style must fit the player, not the other way around. It is not a Williams or a DiMaggio or a Ruth method. It is a matter of applying certain truths of hitting to a player’s natural makeup."

Be a Generalist

"They had an article in one of the magazines one year, quoting pitchers on how they pitched to Mantle and me.  Billy Pierce said he hoped for “minimum damage” and that he varied his pitches as much as possible—sliders, fast balls, slow-breaking stuff and prayers... What they all were saying was that there was no accurate “book” on me, and that’s what a batter strives for"

Love what you do

"I feel in my heart that nobody in this game ever devoted more concentration to the batter’s box than Theodore Samuel Williams, a guy who practiced until the blisters bled, and loved doing it, and got more delight out of examining by conversation and observation the art of hitting the ball."

Understand History

"I honestly believe I can recall everything there was to know about my first 300 home runs—who the pitcher was, the count, the pitch itself, where the ball landed. I didn’t have to keep a written book on pitchers—I lived a book on pitchers."

Human Nature Doesn't Change

"After two years of managing the Washington Senators, the one big impression I got was that the game hasn’t changed. It’s the same as it was when I played. I see the same type pitchers, the same type hitters."

Keep it Simple

"It’s not really so complicated. It’s a matter of being observant, of learning through trial and error, of picking up things."

Understand Batting Average

"... you are going to fail at your job seven out of ten times"

Learn from your Mistakes

"A great hitter isn’t born, he’s made. He’s made out of practice, fault correction and confidence.”

Focus on the Factors that Matter

"Have

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