How Jack Nicklaus Can Help You Invest-
(**Return figures come from the April 30, 2026, edition of the Wall St. Journal. Y H & C Investments may have positions in companies mentioned in this newsletter. Nothing in the newsletter should be taken as an offer to buy or sell individual securities. It is the responsibility of each investor to research the investments mentioned so they can decide on the appropriateness and suitability of the investments consistent with their risk tolerance, risk constraints, and return objectives.)**
I enjoy golf and used to play a great deal. I was never able to become very good because I just couldn’t master the fundamentals. I really enjoyed the tactical and strategic parts of how to plan out where you should hit the ball, and trying to avoid trouble. The reality of golf for me was that I could understand what to do, but if you cannot execute the shots, it doesn’t really matter. Still, thinking about whether to hit a draw, a low cut, a high fade, trying to stay underneath the hole, all of these little factors that make a difference, I think, is what attracts many people to golf. Also, being outdoors and among some of the most scenic spots in the world, well, it can be quite addictive, especially if you can hit the golf ball flush. Nothing like that feeling, nothing. That is all well and good, but how does it relate to investing?
The advice from Jack Nicklaus on being a champion sums it up quite nicely. You have to understand yourself and what you are trying to accomplish. With the digitization of financial markets, an investor can choose any strategy, tactic, instrument, time horizon, asset class, and leverage amount they want. You can use an artificial intelligence program to set up any criteria you want and compare all kinds of situations based on whatever you are looking for. You can invest in any country, currency, cryptocurrency, option, swap, interest rate, future, or forward, and now use prediction markets on an event basis. Say you are long a stock but think a company is going to miss the quarter. You can hedge your own exposure just by owning a prediction to reflect your skepticism. The world will continue to be your oyster if you are an investor, as the possibilities only grow by the day.
Let’s go back to Jack, my friends. You have to understand your strengths and weaknesses. In my practice as an advisor, I have found it mandatory to have an investment policy statement that outlines the situation, what you are trying to accomplish, and why. As an advisor, I believe you become a better investor because you have to invest based on what clients want to accomplish, so finding the correct fit for asset selection is paramount. Another part of success is understanding that you cannot own everything. You only have so much capital. You can borrow to invest, but then you are introducing time and potentially market pressure if things go against you. You can look at thousands of instruments, and that does not mean you will have success. It means you are spending a lot of time working on finding a good investment, but if that is all investing were about, why do so few professionals manage to outperform indexes over a long-term time frame?
My approach is to be single-minded in buying high-quality businesses and have them work towards becoming larger over a long period of time. Why do I want to own this particular enterprise? Why is this company and management team a group I want to be a minority investor of and partner with? What are the existing competitive advantages, and are they just beginning, potentially getting stronger, or can they be built on? Does the capital structure favor me as an owner? What is the margin and profitability profile of the industry and company? Is the balance sheet comprised of unique assets or liabilities that cause or alleviate financial pressure? Do I understand the current cap table and who influences what the board might be thinking about the future of the business? These are just some of the questions that I take into consideration when evaluating an investment opportunity.
You will notice none of this involves putting any trading limits on positions. I often see other investors say that if a position goes against them by x percent, they reevaluate it. If that works for them, great. It is never even a factor for me. In fact, I believe the biggest mistake an investor can make is selling at the bottom. If ever there was a great example of this, consider the following piece of information from the April 26, 2026, William D. Cohan column in Puck. It sums up how much money Sam Bankman-Fried would have returned to investors if FTX had not been forced into bankruptcy and John J. Ray III had not sold his portfolio of investments. In total, the unrealized gains would be worth an estimated **$114 billion.** Sam certainly wasn’t ethical, nor stupid, but this highlights the point- you do not sell because you have paper losses, and you certainly do not sell at or near the bottom or a historical price range. In this astronomical example, **114 b’s** is a lot of value to forego because of forced selling.
In sum, for me, i**t always starts and ends with: Is this a business I want to own a piece of?** I am not worried about what others own, what they buy, when they sell, what they sell, why they sell, or what they think about the market. By the way, Nicklaus still might be considered the best golfer of all time, so keep that in mind.
Posted by ybockyhc