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Tuesday, September 19, 2006

nascar in the market

I have had occasion over the past few weeks to spend much time thinking on models of success in life as well as markets. As I continue my voyage into the 4th decade of life, my original plan of marching to the sounds of a swing band playing in the mood straight from adolescence into retirement seems to need some minor modifications...dont get me wrong, I ll keep the band playing and the day the dancing stops so do I, but some of the things I planned out a few years now need some tweaking. I had ample opportunity for reflecting, first driving to NYC for the junto and back, a long walk along the backroads of CT with a wise friend and advisor, all in the past week. After a long weekend back home, I hit the couch on a dreary Sunday, grey, overcast and nothing much to do kind of day. True to my quasi, urban yuppie redneck roots, I flipped the channels around until I heard the familiar tones of good old darrell waltrip,”boogity, boogity , boogity, lets go racing.....and therein I found a model for much of what it takes to succeed in life and in markets.....

Full out competition......a constant effort, all the time with everything on the line the whole race. There are no 3 martini lunches at 200 mph. Drivers on a nascar track run pedal to the metal for the full 4 or 500 miles every Sunday. Brakes are applied only for throwing the car through the corners and to avoid accidents. The engines are designed and built to withstand the constant high rpm running and to win, you must extract every ounce of horsepower not just for a qtr mile but for hours of continued running...focus is everything. Barreling into a turn at 190mph with 42 other cars around you, and the guy next to you close enough that you re sharing paint, its no time to be wondering whats on the happy hour menu at the dew drop inn. We all have day to day concerns but when the market opens or your daughter has her first broken heart its no time to dwell on them. When something goes wrong and you find yourself going backwards at incredible speeds or you SO wants to know how come you dont talk anymore its probably not the time to be wondering what time the orioles game starts tonight.....

Constant adjustment...its not enough to just to build a great car and throw it on the track. During the day the suspension is going to change, the track is going to heat up, tire pressure will change, annoying little stuff will go understanding of whats changing(the switches) and the ability to change it in less than 15 seconds in the pits is critical to winning. We can all build decent models that trade great on paper and even run well for the first few laps around the market track. Or start relationships that in the first bloom of like and lust run like JR in the last 10 laps at talledega , but everything life changes. Pressures build up, assumptions are challenged and sometimes in life and markets we cut a tire in turn 3. The ability to adjust, refine and get back on the track is critical to winning. And note that without a pit crew, the average stop would take an hour or so instead of 15 seconds...the support people, friends, assistants, relatives etc who surround us and help keep us on the track are critical to success in any venture. And choose them a tire changer who cant figure out how to turn on an air wrench, the wrong people around us can cause up to lose a wheel at 200 the support people wisely because in the heat of the moment, you will have to depend on them.

Testing on Friday wins on many times on the list have we heard test and count? Far from being just a bunch of unenlightened rednecks with souped up chevrolets, the drivers today spend a lot of time in wind tunnels and on test tracks with sophisticated monitoring equipment testing their ideas, their cars and themselves long before they take the green flag at Daytona to start the season. Every spare moment is spent testing and refining new set ups and combinations to wring extra speed out of the motor. Everything is measured and tested to the finest possible degree to give the greatest chance to win.The chair and others exhort us to test and count, not just once but always. If you can it,think you can test it.

You must adapt. Every day will not be the same, and all the tracks are different. There are superspeedways, short tracks,road courses,flat tracks, banked tracks. Rockingham chews up tires, California has no banking, dover is concrete, richmond is asphalt, bristol has difficult pits, pocono looks like a 4 lane highway coming down the lane. You have to have a book on each track each week because conditions will be, marriages, careers, kids, there are cycles to it all. The tracks will be different every week,every month every year. I f all you know how to do is day trade tech stocks or drive superspeedways, you ll spend a lot more time, you ll spend a lot of time driving around At the back of the pack when conditions dont suit you.If all you know how to do is drive left or you re only good at the pickup stage of a relationship, road courses and day to day life will spin you off into the sand pits
You will make both friends and enemies. Friends are more important.Your enemies may not like you or speak highly of you..there is really very little they can do to hurt you without damaging themselves. Feuds between nascar drivers are legendary ..waltrip and earnhardt, gordon and wallace,pearson and petty. These guys have tangled up on the track and are really not that fond of each other but theres no way to take vengeance in a meaningful way without wrecking your car as well or suffering a stiff penalty from the regulators

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