What investors can learn from Rahul Dravid

More than any other cricketer, Rahul Dravid’s career has plenty of lessons for the rest of us regarding the power of mental conditioning and psychological training techniques.

“By any meaningful reckoning…he was India’s greatest match-winning batsman, with 24 away wins (Sachin Tendulkar has 20) where he averaged nearly 70. When imponderables are introduced into the equation, with such things as the ability to absorb pressure and match impact, he is the greatest series-defining batsman in the history of Test cricket, his count of eight series-defining performances greater than anybody else’s.” – Suresh Menon in ‘Rahul Dravid - Timeless Steel: Collected Writings on Indian Cricket’s Go-to Man’ (2012)

Rahul Dravid’s performance statistics show that he is the greatest Test batsman India has ever had. And yet, if you ask sportswriters and other cricketers of Dravid’s era as to why he was successful, the consensus view was that “Dravid succeeds because he keeps it simple”. So, if it is so easy to succeed by keeping it simple, why don’t more cricketers do it? Why is ‘simple’ not easy?

At the core of outsized success in any walk of life – including batting and investing – lies the ability of a small number of individuals to train their minds to achieve outcomes which appear to be beyond the reach of 99.99% of the population. While what these individuals do might be simple, that does not mean it is easy. There are, broadly speaking, five sets of reasons why it is not easy to bat like Rahul Dravid.

Firstly, Dravid’s training and his basic mental conditioning started when he was around eight years old. That’s when his coach, Keki Tarapore, started teaching him the importance of playing with a straight bat and the central role of relentless practice in attaining a high level of skill. Long before, Malcolm Gladwell wrote about his famous ‘10,000 hours of practice’ principle in ‘Outliers’ (2008), thousands of Indian coaches like Keki Tarapore (for Dravid), Ramakant Achrekar (for Sachin Tendulkar) and Desh Azad (for Kapil Dev) trained their wards to follow this principle. As Fazal Khaleel, Dravid’s team mate from his school cricket team, who also played Ranji Trophy cricket with him, recollects: “He paid attention to detail, especially the basics. If his form was not good he would go back to shadow-practice – to the hanging ball. When correcting our basics, our coach, Keki Tarapore, would tell us that if the bat did not come down straight, the ball would travel at an angle. Rahul never forgot the instruction. Interestingly, he never made any changes to his basic cricket or in his approach to the game. Right from his school days, he has played the same way. Playing in the V came naturally to him and he never altered it.” (Source: Fazal Khaleel was interviewed by Nagraj Gollapudi of ESPNcricinfo and the interview appeared in ‘Rahul Dravid Timeless Steel: Collected Writings on Indian Cricket’s Go-to Man’)

Whilst many schoolboys growing up in India’s big metros might have access to such coaching and batting facilities, where Dravid really pulled away from his peers was in his appetite for practice. John Wright, who coached the Indian cricket team from 2000-05, was the first to tell the world how seriously took net practice: “I have never seen a more dedicated cricketer than Rahul in the nets. He was able to simulate a game situation, not just by going through the motions but by making every ball count. It was like he didn’t want to get out even in the nets. In a situation when we had three or four bowlers going at him, he wanted to compete. He was always testing himself…” (Source: John Wright, India’s coach between 2000-05 speaking to Sharda Ugra of ESPNcricinfo in ‘Rahul Dravid Timeless Steel: Collected Writings on Indian Cricket’s Go-to Man”)

Not only was Rahul practicing in the nets, mentally he was practicing shots in his everywhere and all the time. His wife, Vijeta, discovered this fact shortly after they got married: ““When I went to Melbourne and Sydney [in January 2004]….I was still trying to get to know him, know his game. It was only then I began to notice how he would prepare: his routines, his obsession with shadow practice at all hours of the day, which I first found very weird…” (Source: Article published in ESPNcricinfo on March 12, 2012)

In addition, to these strengths, Rahul Dravid was one of the first Test cricketers to start using set routines and mental conditioning techniques to improve his game. Dravid started practicing these routines, when he was a schoolboy cricketer. As Fazal Khaleel, Dravid’s team mate from school and Ranji cricket says: “As a room-mate, Rahul was difficult as well as easy to share with. He wanted a zen-like atmosphere in the room – everything peaceful and calm. He was quiet and meditative, would not watch TV much; he read books instead….He had his set routines and rituals, even in those days. He would do breathing exercises and clean his nostrils using the ancient practice of Jalneti.”

