He lost nearly half his points and still became one of the greatest tennis players. Here’s why that matters for investors.
Roger Federer played 1 526 singles matches in his storied tennis career, winning nearly 80% of them. His elegance, dominance, and poise earned him a place among the greatest athletes of all time.
But here’s the twist: over the course of those matches, Federer won just 54% of the points he played.
Let that sink in.
Federer lost almost every second point, yet still walked away victorious in most of his matches. That’s not just a quirky statistic. It’s a powerful lesson for investors.
Too many investors think success means being right all the time. But the truth is, investing – much like tennis – is a game where you can lose nearly half the time and still win big.
Elite investors rarely get more than 55-60% of their calls right. Perfect portfolios do not exist. These investors play a game of probability, consistency, and edge.
Just like Federer, they win by showing up, playing smart, and staying in the game long enough for that edge to compound.
In his 2022 letter to shareholders, Warren Buffett offered a deeply honest reflection on his own record: “In 58 years of Berkshire management, most of my capital-allocation decisions have been no better than so-so. Our satisfactory results have been the product of about a dozen truly good decisions – that would be about one every five years.”
This is one of the most remarkable admissions in investing. One of the greatest capital allocators in history is saying that most of his decisions were mediocre, however, a handful of great ones made all the difference.
Investing isn’t about getting it right every time. It’s about positioning yourself to benefit from a few great decisions while minimising the damage from those that don’t work out.
Buffett is also known for his golden rules of investing:
- Don’t lose money.
- Never forget rule number one.
It sounds simplistic, but the logic is profound: capital preservation matters more than flashy wins.
Christopher Begg, founder of East Coast Asset Management and Professor of Security Analysis at Columbia University, builds on this mindset. He explains: “We will bypass many great investment ideas if we think there’s even an infinitesimal potential for a zero, because it’s just not something we can underwrite. We prefer downside probabilities where, if it is a zero, it means it results in a 0% expected return but a 0% expected return keeps our capital intact.”
That subtle distinction is critical: the goal is not to avoid underperformance, it’s to avoid catastrophic loss.
A 0% expected return might be disappointing but a -100% return can be unrecoverable.
The greatest investors are not just stock pickers; they are risk managers. They know that avoiding disaster is half the battle.
Many investors fall into the trap of chasing the ‘perfect’ portfolio – one that only goes up, never underperforms, and avoids all drawdowns.
But that portfolio doesn’t exist.
Just as there’s no tennis match where every shot lands perfectly on the line, there’s no portfolio that gets everything right. Even your best ideas will occasionally disappoint. The key is to ensure the losers don’t sink the ship, and the winners have room to run.
You win over time by being disciplined, diversified, and decisive – not by being flawless.
Federer didn’t need to win every point to be a champion. And you don’t need to be right every time to build lasting wealth.
You just need to:
- Make more good decisions than bad ones;
- Let your winners run;
- Avoid catastrophic losses; and
- Most importantly, stay in the game.
Because in investing, as in tennis, the score that matters most is the one at the end of the match, not the outcome of every point.
