The Investment Lesson from Game #2
Douglas Goldstein, CFP®, co-author of Rich As A King: How the Wisdom of Chess Can Make You a Grandmaster of Investing (Morgan James Publishing, 2014, Susan Polgar and Douglas Goldstein)
While watching the conclusion of Game #2 unfold, realizing it would be a draw, I got to thinking of a comment someone made to me when I told him about Susan’s and my upcoming book, Rich As A King: How the Wisdom of Chess Can Make You a Grandmaster of Investing. He said, “What a fabulous idea for a book! After all, chess players always think far into the future and investors also need to plan ahead.” Though I appreciated the compliment, I think he oversimplified the theories that we’ve been working on for years.
No one needs to learn chess just to understand that planning ahead is an important skill. Just read the Bible! It wasn’t raining when Noah built the Ark… He planned ahead. The lessons from the chessboard go much deeper than simple sayings. And Game #2 provides a good example of an important idea that investors, or anyone for that matter, can learn from chess.
What are the goals of Anand and Carlsen?
To the dismay of many chess enthusiasts, there was no bloody battle in either the first or the second game. Both the reigning world champion and his opponent, the highest-ranking player in the history of the game, have a different goal from the audience. Spectators want to see courageous moves. They want to reminisce about the tournaments like those of Capablanca, Fischer, or Kasparov. But turn the board around and look at it from the point of view of today’s contestants. With millions of dollars of prize money and corporate endorsements on the table, would they dare risk losing just to entertain the fans? Each one is waiting until he feels that he has the right opportunity or until he spots an error committed by his opponent that he can exploit in order to win. And at this level of game, those breaks don’t often arise.
In both chess and investing, understand your goals before you make a move. Though risky play might be fun, it doesn’t make you a world champion or a wealthy investor. Strategic play coupled with well-planned tactics is what will make you a winner. First, think of why you’re playing or investing. You should only make your move after you have clearly defined your goal.