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  Very few people on this planet have earned the title of "greatest ever." In investing, many would argue that this distinction goes to Warren Buffett; in golf, it's Tiger Woods. But in this world you do not need to be the best to achieve success. However, we are fortunate that those who are considered the best have laid out lessons for us that can help us become more successful. (Read about Buffett in our articles on The Greatest Investors.)

Both Warren Buffett and Tiger Woods do a few simple things spectacularly well to achieve their goals. While odds are quite high that you will never become Woods or Buffett, you don't have to in order to succeed. There are a lot of subtle yet critical similarities between golf and investing. If you pay attention to how they go about perfecting their craft, you can gain a lot of wisdom that will set you ahead of the pack.

  Practice Makes Perfect

  How Tiger Woods practices may be one of the most intriguing activities in all of sports. People are often advised that "practice makes perfect." In other words, continue to practice, practice, practice, and you will get better. While there's no doubt that practice very often leads to improvement, it's not practice that sets Woods apart; it's perfect practice.

When Woods is on the driving range hitting balls, he is not just hitting balls for the sake of it. Instead, he hits every single ball with a specific target in mind. Woods will hit 500 balls a day with a specific target for each one.

The parallel for investors is constant discipline. Many investors incorrectly invest just for the sake of investing - without any discipline or specific target in mind. As a result, new investors have no idea how to navigate the course or manage risk. Investors often buy most of their stocks with the same expectations - that the stock price will go up - without giving any consideration to the existing competition, the quality of management and the level of difficulty of the current market layout. (Part of the problem for many investors is determining the exit point. See To Sell Or Not To Sell to learn more about this.)

  What It Takes to Win

  When the course is easy - in a bull market - every shot you take looks like a good one. It doesn't seem to matter what price you pay, the favorable landscape makes you look like an expert. However, the real danger lies in the fact that the longer this persist the greater the likelihood that you begin confusing your investment acumen with what is really going on: favorable conditions. This happened during the internet boom in the 1990's and the majority of people never had a chance to cash in on their spectacular gains. In fact, many actually lost lots of money when things came crashing down. (Learn more about the dot com bubble in our series on Market Crashes.)

When the investing layout is hard, as it is during bear markets and recessions, it's crucial to understand shooting par could likely be the long-term winner. As stock prices begin to rapidly rise, they often become riskier propositions, but most investors naively do not see it that way and continue to buy. Then when the course gets hard, the wrong lessons they learned on the easy course cost them dearly.

  Invest with Purpose

  Like Woods, investors should always invest with a specific target in mind. When stock prices rise dramatically without any regard for valuation, ignore the fact that some people may make superior returns over the next several months or year. Very often, the majority of those folks won't have the faintest idea when the goods times will end and all those profits will vanish.

Always invest with a specific target in mind. Be cautious when everyone is excited about buying stocks because that usually means paying a very rich price. Consider bonds, or high quality dividend paying stocks that usually don't attract as much excitement as the Amazons or Googles of the world. Sometimes shooting even par often produces the winning score. (For a primer on bonds, see our Bond Basics Tutorial.)

  Manage Your Expectations

  There's a saying that goes "in order to finish first, you must first finish." There is tremendous wisdom in those words for investors. Success in investing is very often highly correlated to longevity. If you can navigate the market storms and not suffer catastrophic losses, then you are able to capitalize on the opportunities available when stocks prices are discounted. As is so often the case, many investment's funds go out of businesses when the markets collapse, which is the absolute worst time to exit the game.

Tiger Woods does a brilliant job of managing his expectations. He doesn't go out on Thursday focusing on the leader board and trying to come out on top that day. Instead he plays his game against the course, fully aware that it is the person who remains consistent during the tournament who usually comes into Sunday's round with the best chance to take home the trophy. Of course, during the course of play, Woods, like many investors, will often weigh the risk rewards of a difficult or low probability shot and make his decision based on the benefit gained.

  Learn from the Best

  Long-term success is not a result of luck. However, discipline and hard work often leads to opportunities that might not otherwise appear, and to outsiders this is often viewed as simple luck. Examine the approach of guys like Tiger Woods and Warren Buffett, learn from their successes and failures and you've already got a head start.
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