Real Estate Investing Lessons from Sachin Tendulkar’s Test Cricket Stats

A note to real estate investors.
Test cricket is my favourite sport to watch. It’s the only sport where choosing to do nothing on a regular basis is critical to your success.

Take a look at the Test batting statistics of one of the greats of the modern game, Sachin Tendulkar. Three things jump out:

1. Of the total number of balls faced, Tendulkar didn’t score from almost 60% of them.
2. Tendulkar scored more than half his runs from boundaries, even though these accounted for only 7% of all the deliveries he faced.
3. Tendulkar made a costly error (dismissal) approximately once every 100 balls faced.

Dot balls are the business equivalent of deals you choose not to examine in any detail. At EG, of all the deals we examine, we let about 60% “through to the keeper” – thus conserving our energies for better deals.

Striking boundaries is the business equivalent of a great deal. At EG, we gun for about 15% of the deals that come across our table and typically win about 50%. In other words, we strike a boundary on about 7.5% of the deals we look at.

Dismissals are the business equivalent of doing a bad deal, that is a deal where you lose some or all of your capital. To become the Tendulkar of investment, you have to keep dud deals to a minimum: ideally, not more than 1 in 100 deals examined. Knock on wood, so far EG has lost money on one in every 400 deals examined.
So the next time you’re taunted for watching too much test cricket, tell them you’re merely reinforcing your knowledge of the statistical
laws of investment.