I will never forget the moment when I changed how I think about competition. I was watching Barry Ritholtz interview Ken Fisher, the founder and chairman of Fisher Investments, at the opening keynote for the 2018 Evidence-Based Investing Conference (EBI West) in Dana Point, California.
Fisher was asked what it was like to build the second largest fee-only RIA in the U.S., one with $100 billion in assets under management. Fisher downplayed his success and made it seem like his firm’s size was no big deal. To prove his point, he made a startling claim about the company he founded:
We have no market share.
When I first heard this, I thought it was absurd. How can a RIA with $100 billion in assets have no market share? Fisher explained with simple math. The U.S. has over $37 trillion in assets available for management, so the $100 billion managed by Fisher Investments represented a 0.3% market share, or “a rounding error,” as Fisher joked.
His statement hit me like a ton of bricks. Despite being extremely successful in business, Fisher only controlled a minuscule part of his industry. This made me realize something interesting about wealth management: With so much money out there to manage, why would you ever worry about your competition?
As I thought about this in more depth, I came to an even more profound conclusion—you have no competition. Let me explain.
From an objective point of view, competition exists. This is true whether you are trying to grow a business, earn a promotion, etc. However, from a practical point of view, focusing too much on your competition is a waste of time and energy.
All that time spent worrying about your rivals would be better spent adding value for your clients/customers/audience. Just consider what Jeff Bezos, the founder of Amazon, said about how he views competitors:
We try to pay attention to other companies. It’s very important. You don’t want to live in a hermetically sealed bubble. We try to be inspired by what other companies do…Our goal is to be the most customer obsessed company. Is there somebody out there doing some element of what we do better than we do it? And if so, how do we improve?
Bezos is able to reframe his competition from something negative into something that inspires him to better serve his core demographic (Amazon customers) and improve himself. If you examine any competition in your life, you can probably do the same.
For example, think about who my competitors are for this blog. Do you think my competitors are other investment bloggers? No. Other investment bloggers are a benefit to me. Why? Because, when they write amazing articles, they increase engagement in our community and inspire me to write more insightful posts.
Every good article another finance blogger writes keeps people coming back to read more about finance and encourages me to improve. My real competition lies with non-financial media soaking up the attention of my potential audience. In other words, if we could get more people interested in finance, we would all benefit.
This brings me back to my prior point: you are better off trying to improve yourself than obsessing over your competition. Micheal Jordan exemplified this attitude best. After Jordan’s final game in the NBA, Tony Robbins asked him, “What sets you apart?” Jordan’s response was electrifying:
Every day, I demand more from myself than anybody else could humanly expect. I’m not competing with somebody else. I’m competing with what I’m capable of.
Jordan is right. If you give something your all, what does it matter what anyone else does? Once you have put forth your best effort, let the chips fall where they may. The outcome is out of your hands now.
This is why you have no competition. Because you are only competing against your own behavior, your own biases, and your own habits. If you don’t have these under control, you have already lost because you aren’t at your best. And if you do have these under control, then there is nothing else you can do to affect the end result.
Either scenario leads to the same conclusion—your competition is only there to inspire you to become a better version of yourself. When you focus on your own development, you will see that you had no competition all along.
The Endless Bounty
Life is a succession of opportunities—thousands of decisions that play out every day across decades. It is akin to the $37 trillion of manageable assets in the U.S. There is plenty to go around, but you still have to do the work to get it. The real beauty is that these many opportunities are repeated trials.
Bad blog post? Write another one. Bad client experience? Find another client. Bad day? There is always tomorrow.
Michael Batnick recently wrote about how the 669% gain in the S&P 500 since 1990 was the result of the index having 500 more up days than down days. That’s all it takes. Positive progress across enough repeated trials and something great can emerge.
Whether that be a career, a family, a community, or something else entirely, the endless bounty is open to anyone who wishes to call upon it.
You might be wondering why I decided to write about competition and career development instead of my traditional investment posts. The answer is simple: investing is the study of human behavior.
My goal with anything I write on Of Dollars And Data is to get you to re-examine some portion of your behavior. The way you decide on a career (or how you motivate yourself) will have a far larger impact on your well-being than anything I could write on asset allocation.
With that being said, the next time you find yourself in a competitive situation, remember this: just like in investing, the only one you are up against is yourself. Thank you for reading!
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This is post 96. Any code I have related to this post can be found here with the same numbering: https://github.com/nmaggiulli/of-dollars-and-data
Where to Invest $10,000 Right Now
Investors face a dilemma. The global pandemic has completely disrupted markets. and finding promising investments is harder than ever. Bloomberg asked experts where they’d invest right now and they overwhelmingly recommended alternatives like art.
After all, the ultra-wealthy have placed their bets on art for centuries. From Rockefellers to Bezos and Gates — all actively collect art.
There are a few main reasons why 1.) Contemporary art prices have appreciated 14% annually on average (1995-2020) 2.) The total wealth held in art is projected to increase another 51% by 2026 3.) It has the lowest correlation to public equities of any major asset class, according to Citi.
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