The Tapestry of Tennis


Two first-time Wimbledon champions were crowned last week, the oldest tennis tournament in the world (1877!). Carlos Alcaraz defeated seven-time Wimbledon champion Novak Djokovic, and Marketa Vondrousova became the first unseeded woman to ever win.

Grass Tennis Court

I’ll be the first to admit (somewhat shamefully) that tennis has always felt like a niche sport to me. It’s not one that everyone (or I) played as a kid, or that everyone watches at parties or keeps on in the background of their home while leisurely cooking dinner on Sunday. But I’ll blame it on the new Netflix documentary series Break Point, a behind-the-scenes look at several rising-star tennis players attempting to take the globe by storm, one tournament at a time—I’m kind of hooked. The world of tennis is in an exciting transition in light of household names like Serena Williams, Roger Federer, and Ashleigh Barty all retiring recently. Who’s going to be the next big name in tennis? What will the next era look like, and who will control it?

Sports are complex, and that complexity is what contributes to their intrigue, in my opinion.

They’re not just silly games; they are a microcosm for life itself—a reflection of the complex highs, lows, challenges, pride, and joy that the human spirit experiences and endures. In sports matches, the best team doesn’t always win; the best player doesn’t always perform. And I would argue that the tapestry of tennis is particularly compelling. It is woven thick with threads of psychology and emotion in addition to physical technique and skill.

At its core, tennis demands unwavering mental resilience. Its solitary nature puts players in a psychological arena where they must confront their own doubts, biases, and insecurities, and they can’t share that burden with teammates the way athletes can in so many other sports; they aren’t just fighting a battle against the opponent across the court, but with every point, a player’s own mind becomes a battleground as well. The longest tennis match famously lasted 11 hours and 5 minutes! It was contested over three days between John Isner and Nicolas Mahut at Wimbledon in 2010. Even the scoreboard stopped working in the fifth set because it hadn’t been programmed to keep scores beyond that point—it was 47-47.

Think about the emotion involved in that sort of setting!

Doubt can seep into a player’s thoughts, making them second-guess their abilities, or conversely, confidence can build and do wonders for a player’s spirit. This plays a critical role in who comes out on top. To thrive, to be victorious, to win, you must have the ability to overcome adversity. You have to be able to endure the psychological turbulence that comes along with failure and defeat. You have to ground yourself in good fundamental technique; you have to be disciplined about your grip, stance, footwork, stroke etc., regardless of the emotional rollercoaster you’re on. And you have to be consistent; you hope that the muscle memory from countless hours of training and practice keeps you from making mistakes that will cost you the match.

This year, the S&P 500 Index’s performance, which is a market-weighted index, has been dominated by a small handful of companies.

Some of these have been referred to as the Magnificent Seven: Nvidia, Tesla, Apple, Amazon, Microsoft, Google, and Meta (Facebook). As an example, Nvidia Corp is up over 222% in 2023 alone. This same trend is true for the handful of others: Meta is up 162%, Tesla is up 136%, etc. However, the year 2022 rocked these (and other highly valued growth) companies’ worlds—due in large part to the Fed feverishly raising interest rates to combat inflation. Nvidia was down nearly -50% in 2022. In fact, if you owned only the Magnificent Seven this year in equal amounts, you’d be up over 100%. If you owned only the Magnificent Seven last year, however? You would have been down about -45%. The temptation to scrap long-term strategy and fundamental technique and chase the likes of these returns this year is very real for some investors, but are you jumping as fast at the opportunity to be along for 2022’s downward spiral? Recency bias is also a very real thing for investors, and in the context of the stock market, it refers to the tendency of investors to give excessive weight to recent events or trends when making investment decisions. It is a cognitive bias where individuals rely heavily on their most recent experiences, assuming that they will continue into the future, which we know is rarely the case.

When we let the emotional parts of our brain get the best of us, we do irrational things.

We overlook the broader fundamental techniques we’ve been trained on, and we act impulsively. The psychological or emotional whirlwind that comes along with a period of positive stock market performance like we’ve seen this year can cause investors to become overly optimistic and believe that the upward trend will continue indefinitely. It’s so easy to forget even something as recent as last year! This can lead to a desire to chase high-flying stocks without adequately considering their underlying fundamentals or valuations, and those highfliers may make your less impressive holdings seem even less desirable, tempting you to sell stocks in response to short-term underperformance. When stocks become overvalued, the likelihood of future returns diminishes, and a reversion to the mean may come to fruition (meaning that over time, stock prices tend to move back towards their intrinsic values). By being overly influenced by recent events, investors can fail to recognize (or remember) the cyclical nature of markets, the importance of diversification, and the need for a disciplined approach. Do not forget the mantra from Warren Buffett that you’ve heard us mention many times before,

“Be fearful when others are greedy and greedy when others are fearful.”

One thing that makes Wimbledon unique is that it is the only Grand Slam event played on grass courts, as opposed to clay. This is due to historical tradition—the sport was originally played on grass and was referred to as “lawn tennis.” This change in the landscape is quite significant. Scientifically speaking, the grass surface offers low friction and minimal ball grip, resulting in a faster ball speed and lower bounce compared to other surfaces. The short, dense grass blades reduce the contact time between the ball and the surface, making it harder for players to generate topspin. Clay courts, in contrast, provide more ball grip and increased friction, resulting in slower ball speed and higher bounce compared to grass. The softer surface absorbs more energy upon impact, which allows for more topspin.

At risk of oversimplifying a bit, grass courts tend to favor more aggressive players: powerful servers and players with good net play. On the other hand, clay courts favor solid players with reliable strokes and strong defensive skills.

If that’s any sort of metaphor for this year, the disparity between growth companies (think the Magnificent Seven) and value names has arguably never been larger—and when you consider the extra boon from promise surrounding Artificial Intelligence, the disparity in “players” this year has been unparalleled. Dividend-paying names have had an extremely unimpressive year so far—and in fact most dividend-oriented indexes have spent most of this year flat or even negative, while the S&P 500 Index, thanks to a few companies, has spent most of the year up double digits.

Remember that unlike in tennis, we do not have the luxury of knowing with certainty the kind of “court” on which we’ll be playing in the months and years to come in order to know what sorts of players will be favored. The landscape is always changing and we can only make our most educated predictions in order to assess and react accordingly, while still relying on our fundamental skills and techniques.

The arena that is the stock market isn’t for the faint of heart. Its tapestry reminds me of that of tennis—thick and layered with the best and most challenging of emotions—jubilation and despair, hope and fear. It’s exceedingly difficult to be disciplined, to be grounded in the foundational principles we know to be true over the long game. I can’t tell you the number of people who fancy themselves day-traders because they find it challenging and rewarding. You know what we find challenging and rewarding? Building a long-term strategy and sticking with it. There’s a reason so many people can’t and don’t do it—it’s hard to be patient, it’s hard to be hopeful in periods of defeat, it’s hard to separate emotion from rationality, it’s hard to admit that you’re wrong and rework your strategy to navigate a changing landscape.

Investing for the long term isn’t boring; investing for the long term takes guts.

Sarah Swan

As a Wealth Manager and CERTIFIED FINANCIAL PLANNER™, Sarah focuses her time on working with clients and is passionate about helping them achieve their financial goals


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