A funny thing happened the day after Christmas at the Toyota Center in Houston. An unknown rookie basketball player by the name of Chinanu Onuaku stepped up to the free throw line and threw the ball underarm, or “granny style”, towards the hoop. The crowd gasped and then erupted as he scored the point.
Now, I’m less than five foot six, with no hand-to-eye co-ordination, and a very rudimentary knowledge of basketball. But I’m reliably informed there is academic evidence that throwing the ball underarm gives the thrower the best possible chance of making a free throw. Until now, though, it hasn’t been seen in an NBA game since retirement of granny-style pioneer Rick Barry in 1980.
So, why did no professional basketball player until now try to replicate Barry’s success by perfecting the technique that is proven to deliver the best results? According to Adam Kilgore in the Washington Post, “players uniformly resisted it, afraid of looking foolish, standing out as childish or unmanly”. Wilt Chamberlin, who briefly flirted with underarm free throws in the early 1960s, apparently reverted to the conventional style because he “felt like a sissy”.
There’s a very similar phenomenon to this in football (sorry, soccer, for readers across the pond). Ten years ago, Ofer H. Azar, an economist at Ben-Gurion University of Negev in Israel, conducted an experiment involving professional goalkeepers. What he wanted to find out was how they dealt with a high-stakes decision, namely what to do at a penalty kick, and whether it helped to explain the behaviour of investors faced with making similarly big decisions under pressure.
Azar’s research team analysed more than 300 kicks and concluded that the action that was most likely to prevent a goal being scored was, perhaps surprisingly, to stand in the middle of the goal and do nothing until the trajectory of the ball can be seen. This resulted in a success rate of one in three — far higher than the average.
But goalkeepers very rarely do that. Instead, they typically try to guess which way the ball is going to go before the player’s foot has actually made contact with it, diving left or right, to try to be in the right spot when the ball arrives. The researchers found that diving left resulted in success 14% of the time, and diving right only 12.6%.
Crucially, when they asked why the goalkeepers who took part in the experiment why they didn’t just stand and wait more often, it emerged that the overriding reason was the fear of what others would think of them. In particular, they didn’t want to give the impression to the crowd or their team-mates that they weren’t trying or taking the situation sufficiently seriously.
What fascinates me is how analogous these two examples from the sporting world are to the response that many people have to evidence-based investing. It doesn’t matter how many times you tell them that this is a good way to invest or that is a bad way; some people will always act irrationally.
Humans are very much social animals. We pay huge attention to what others are doing, and to how other people perceive us. As a result, we’re often scared to do the opposite, even though we know, on a rational level, that’s just what we should be doing.
No, buy-and-hold indexing isn’t cool, it isn’t macho and it won’t make you the most interesting guest at a dinner party. But the evidence overwhelmingly tells us it’s the best way to invest.
Go on, be a sissy. And, as William Bernstein would say, “Let them laugh. The joke’s on them.”
Thank you, Tadas Viskanta, for drawing my attention to Chinanu Onuaku’s granny-style free throws. Your blog is a mine of fascinating information.
ROBIN POWELL is a freelance journalist and the founding editor of The Evidence-Based Investor. Based in Birmingham, England, he founded Ember Television and Regis Media, and he specialties in helping disruptive financial firms to grow. He also campaigns for a fair, transparent and sustainable investing industry. You can follow him on Twitter at @RobinJPowell.