2020 has been a bad year for a lot of industries, but not golf. Interest in one of the few naturally socially distant sports is up. And a couple golf stocks are on the rise too.
This year has been turned upside down in many ways. That includes the sport of golf.
In recent years, golf has seen its active player numbers steadily decline as baby boomers age and youngsters eschew this traditional country club sport.
Who would have thought that its popularity would surge during a pandemic?
Golf rounds played in America surged 25% in September, according to industry research firm Golf Datatech. And so far in 2020, rounds played are up almost 9% as golf is the rare sport that can be played while maintaining social distancing.
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Operating revenue increased over 70%.
Gross profit surged 122%.
Net income was up over 60%.
Golf Stocks on the Rise
Golf stocks such as Callaway Golf (ELY) bounced backed from the COVID-19 pandemic in the third quarter, posting strong sales and profits well ahead of last year as golfers with cabin fever escaped to golf courses across the globe.
One area of growth are golf club and ball sales, said Callaway Chief Executive Chip Brewer, while the company’s apparel brands remained “resilient” in the wake of the economic downturn.
“The golf business is experiencing unprecedented growth and is in a position of strength, and our brands are very strong,” said Brewer in a conference call with Wall Street analysts. For its third quarter, Callaway reported a sales increase of nearly 12%, to $476 million, with profits soaring 69% from last year.
Acushnet Holdings (GOLF), which owns Titleist and FootJoy, is another golf stock that indicated a big turnaround, and CEO David Maher recently told analysts that “the game and business of golf have been incredibly resilient over the past few months.” The company said that demand for golf balls had been particularly strong, indicating a pickup in rounds played.
While the pandemic reversed a decline in golf, it also upended the professional calendar for golf events. In particular, the Masters golf championship, normally held in April, instead took place last week without any spectators (or patrons, in Masters lexicon).
My blood always pumps faster during the week of the Masters golf tournament. I’ve been lucky to attend the tournament three times, which is akin to a pilgrimage for avid golfers and sports nuts like me. What makes it so special?
From the entrance through Magnolia Lane through the closing ceremony as the sun fades on Sunday evening, it is picture perfect in all respects. Rich in beauty and steeped in tradition, it also sports the most international and elite field in golf.
These are just some of the many aspects of the Masters that I love.
For investors, Masters week normally triggers the dreaded tax deadline and, hopefully, a fresh look at their portfolios and investment strategies.
When I was an investment advisor with a Wall Street firm, one of my marketing strategies was to make the rounds at country clubs to give luncheon talks to prospective clients.
The topic was, “The Traits Shared by Great Golfers and Great Investors.”
It is remarkable how many of the traits of world-class golfers can be applied to making all of us more successful investors. Here are some the highlights of my talk that might help you as we move into 2021.
6 Tips for Being a Successful Investor and Golfer
Get organized with a smart, conservative strategy and realistic goals
This is very important. To get ahead, you must get organized. Great golfers always have a strategy in mind for every hole before they begin. They carefully chart a course and set specific targets that can be adjusted for different weather conditions. Unfortunately, amateurs (dare I say hackers) give little thought to strategy and usually have no plan at all.
Keep your head when things get rough
The roguish, stylish and flamboyant Walter Hagen usually arrived on the first tee in black tie and always expected to hit three or four poor shots a round. This relaxed attitude led to him staying calm when the inevitable shot went astray. Remember, golf and investing are not games of perfection. When stock picks go south, cut your losses and get back into the game.
Be deliberate, patient, and play the probabilities
In golf and investing, patience and consistency is the magic formula. Having one great round or a few good stock picks in a row will not lead to success. The greatest golfer of all time, Jack Nicklaus, always played the percentages to keep his ball in play.
Proper preparation prevents poor performance
Professionals – in golf and investing – prepare carefully and follow a set and steady routine. Investors would do well to carefully emulate the pros. Don’t jump at every stock pick that comes your way. Do your research, find and stick with a proven investment strategy that suits your personality, time frame and financial goals.
Build a talented team
If you go to the Masters or any other professional tournament, you will notice that a pro does not go it alone. Most have swing coaches, sports psychologists, sports agents, financial consultants and of course professional caddies to help them play at their peak potential. The same goes for investors. Get a good CPA and lawyer, plus some talented investment help from trusted and independent sources like Cabot Wealth.
Look overseas for value and growth opportunities
Golf has always been an international game, and no tournament is more international than the Masters. Of the 92 contestants in last week’s tournament, 49 were international, hailing from countries such as China, Spain, France, Australia, Mexico, Thailand, Malaysia, Argentina, Columbia, Fiji, India, South Korea and South Africa. Are you equally open to scouring the globe to find companies trading at value prices all over the world?
Remember, investing, like golf, is not a game of perfection. Having the right mindset, strategy and preparation simply increases the probabilities of success.
Good luck with your golf and your investing!