As the years went by and as Dravid rose up the cricketing pantheon, his mental conditioning techniques were perfected to a high level of proficiency. Vijeta, Rahul Dravid’s wife recollects, that around 2006-07: “When we began to travel with the kids…we made sure we got two rooms, next to each other. The day before every match, the boys were told that their father had to be left alone for a while, and he was. He would go into his room and meditate or maybe to do a few visualisation exercises. On the morning of the game he would get up and do another session of meditation before leaving for the ground. I have tried meditation myself and I know that the zone Rahul is able to get into as quickly as he does takes a lot of years of training to reach.” (Source: Article published in ESPNcricinfo on March 12, 2012)

The sum total of everything we have discussed so far allows you to visualise not just a supremely skilful cricketer but also one whose mental conditioning has given him enormous reserves of mental strength. Dravid himself pulled the entire construct together in an interview he did for Cricinfo editor, Sambit Bal, in 2004: “I try to have as many nets as possible in the last couple of days before the match. When I feel comfortable with my game, I stop. Then I start thinking about the match. I look at the wicket. I try to analyse the kind of bowlers I will be playing, their strengths and weaknesses. I replay in my mind the memories of my last encounter with them. I look at videos if they’re available. If a bowler got me out last time, I try to think about how I got out, what mistake I committed.
And I do my best to be in a relaxed state of mind, because that’s when I play at my desk. I try to slow things down a couple of days before the game. I have long lunches, do things in an unhurried way. The morning of the match, I always get up a couple of hours before we have to get to the ground, so that I have plenty of time to get ready. I take my time to have a bath, wear my clothes, eat breakfast. I never rush things...” (Source: Sambit Bal’s interview with Rahul Dravid first published in Wisden Asia Cricket Magazine (2004))

In addition, as his career progressed, David sought feedback from peers and introspected on his to understand his weaknesses. Then he figured out technical solutions to these weaknesses using his cricketing intelligence and then spent hundreds of hours at the nets fixing these issues. Finally, he implemented these technical fixes in live cricket matches against high quality opposition. John Wright, the coach of Indian team from 2000-05, noted this before most other people: “He never made the same mistake twice. He learnt hugely in one-day cricket – which probably was an area he had to work at a little bit more than others. He had been dropped from the Indian one-day team and then went on to come back and have a very good World Cup [in 2003]….He had all the shots but he worked hard at turning the strike over, getting the singles, and dropping the ball on the on side, when you normally might put it on the off side. At the start people would try to slow him down, but then he worked out a way so they couldn’t do that.” (Source: John Wright speaking to Sharda Ugra of ESPNcricinfo in ‘Rahul Dravid Timeless Steel: Collected Writings on Indian Cricket’s Go-to Man’)

In the published material that is available on Rahul Dravid, this case study – of how Dravid sorted out his one-day cricket batting – is covered in some detail. This ability - to understand and acknowledge ones weaknesses, then to figure out a solution and finally to have the mental strength required to implement the fix in front of a global audience – is very rare. It is unlikely that this suite of characteristics can be coached into a person; you need the said individual to have the curiosity and the mindset to grow in this fashion. Dravid had that growth mindset from an early age.

Greg Chappell, who was India’s coach for much of Dravid’s tenure as captain of the Indian team from 2005-07, said, “Rahul is an avid reader, who reads in the search of knowledge with which to improve himself. He is a like a child in that he constantly asks questions and then asks why when you give him an answer...In that way, he was eminently coachable. He could take concepts and turn them into action because of his intelligence and a strong belief in his ability.” (Source: Greg Chappell writing in ‘Rahul Dravid Timeless Steel: Collected Writings on Indian Cricket’s Go-to Man’)

Dravid’s wife, Vijeta, says that even if he had a bad on the cricket field, his growth mindset would help him bounce back: “At the end of the day’s play, he may be thinking about it, his batting may bother him…but at that point he can compartmentalise his life very well. He won’t order room service or brood indoors. He would rather go out, find something to do: go to a movie or watch musicals – which he loves. He will walk out to the sea or go to the bookstores.” (Source: Article published in ESPNcricinfo on March 12, 2012)

As in Test cricket, so in investing, the most successful investors are those who not only work on their technical skillset but also think deeply about the underlying workings of great companies. Such investors are then able to see the companies in a way that nobody else can; in specific these investors are able to gain insights into the functioning of these companies that no one else has. Furthermore, by introspecting and by reviewing their previous investment decisions, such investors are able to identify deficiencies in their investment toolset. Then, Dravid-like these investors proceed to identify remedies to their deficiencies. The greatest investors, like the greatest Test cricketers, are a combination of strong technical skills combined with a growth mindset.

