Tuesday, April 9, 1996

I have two hobbies to which I devote the bulk of my free time: golf and investing. I've come to realize they're a lot alike.

ON GOLF

Sandpiper Golf Course near Santa Barbara is both a fine test of golf and a wonderfully scenic walk along the ocean. I had played the course in 1994 and struggled to shoot 92. This past January, having improved my game, my goal was to shoot around 80.

As I stepped onto the 18th tee, I realized I could break 80 with a par 3. The strategy was simplicity itself: hit it short and your ball grows gills in a pond fronting the green; hit it long and you face a very nasty downhill putt. The posted yardage was 170, and two years earlier I would have unquestionably accepted it, pulled out a 5-iron, and hoped for the best. But I'd since learned that scorecards show generic measurements, and that tee and pin positions moved daily can change the length dramatically.

I turned to my wife, who was also having a nice round.

"No way this is 170," I told her. "At least 180 to get near the flag."

"Don't hit it long," she said.

"Not a chance." I had a 5 wood in my hands. I'm a high ball hitter anyway, but when I tee up the 5 wood, birds start shaking.

I aimed at the pin, focused on rhythm, and made a smooth pass at the ball. I knew right away it was sweet. I heard murmurs of "good lookin' shot," and realized the group behind us had caught up and seen my teeball. After hanging in the air seemingly forever, the ball dropped softly about five feet below the pin and rolled gently into the cup. My first hole-in-one, and on the final hole of a challenging course!

ON STOCKS

Being a dedicated Fool, I took immediate note of the Fool Portfolio purchase of Ride Snowboard last year. I studied Ride a good while before buying, since all I knew about snowboarders suggested they were the bane of sane and respectable skiers. I came to admire the management, though, and in August I bought in at 16.

When the Fools decided to dump RIDE at 22 this past winter, I took particular umbrage and even questioned the editors directly. Meanwhile, I continued to hold as Ride shares marched up to 34 ,where they hovered for a while. Still, rather than feeling smug at besting the Mighty Fools, I remained alert, since the Gardners' usual long-haul forbearance made their unanticipated RIDE sell particularly notable. Information from the Fool Ride Board began to suggest that hard numbers on the snowboarding industry were controversial, that more well-funded players were entering the business, and that performance clothing sales were disappointing. Suddenly, I realized the Gardners' sell was like a front-running golfer who aims for the middle of the green: having bought Ride at a much lower price than I, they could afford a caution I might do well to emulate.

On January 11, 1996, I placed an order to sell RIDE at the opening of trading the next day. The order was filled at 9:30 a.m. at 33 3/8. At 12:45 p.m., an analyst downgraded Ride earnings for the next quarter, and the shares immediately dropped over twenty-five percent.

Seeking aggrandizement over my departure from Ride would be as deluded as to propose I'd known my California stroke was an ace before the ball went in the cup. This perfectly-timed sell represented nothing more prescient than a financial hole-in-one. On the other hand, you've got to do some things right just to get lucky. As my considerable golfing experience had given me confidence in my club and shot selection, my conviction to sell Ride was borne of equivalent reasoning and research. While I could make those same good preparations one hundred times hence and not get a hole-in-one, I doubt that my California ace was attainable without them. The same is true in buying and selling stocks.

ON LIFE

Events persuade me that real satisfaction is measured less in accomplishments themselves than in the process which creates them. Had Ride marched up to 45 instead of dropping like a rock, I would have remained satisfied. At this moment I hold a large position in KLAC that is currently in the red, and while I keep a steady watch over it, I'm content with my decision-making. Ultimately, we're alone in our own thoughts, and must reside in our beliefs. Successes and mistakes made hand-in-hand along the way are the foundation of those convictions that sometimes give luck a chance.

Transmitted: 4/9/96