Investment tips from SuperCoach and other fantasy sports

Fantasy sports share some important lessons with the world of finance and investment.

When footy’s back, workplaces and homes across Australia will again be filled with fantasy sports coaches talking gobbledygook about prices, premiums and CBAs.

But the premiums have nothing to do with insurance, and CBA does not mean Commonwealth Bank of Australia in this instance. It’s an acronym for centre bounce attendances, something SuperCoaches believe is far more important than Australia’s biggest bank.

Hundreds of thousands of Aussies play fantasy sports every year, mainly across AFL and NRL but also with cricket, soccer, NFL, baseball and basketball. A mate of mine follows a fantasy surf league.

Fantasy footy coaches get their kicks (sorry!) from picking and trading players at certain prices, which rise and fall based on their match statistics. The end result for the winning coaches is reverence from their mates and colleagues, and perhaps some cash prizes.

Little do they realise they are also learning valuable lessons about investment.

Bulldog Marcus Bontempelli tries to charge through the Christian Petracca of the Demons in the AFL’s round one. Pic: Michael Klein

PATIENCE PAYS OFF

Knee-jerk reactions are sadly too common in investing, and even more so in SuperCoach. Player X has a shocker of a game on the weekend, so you dump him from your team and buy someone who looks more promising, only to discover your original pick plays brilliantly the following weekend.

Chopping and changing investments quickly is an expensive exercise, and can lead to high transaction costs and regret later on.

During the global financial crisis and the Covid share price collapse, investors and super fund members who remained patient and held onto quality investments ended up much better off after the rebound. Those who dumped assets lost money they would never recoup.

BAGGING BARGAINS

If everyone had an eye for investing like SuperCoaches seek out bargain-priced players, Australians would be richer as a whole.

Prices in financial markets and fantasy sports move in cycles, and buying any asset at the bottom of a cycle delivers the greatest chance of future success. Buying at the peak means you’re behind everyone else who bought earlier.

Australians who bought real estate in 2021 and the start of 2022, before interest rates surged and house prices fell nationally, are now kicking themselves – especially where the asset’s value is worth less than their loan.

Longer-term, every quality asset becomes a bargain if you hold onto it. Remember that 25 years ago, capital city median house prices ranged between $110,000 and $250,000.

UNJUMBLING JARGON

While SuperCoaches wax lyrical about CBAs, dual-position status, clangers and clearances, investors deal with wacky terms such as fully franked, basis points, EBITDA and FAANGs.

They are all specific to their industry, and educating yourself about what they mean is a huge part of achieving success.

SuperCoach is popular among AFL fans...

... and it’s also popular among NRL fans.

BANISH EMOTION

Being emotional about investing can kill your wealth. Too often people hold onto an investment they love and ride it to the bottom.

Similarly, fantasy sports coaches should never pick players only from their favourite teams.

It’s about making sensible decisions based on numbers, history and experts’ outlook. Love and fear should have nothing to do with it.

NOT TOO SERIOUS

SuperCoach is a game. Investing is not, but that doesn’t mean asset rises and falls should dictate your daily mood and approach to life.

If investments control you in a negative way, sell them or get a professional to manage decisions for you.

Many SuperCoaches take it way too seriously. But when you’re battling mates for a magnificent golden perpetual trophy – as I do – or office bragging rights, it’s hard not to.

Originally published as Investment tips from SuperCoach and other fantasy sports