Saurabh Mukherjea is part of the Investments team at Marcellus Investment Managers (www.marcellus.in) and is the author of “Coffee Can Investing: the Low Risk Route to Stupendous Wealth” and “The Victory Project: Six Steps to Peak Potential”.

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Jan 20 · 3 Min Read

AI and the Phantom Worker: The Story That They Never Told You

The popular idea that Artificial Intelligence (AI) and robotization leads to unemployment is simply not supported by data. Data for the last 10-20 years shows a different trend altogether – human development, skilling, and education are the key determinants of low unemployment rates. Moreover, the anecdotal evidence increasingly suggests that new technology creates, rather than destroys, jobs.

Over the last 5 years, there has been endless talk about how machines and AI will continue to kill jobs thus increasing unemployment. Prominent newspapers often publish articles to this effect. One particular survey from 2013 by Benedikt Frey & Michael Osborne stated that “47% of workers in America had jobs at high risk of potential automation. In particular, they warned that most workers in transport and logistics (such as taxi and delivery drivers) and office support (such as receptionists and security guards) “are likely to be substituted by computer capital.” (Source: The Economist, June 23, 2016).

The most famous alarm bell ringer on AI is Martin Ford, a futurist, and an entrepreneur. In his book ‘Rise of the Robots: Technology and the Threat of a Jobless Future’ (2015), Ford paints a very grim picture of the situation, with statements like “what if robots can do anything humans can do? Would there then be long-term technological unemployment?” (Source: The Economist, October 20, 2010) and “middle-class jobs will vanish, economic mobility will cease and a wealthy plutocracy could ‘shut itself away in gated communities or in elite cities, perhaps guarded by autonomous military robots and drones’. The unemployed masses will subsist on a universal basic income.” (Source: The Economist, June 27, 2019).

Interestingly, anecdotes and alarmist quotes aside, there is very little data to substantiate these claims. In fact, according to Maximiliano Dvorkin, the number of non-routine cognitive jobs has increased steeply in the last 30 years, whereas the number of routine manual jobs remain more or less flat (source: The Federal Bank of St. Louis, January 4, 2016). Critics of the AI doomsday prophets often point to Amazon as an example of automation leading to creation, rather than destruction, of jobs. The Seattle Times had reported “The world’s largest e-commerce retailer said it has 45,000 robots in some 20 fulfilment centers. But most importantly, Amazon also reported a 12 months 46 percent increase in the number of staff.” (Source: The Seattle Times, December 29, 2016).

The Amazon experience is not an isolated example. In the world of accountancy, despite significant advancements in software (both in terms of specialized accounting software and in terms of widespread availability of spreadsheets), the number of Chartered Accountants has risen in most countries. According to the Association of International Certified Professional Accountants (AICPA), their enrolment figures swelled on an average per annum by 1.4% from 1995-96 to 2015-16. Furthermore, in the home of accounting software, the US, the number of new hires by CPA (Certified Professional Accountants) firms rose by about and average of  3% per annum from 1996 to 2016 (source: AICPA Demand and Supply report, 2017). Another more prosaic example of automation being accompanied by rising, rather than falling, employment is the Bombay Stock Exchange (BSE). The total number of employees of the BSE rose by about 1% on an average per annum between 2013-14 and 2019-20.

If the evidence that automation leads to job losses is ambiguous at best, and non-existent at worst, then:

1) What explains the rising concern regarding unemployment in both the developing and developed world? And,

2) What can be done to improve and enhance the job creation engines which drive economies across the world?

Looking at the time-series data for four major Advanced Economies (AE) of the world (Exhibit 1), unemployment as a % of the total workforce (hereon unemployment rate) has declined, especially in the last 4-5 years. In fact, barring the fallout of the Global Financial Crisis, unemployment rate has been stable over the last 20 years in these economies.



More generally, the picture for the OECD countries is very similar – over the last 20 years, there has been no discernible upward trend in the unemployment rate. In fact, for those who fear that the falling labour force participation trend in the developed world over the past decade is the real driver of this optical drop in the unemployment rate, the ‘breaking news’ is that if you take the last three decades of data in one chart, it is hard to see any discernible trend – either upwards or downwards - in the unemployment rate in the developed economies.



If we look at the prominent Emerging Markets, barring Brazil, there does not seem to be any structural shift in the unemployment rate either upwards or downwards over the last 20 years.



