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Timing the market with Tiger, Usain, and Roger

June 17, 2024
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FinMeUp
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FinMeUp

Can the GOATS outperform the market?


They say that timing the market often underperforms time in the market. This may be true for most, but one does not become the GOAT by following the herd. In this article, we follow three legends of the game to determine whether their success on the field could be replicated in the market as well.

Introducing: The Hall of Fame Portfolio with Tiger Woods, Usain Bolt, and Roger Federer.

Lets start with the benchmark: The one and only S&P500. The figure below illustrates just how volatile the stock market can be. In the last quarter century, it has moved by double digits on 17 out of 25 occasions. The average return (including the 18,18% retraction in 2022), yields 8.24% for the index over this period.

Year          Change
1997           +31.01%
1998           +26.67%
1999           +19.53%
2000         -10.14%
2001          -13.04%
2002         -23.37%
2003         +26.38%
2004         +8.99%
2005         +3.00%
2006         +13.62%
2007         +3.53%
2008         -38.49%
2009         +23.45%
2010          +12.78%
2011           +0.00%
2012          +13.41%
2013          +29.60%
2014          +11.39%
2015          -0.73%
2016          +9.54%
2017          +19.42%
2018.         -6.24%
2019         +28.88%
2020        +16.26%
2021         +26.89%
2022.       -18.18%
Average  +8.24%

 

So, what if we only invested in the market in the years that these stars achieved the pinnacle of their respective sports? For Tiger, it would be his PGA Masters titles. For Usain, the years in which he won gold at the World Championships and Olympic games. For Roger, all the years he achieved greatness at the All-England Club in Wimbledon. 

 

Tiger Woods

Tiger Woods, known for his incredible putting and red T-shirt, won the Master tournament in 1997, 2001, 2002, 2005, and 2019. Akin to his personal life, his results in the market would have yielded incredibly volatile results:

Masters               Return

1997                      +31.01%

2001                     -13.04%

2002                    -23.37%

2005                     +3.00%

2019                     +28.88%

Average               5.30%

 

Tiger had two amazing years in 1997 and 2019, but it was offset by two devastating years after the Dot.Com crash in 2001 and 2002. Investing in Tiger would have yielded a 5.30% average return, underperforming the index average by roughly 3%. 

Tiger might have won our hearts on the golf course, but investing in his success would have yielded sub-par results (and not in the way you would like it on a golf course). 

 

Usain Bolt

Usain Bolt won gold at the world championships in 2009, 2011, 2013, and 2015. He also won gold at three consecutive Olympic Games in 2008, 2012, and 2016 - an incredible testament to his sheer talent and determination.

Worlds                   Return

2009                     +23.45%

2011                      +0.00%

2013                      +29.60%

2015                     -0.73%

Olympics             Return

2008                     -38.49%

2012                      +13.41%

2016                      +9.54%

Average               +5.25%

 

Usain had a pretty good run, outperforming the market more often than not. Unfortunately, he made a massive error in judgment, tripping over the final hurdle and falling by more than 38% in the 2008 financial crisis. 

The inclusion of this year turned out to be devastating for Bolt investors, reducing his average return to a mere 5.25%. He is, indeed, mortal. Similar to Tiger, Usain underperformed the market average by roughly 3%. 

 

Roger Federer

Roger Federer boasts an illustrious career, winning a record 20 grand slams over the course of 24 years. From all of these titles, Federer was known for his speed and agility on the grass courts of Wimbledon. He won eight titles at this venue: From 2003 to 2007, 2009, 2012, and 2017.

Wimbledon        Return

2003                     +26.38%

2004                     +8.99%

2005                     +3.00%

2006                     +13.62%

2007                     +3.53%

2009                     +23.45%

2012                      +13.41%

2017                      +19.42%

Average               +13.98%

 

Roger played the market like no other: He avoided the Dot.Com crash in 2000-2002. He won consecutive titles from 2003-2007, before losing in 2008, missing the 38% drawdown in the 2008 financial crisis. He won again in 2009, 2012, and 2017, before avoiding the 2018 retraction. He finally decided to retire in 2022, just in time to miss the current recession. 

Roger Federer perfectly manoeuvred the volatility of the stock market, yielding an incredible 13.98% average return, beating the market average by 5.74%. Rogers success re-established his GOAT status, on and off the tennis courts.

 

Could they beat the market?

Average returns:

Usain: 5.3%

Tiger: 5.25%

Roger: 13.98%

 

S&P500 Average: 8.24%

Hall of Fame Portfolio average: 8.18%

 

We really wanted this time to be different, but alas. Time in the market once again prevails.


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