This week the NFL will have its annual draft. Every team will each pick the player they feel will best help their team.
There is a lot of conversation and speculation on who each pick should be. Here in Green Bay fans are making their favorite pick. There is speculation that Ted Thompson, the Packer General Manager, will choose a linebacker or is it defensive lineman or is it offensive lineman?
Whomever each team chooses there will be questions about whether it was the right pick.
I believe if the player chosen helps you win it is a great pick. If not the picker should be fired. There have been countless hours used to analyze the correct pick.
As I said the only true test is how the draft pick performs on the field. Will he help us win?
Some teams trade future picks to move ’up’ in the draft to pick the ‘right’ player. This is much like trying to pick the next ‘hot’ stock and next ‘hot’ asset class.
Other teams like the Packers, Ted Thompson, Cherishes each draft pick. These managers believe in diversification. They know that trading and draft picking do not work over the long term. They know that you cannot predict a players success based on his past performance.
Some picks will work out great and some will be ‘busts’.
Like investing the successful teams build each year with diversified picks. They do not look for the ‘one’ guy to bring them to the promised land. The Super Bowl.
Predicting the next great player is like listening to The Jim Cramer Show. Each day Jim gives his ‘hot’ picks. He also gives his prediction of the future, ie, which way will the market go over the short term. His record, if you check, is quite poor.
Here’s a fun fact. The producer of the Jim Cramer Show is the same producer of the Jerry Springer Show. Remember the Springer show with its wild out bursts? It was purely for entertainment. Much like the Cramer show. The producer was interviewed and said that most of the ideas for Cramer’s show came from the Springer show.
As an investor you need to ask yourself. Do you want to predict the next ‘hot’ stock or next ‘hot’ asset class? Or do you want to develop a diversified portfolio with consistent success?
As in the NFL the draft is just the beginning. The next step to success is coaching. With the guidance of an investor coach/fiduciary adviser you will have the necessary discipline for long term investing success.