The NHL playoffs are well under way and Connor McDavid has carried his Edmonton Oilers into the second round. In order to get them there, McDavid posted one of the best regular seasons in recent history becoming just the sixth player in NHL history to score more than 150 total points in a season, a mark that had not been eclipsed in nearly thirty years. An impressive feat for sure, but one that still only ranks 16th all-time and pales in comparison to what another Oilers’ player did back in the 1980’s and early 1990’s.
From 1980 to 1994, Wayne Gretzky led the league in scoring eleven times. During this stretch he averaged more than 175 points per season, with four eclipsing the 200 point mark. As a result, when Gretzky retired in 1999 he did so holding 60 NHL records. Remarkably, 58 still stand to this day. This Hall of Fame career also included four Stanley Cups, nine MVPs, and more assists than any other player has points.
Yet, while Gretzky is firmly entrenched atop hockey’s Mount Rushmore, this was not a foregone conclusion growing up in Northern Ontario in early 1970’s.
As a 5’6 125 pound fourteen-year-old youth hockey player, Gretzky was significantly smaller than most of his peers. While many saw this as a meaningful disadvantage, Gretzky simply viewed it as an obstacle to overcome.
Knowing he had to find a way to compete against much larger players, Gretzky determined he had to approach the game differently. The question was how?
He started by watching NHL hockey games on television with a pen in his hand and a pad of paper on his lap. As the puck moved around the ice, he would follow it with his pen. At the end of each period, he would look down at the paper, see where his pen had gone (and therefore the puck), and then do it all over again the next period.
Over time, a trend began to emerge — the puck seemed to spend a disproportionate amount of time in front of the nets, while the corners and area directly behind the net were consistently untouched.
This simple exercise gave Gretzky an idea — could he gain an advantage by playing in these less occupied areas on the rink?
To test his theory out, Gretzky decided to study NHL players who played differently, most notably players like Philadelphia Flyers’ star forward Bobby Clarke.
Instead of playing from in front of the net, Gretzky watched how Clarke played from the “corners”. He saw how this enabled Clarke to keep his hands free and head up, which resulted in him being both durable and a consistent league leader in assists.
When Gretzky reached the NHL, not only did he apply these lessons to his own game, he expanded on them. This meant operating from the corners and from directly behind the net. This enabled him to use the goal as a decoy, but also, in his words, “helped avoid getting knocked on my keister all of the time.”
Gretzky undoubtedly had enormous talent. No one could have achieved what he did without it. In fact, many believe his peripheral vision was 20-30% wider than the average person, meaning he practically had eyes in the back of his head. Yet, this alone does not explain the full magnitude of his greatness.
Ironically, what enabled Gretzky to become the greatest hockey player of all time may have been his greatest perceived disadvantage as a youth — his lack of size. While his opponents relied on their size and strength, Gretzky had to out-think them and play a different game. This challenge made all the difference.
If true, this begs a few important questions.
Was Gretzky’s small stature as a youth hockey player in fact a disadvantage at all?
Would he have been better off being the same size as his peers?
How about if he had been bigger, stronger, and faster?
The answers are obvious.
In the short-term, the answer is very likely “yes”. In fact, given his extreme peripheral vision and skill, Gretzky might have been much better off as a youth player. Yet, as with most things in life, it is likely that this would have come with several longer-term tradeoffs. Namely, Gretzky would have likely played a much more conventional style by the time he reached the NHL relying on his physical skill instead of his hockey IQ.
Would Gretzky still would have become a great NHL hockey player?
Very likely.
But would he have become the NHL’s undisputed greatest player of all-time?
I highly doubt it.
Knowing this, it begs another question. Are investors (and frankly society at large) thinking about the concept of disadvantages incorrectly?
I believe so.
Look no further than what Byron Wien, the legendary former Morgan Stanley market strategist (and now of Blackstone), said in his infinitely thoughtful “20 Life Lessons”, which he wrote after spending nearly a half-century on Wall Street,
“Don’t try to be better than your competitors, try to be different. There is always going to be someone smarter than you, but there may not be someone who is more imaginative.”
Unfortunately, this is precisely the opposite of what most investors try to do these days. Instead of aiming to be different, most attempt to become the “next” Warren Buffett, David Swenson (Yale’s famed endowment CIO), Peter Lynch (Fidelity’s Magellan Fund manager), Julian Robertson (Tiger Management founder), Don Valentine (Sequoia’s founder), or Paul Tudor Jones (famed global macro hedge fund manager). In doing so, aspiring investors are missing the fact that what made Buffett, Swenson, and the others so great was that they themselves aimed to be different and more imaginative, not because they emulated other investors.
The trouble is these days it is harder than ever to be different. Investors are glued to their screens (both phones and televisions), inundated with instant information, and critiqued by consultants and limited partners like never before. As a result, volatility is less tolerated, underperformance is more scrutinized, and patience is all but forgotten. This means investors are largely afraid to look different, choosing instead to pile into the same strategies, investments, and themes.
Will this change? It is hard to envision a scenario in which it does on a large scale, but I am guessing there are at least a handful of “disadvantaged” investors out there who have been disregarded, neglected, or overlooked over the past decade and are working on their version of following the puck with their pen. Eventually these investors will find what parts of the market are getting the least attention and will begin to occupy those spaces.
If you are one of those investors, please do not hesitate to contact me. I’d love to chat.
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