In his famous 1975 essay, The Loser’s Game, investing guru Charles Ellis used the game of tennis to highlight two different approaches to success.
He argued that tennis — like investing — is really two different games, depending on who’s playing.
Professional tennis is a winner’s game. The outcome is usually determined by the player who hits the most winners. Big serves, pinpoint accuracy, clever spins, drop shots — professionals play to win points, and they do it with power, control, and strategy.
But for the rest of us, it’s a completely different game.
Amateur tennis is a loser’s game. Points aren’t usually won — they’re lost. We double fault, hit long, shank forehands into the net. The more mistakes you make, the faster you lose.
And so the smartest strategy in amateur tennis is not to try hit winners, but to make fewer mistakes than the person across the net. Just keep the ball in play. Hopefully the other person hasnt read Ellis’ essay.
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Ellis’s point is that investing is no different.
Most people treat investing like a winner’s game. They try to outsmart the market. They chase hot stocks, try to time their entry and exit perfectly, jump from trend to trend. But the market is a complex system — arguably the most complex, unpredictable game in the world — and nobody, no matter how clever, can consistently “beat” it.
Trying to do so often leads to costly errors: buying high, selling low, chasing returns, reacting emotionally.
That’s why good investing is a loser’s game. Success doesn’t come from brilliance — it comes from avoiding unforced errors. From being patient. From knowing what you can control and letting go of the rest.
As Ellis quotes in his essay, engineer Simon Ramo once said:
“Give the other fellow as many opportunities as possible to make mistakes, and he will do so.”
Investing works the same way. You don’t need to do extraordinary things to get extraordinary results — you just need to stay in the game.
There’s a great story from a Berkshire Hathaway meeting. Someone once asked Charlie Munger:
“Are you and Warren successful because you’re smarter than everyone else?”
And Munger, always blunt, replied: “It’s not that we’re so smart. We’re just less stupid.”
That’s the trick.
Know the kind of game you’re playing before you start playing it. Investing isn’t about having the best serve or flashiest shot. It’s about staying in the match. Owning your financial future. Avoiding the big mistakes. Letting time and compounding do the rest.
