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Winning the Loser’s Game

November 11, 2013

In the book, Investment Policy: How to Win the Loser’s Game, author Charles D. Ellis discusses the fascinating conclusions of Dr. Simon Ramo. Ramo’s book on playing strategy, Extraordinary Tennis for the Ordinary Tennis Player (New York: Crown Publishes, 1977), identified the difference between a winner’s game and a loser’s game.  Over a period of many years Dr. Ramo observed that tennis was not one game, but two: one played by professionals and a very few gifted amateurs; the other played by all the rest of us.  After extensive scientific and statistical analysis, Dr. Ramo summed it up this way: Professionals win points; amateurs lose points.


In expert tennis, the ultimate outcome is determined by the actions of the winner.  Professional tennis players stroke the ball with strong, well-aimed shots, though long and often exciting rallies, until one player is able to force an error by his opponent or to drive the ball just out of reach.  These splendid players seldom make mistakes. Amateur tennis, Dr. Ramo found, is almost entirely different.  Brilliant shots, long and exciting rallies and seemingly miraculous recoveries are few and far between.  On the other hand, the ball is fairly often hit into the net or out of bounds and double faults at service are not uncommon.  The amateur player seldom beats his opponent; rather he beats himself all the time.  The victor in this game of tennis eventually gets a higher score because his opponent is losing more points. 


As a scientist and statistician, Dr. Ramo gathered data to test his hypothesis in a clever way.  Instead of keeping conventional game scores—love, 15 all, 30-15, and so forth—he simply counted points won versus points lost.  He found that in expert tennis about 80 percent of the points are won, but in amateur tennis about 80 percent of the points are lost through errors.



When I was in my early twenties, I loved reading books and listening to tapes on negotiating.  One of the people I remember listening to was a man named Roger Dawson, who is the head of the Power Negotiating Institute. To stay focused on what’s important during a negotiation, he suggested reflecting on what controls the outcome of a tennis match. 


Roger’s point was that it’s not the equipment, the line judges, the weather, or even the players themselves that controls the outcome of a tennis match. The ultimate factor that determines the outcome of a tennis match is the movement of the ball across the net. The player who can concentrate and most effectively move the ball across the net will look at the scoreboard and notice they’ve won the match. This is true for negotiating and for trading.


For me, my greatest success came when I finally decided to forget about the money and just concentrate on being the best trader I could be, which was my version of moving the ball across the net. I focused purely on making good decisions and working on my weaknesses until they became my strengths. Once I could move the ball across the net effectively on a regular basis, I achieved monetary success as a natural byproduct of my efforts.


Instead of worrying about the money, concern yourself with doing the right thing according to your plan. Making money is the result of effectively carrying out a well thought-out plan that utilizes sound principles.  Focus on moving the ball across the net.


Mark Minervini



Master Trader Program Superperformance Workshop



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