The Investors Gambit

There are very few times when I watch something, whether it be a movie or a TV show, and feel compelled to sit down and write about it immediately. I felt that way after finishing The Queens Gambit on Netflix yesterday. The only other time I can remember doing something like this is after seeing Bohemian Rhapsody on a flight home from London. I landed and wrote about my career change at Baird (check it out here). When something is so good and so wonderfully crafted that it inspires you to relay a lesson, you heed the call and start sharing.

The story is about an orphan, Beth Harmon, who has a special gift: she’s an incredible chess player. It follows her from a tragic beginning, through an orphanage where she learns to play from a janitor, into a foster family, and eventually ending up at the pinnacle of her sport. Chess you say? Chess is slow and boring, why would I bother with something like that? You should watch this because it is one of the best TV shows of 2020 and is well directed and well cast, blending the style and flair of Mad Men with a powerful story about the ups and downs of one woman’s chaotic journey.

When I say chaotic journey, I mean it. What Beth goes through includes the death of her family, a nonstop fight with substance abuse, bouncing in and out of relationships, the fact that she is a woman in a male dominated sport, competition with a rival she can’t seem to beat, and a nagging sense that maybe she’s not good enough to be a champion. The struggle is real.

In the end, the journey with Beth is so inspirational that I thought I would share what I think we, as investors, can learn from it.

She is beset on all sides by demons: Her demons include drugs, drinking, failed relationships and a lost mother. She is fighting on all fronts against forces seeking to knock her off a path to success and so are we daily. Someone on TV says “the market might crash”, an article on FB says “here comes hyperinflation,” and the news says “our society is falling apart.” Beth beats her demons by finding inner strength, trusting herself, and relying on friends to see her over the final hurdle. In order to succeed at investing you are going to have to fight against the forces of pessimism daily. Stop listening to them because they are toxic to your goals and you can’t be a champion with them in your life.

Her path to success had many ups and downs. She’s winning, it feels great and we share in her success. She loses, falls into a slump, but how will she ever recover.   The stock market will give you a taste of success, then remind you what it means to lose. You won’t know when these will occur or how long each will last, but I promise you that you’ll experience both along the way. There’s no getting around it.  Ultimately Beth is an resilient character, even with her flaws.  You must be too.

When you are lost, bewildered, uncertain of the path forward, look for signs.  One of my absolute favorite parts of this series is when Beth visualizes chess on the ceiling. In the orphanage she did not have a chess board, so she played in her mind. It’s just incredible, the creativity of it is astounding.  Find smart people to follow, good books to read and educational podcasts to listen to. The signs are there to lead you down the right path, look for them.

You have to face your rival eventually, what you do to prepare for that will determine your success. Beth has a rival in the chess world, Borgov, a Soviet Grand Master. She prepares for her matches with him by reading books, playing other masters and thinking outside the box. But she struggles because he is a formidable opponent.  You know who your biggest rival is in investing? It is yourself and you are a formidable opponent. Your brain is constantly working against you because investing is risky and humans don’t like risky things. You need reassurance that things will be ok and your brain says “nope, things aren’t going to be ok” because dangers lurk. You must face your rival and conquer them in order to reach your goals but I implore you, get help (like Beth did) if you need it.

I could keep going with more lessons but in the interest of your time, I’m going to wrap it up by saying you should really watch this series. It is only seven episodes and it doesn’t require a titanic amount of time to watch.

Investing isn’t easy, just like trying to become a world champion chess player isn’t easy no matter what gifts life bestows upon you.

The Queen’s Gambit is an opening move designed to play a game of chess according to your game plan.

What will be your opening move, middle game, and end game, as you invest?  What exactly is your game plan and how do you plan on sticking to it?    

Learn from Beth, learn from those willing to help.

Now, let’s play.