What can we learn about Portfolio management from Football
http://www.stockopedia.com/content/...bout-the-art-of-portfolio-construction-86960/
Excerpts
Football teams and portfolios really aren't all that dissimilar, but the way the game is played is. Rather than charging at you head on, the market lulls you into a false sense of security, teasing you into feeling comfortable playing with just a handful of players... letting you strike a few goals, letting you take and defend a lead... only to snap back and counter attack months or years later, right at the moment you've grown most complacent.
It's the slow tempo of the stock market game that encourages too much risk taking and a poor selection of players.
Structuring your portfolio to protect against delayed consequences is mission critical in stock markets, and it starts with giving every stock a role....
Both risk seeking and risk aversion play a part in our financial lives. We buy lottery tickets for the upside as well as insurance on our assets for the downside. While many novices treat their stock portfolios as a lottery tickets, they usually don't last long. By segmenting your portfolio into different 'mental accounts' you can allocate more clearly to managing downside risks without restricting upside... from defenders (conservative stalwarts) through midfielders (midcap quality and growth) to strikers (aggressive smallcap speculations or moonshots).
On the subject of broader team selection we can push the football analogy further. Good managers will always field players of various ages and experience (different industries & stages of business cycles) with plenty of foreign talent (geographic sales exposure) and won't forget to field a team with the full quota of players (breadth).
Thinking like this can help you structure a well balanced portfolio that covers the key diversification themes across risk, industry, geography and breadth... with plenty of stocks that zig when others zag.