By Many variables go into making picks – whether on the track or in the markets.
Over the last few weeks, I’ve seen a lot of you at Keeneland enjoying the beautiful Kentucky spring while we watch the races. Even if I invited you out and you weren’t able to make it, I think we can all agree spring in the Bluegrass is truly a wonderful time of year. One question that always comes up, whether we’re talking about the financial markets or the horse races at Keeneland, is “What do you think Dave?”
I know when you ask this question, you’re looking for a short, concise response (unless of course you know me!). Well, let’s leave the markets out of this for a minute and just talk in horse acumen for a while. Just like your portfolio, where I know your number one goal is for it to make you money, I know at Keeneland your goals are to a) have fun, b) eat bread pudding or the relatively new butter cake, and c) try to pick a winner!
At the horse track, just like in the stock market, there are all kinds of ways to pick potential winners. Some people like fancy names. Some people pick based on the sire and dam. Some folks like particular owners, trainers or jockeys, and some people base their picks on past performance. (However, past performance is not indicative of future results.) At the end of the day, whichever animal you end up choosing, you’re always making your selection based on what you think will happen in the future. Sound familiar?
Just like in the markets every now and then, the most thrilling experience is when you’re right about your pick and your horse crosses the finish line first. The most frustrating feeling, on the other hand, is when you know you were right about your pick, but conditions during the race didn’t go your way. In racing, just like in the markets, a myriad of things can happen at any given moment that wreak havoc and cause disaster. The horse might not want to go into the gate, or he could stumble coming out of the gate. Maybe the horse throws the jockey, or runs into another horse (they don’t like that). Or, perhaps it’s muddy at the track that day, and the best jockey in the world decided to position your horse right behind another horse who’s slinging dirt-covered moon pies in said horse’s face (they don’t like that either).
Or, maybe it’s a perfectly sunny day and as the horse rounds the final turn, your jockey forgets to tell the horse to turn, and he decides to run over and say hi to the people in the grandstand. I saw one race where the horse and jockey were winning, and in the final eighth, the horse decided he was a steeplechaser and jumped the fence, surprising not only the jockey, but the crowd. In fact, I’d like to offer up that, as someone who truly enjoys horse racing, I have witnessed every way a horse can lose a race. (Yes, I know I’ll regret saying that!)
But let me assure you, when you ask me what I think – about a horse or your accounts – the cogs in my head start turning and I have a bazillion thoughts as I process what appears to be a simple question. I put it through the filter of your family’s life goals and dreams and do some quick computations on whether they’re working or not. And while we do have computers and software that helps, I know oftentimes the question you’re really asking is not about numbers in a spreadsheet. What you’re really asking is, “Am I going to be okay?”
I’ll say what our team has told you before: We promise, good news or bad news, you’ll hear it from us first. And rest assured, whether in these crazy things we call the equity markets or trying to pick a horse, we’re always trying to pick you a winner.
Article by David Smyth, CLTC, Senior Partner at Family Financial Partners — a financial services firm in Lexington, Kentucky.