To understand why there is so much talk on unemployment, we need to look at skilling and education, more precisely the links between skilful education, human development, and unemployment. To this effect we have analysed PISA scores (The OECD Programme for International Student Assessment examines what students, aged 15, know in reading, mathematics, and science (source: OECD website), HDI (the Human Development Index data gathered by the United Nations Development Programme), and unemployment rates. The PISA data and HDI data and the corresponding unemployment data has been taken for the year 2018. A relatively new index, the Global Index of Economic Mentality (GIEM) (source: Atlas Network, 2020) developed by Carlos Newland, Pal Czegledi, and Brad Lips measures economic freedom with respect to minimal government intervention and maximum private initiative, personal responsibility, and free competition.



The results of our analysis, shown in Exhibit 4, highlight three key results:

Better levels of education (as measured by the PISA scores), better levels of human development (as measured by the HDI), and better levels of economic freedom (as measured by the GIEM), are correlated with significantly lower levels of unemployment. This finding is especially true for OECD countries, but it also applies to the developing countries.
These findings hold true regardless of the size of the countries (measured in terms of the population).
Putting all the three factors (PISA scores, HDI, and GIEM) together, it turns out that unemployment on an average reduces when these factors improve, in almost all countries. The result is starker and stronger for the AE’s and developed countries which could be possibly due to the better starting points these countries have had vis a vis the EM’s and developing countries.

Delving deeper into the EM’s and the developing countries, we look at HDI and unemployment rates in Bangladesh, Vietnam, and India. Interestingly, all three countries have shown improvement in HDI over the last 20 years and at broadly the same rate.





Exhibits 5 and 6 point out the trends that HDI growth and unemployment rates follow in these 3 countries – as HDI increases in all 3 countries, unemployment rates stay level or even reduce. This is also reflected in the 10-year Compound Annual Growth Rate (CAGR) for HDI (0.04%, 0.06%, 0.08%) and unemployment rates (-0.30%, -0.17%, -0.21%) for Vietnam, India, and Bangladesh, respectively.

This is true for AE’s and developed countries as well. We saw in Exhibits 1 & 2 that unemployment in the developed countries has been stable for the past two decades. Looking at the data for US, Germany, and Japan we find that not only have their unemployment rates fallen (10-year CAGR of -1.45%, -10.08%, -5.21% respectively), this has been backed up by steady improvement in HDI scores (10-year CAGR of 0.40%, 0.97%, 0.78% respectively).



Logically, this makes sense. According to a widely quoted report from James Bessen and his colleagues in a Brookings Institute report: “rising automation represents an increase in a challenge that society already faces, not a challenge of an entirely new sort” and that “evidence suggests that there is a role for governments to facilitate these transitions following automation episodes” (source: Brookings, January 2020). In that sense, the role of the government is no different to what it was in the preceding century.

In fact, the rise of automation in the context of the gig economy seems to be fostering employment, rather than unemployment, in EM’s like India, Vietnam and Bangladesh. For example, the rise of cab rental services like Uber and Ola may have put some traditional taxi drivers out of business but has substantially increased the number of contractual drivers working for these services. There were around 63,000 black & yellow taxicabs running on the streets of Mumbai approximately 20 years ago. In 2018, that number had fallen to 18,000. However, the number of Uber and Ola cabs in 2018 was around 75,000, raising the total number of cabs on the streets to 93,000, implying an average annual growth rate of ~2% (source: Indiatimes.com, April 1, 2019).

Much like the point we made in our preceding piece about de-globalization being fake news (click here for our preceding piece), it appears that the fears created around AI and mechanization are of a similar sort. As Joel Mokyr, and economic historian at the Northwestern University put it “Imagine trying to tell someone a century ago that her great-grandchildren would be video-game designers or cybersecurity specialists. These are jobs that nobody in the past would have predicted” (source: The Centre for Innovation Studies, May 29, 2017). New technologies and advancements will bring new types of employment opportunities – the key is to be able and skilled enough to grab those opportunities.

Mark Mobius is the Founder of Mobius Capital Partners LLP. Saurabh Mukherjea and Nandita Rajhansa are part of the Investments team at Marcellus Investment Managers.

Sources for Exhibit 4

https://www.oecd.org/about/document/list-oecd-member-countries.htm

https://data.worldbank.org/indicator/SP.POP.TOTL?end=2018&start=1960

https://data.worldbank.org/indicator/NY.GDP.PCAP.KD

http://hdr.undp.org/en/data

https://factsmaps.com/pisa-2018-worldwide-ranking-average-score-of-mathematics-science-reading/

https://www.atlasnetwork.org/assets/uploads/misc/GIEMREVISED4.pdf

Dec 23