This article, by Justin Baiocchi, was originally published in The Northern Daily Leader on 21 November 2015.
As a schoolboy I always liked to think that my dad was a little special when compared to my friends’ fathers, mainly because of his job. For over forty years he was a touring golf professional; a varied and interesting career which took him to golf tournaments and courses all over the world. Of course, some of my friends may have wondered if I even had a father, so frequent were his absences – the downside of a career where your workplace might be St Andrews golf course in Scotland one week, and Augusta golf club in Georgia the following week.
During school holidays I was allowed to caddy for my dad during whichever golf tournaments happened to coincide with the holiday. This was always a lot of fun, particularly if dad was playing well at the time. It was during these holidays spent caddying, however, that I discovered the real nature of the relationship between a professional golfer and their caddy. You had to listen carefully, but you could most easily detect it in a post-round interview. The golfer might say something like “…I hit a great approach shot on the 15th, but we misread the green and we couldn’t make the birdie putt.” Or he might say “…I hit a perfect tee shot on 16, but we still made a bogey unfortunately”. Can you see it? When it’s a good shot, great shot or birdie, it’s always “I”. A bad shot, duff shot or bogey and it’s always “we”.
The tendency for a professional golfer to blame their caddy when things go wrong has a name: self-serving bias. When things work out, I did it. When things go wrong, it must have been someone else’s fault. And as with most biases, what affects us in our personal life affects us when it comes to investment decisions too. A share investment which goes up is due to my great judgement; a share which falls is because of dumb decisions by management, for example. The problem with self-serving bias, as with many behavioural biases, is that it prevents us from learning from our mistakes and improving our future decision-making. How can you learn from your mistakes it you’re so certain you never make one? The key to avoiding self-serving bias is to value failure, own up to it when it happens and give others credit where it’s due. Or if you happen to be a golf professional, just employ a caddy who’ll tell mum if you blame him for anything. Making a nice smooth swing on the first tee can be difficult after a night spent sleeping on the sofa.