Full episode description:
Sports and investing can both be shaped by small margins, repeated decisions and the balance between skill and chance. From tennis points to soccer matches and basketball shot selection, elite competition offers a useful lens for thinking about decision-making in capital markets.
In this episode of The Bid, host Oscar Pulido speaks with Ronald Van Loon, Portfolio Manager in BlackRock’s Global Fixed Income Group, about the connection between sports and investing. They examine hit rates, payoff ratios, teamwork, preparation and the role of process in fixed income portfolio management.
The discussion explores why a modest edge can matter when applied consistently, how different sports change the influence of chance, and why sports and investing both reward attention to probability, payoff and repeated opportunities. They also consider market volatility, stock market trends and the importance of continuous learning.
Key insights:
• How small statistical advantages can compound across repeated decisions.
• Why probability and payoff need to be considered together.
• Where skill and chance differ across tennis, soccer and basketball.
• How teamwork can support decision-making across complex fixed income markets.
• Why preparation and continuous learning remain central to a repeatable investment process.
• How basketball’s changing shot selection illustrates the concept of expected value.
Keywords: sports and investing, capital markets, fixed income, portfolio management, investment process, market volatility, stock market trends
Sources: Van Loon, R.J.M. 2021. 'Long-Term Investing and the Frequency of Investment Decisions', The Journal of Portfolio Management 47 (8): 86-104; Van Loon, R.J.M. 2021. 'Investment Skill and Consistent Long-Term Alpha', The Journal of Portfolio Management
This content is for informational purposes only and is not an offer or a solicitation. Reliance upon information in this material is at the sole discretion of the listener. Reference to any company or investment strategy mentioned is for illustrative purposes only and not investment advice. In the UK and non-European Economic Area countries, this is authorized and regulated by the Financial Conduct Authority. In the European Economic Area, this is authorized and regulated by the Netherlands Authority for the Financial Markets. For full disclosures, visit blackrock.com/corporate/compliance/bid-disclosures.
Oscar Pulido: The summer of 2026 has been one that's been dominated by sport. From the World Cup to tennis Grand Slams and basketball championships, we've watched some of the world's best athletes and teams compete at the highest level. But behind the headline wins are often remarkably small margins, a handful of decisive points, a slight statistical edge, or a strategy executed more consistently than the competition.
And there may be a lesson there for investors because successful investing isn't necessarily about getting every decision right. It can be about understanding where you have an edge, knowing which decisions matter most, and applying that skill consistently over time.
Welcome to The Bid, where we break down what's happening in the markets and explore the forces changing the economy and finance. I'm Oscar Pulido.
Today I'm joined by Ronald Van Loon, a portfolio manager in the Global Fixed Income Group at BlackRock. When we last spoke, we explored what tennis could teach us about investing and why even the greatest players in the world win only slightly more than half the points they play. Today we're widening the lens from World Cup soccer to Grand Slam tennis and basketball. What can this summer of sport teach us about skill, probability, teamwork and ultimately successful investing?
Well, Ronald, thank you for rejoining us on The Bid. Last time we spoke was a couple years ago, and we talked about this interesting intersection between the sport of tennis and investing. And we talked about the surprising idea that some of the greatest tennis players in history win only around fifty-four percent of the points that they play. In fact, we referred to an infamous commencement speech that Roger Federer made where he made this exact point.
Now, you've continued your research since then, and before we widen this out to other sports, remind us why that relatively small edge can produce such dominant results over time.
Ronald Van Loon: I think tennis is a great analogy to the world of investing. So, if you take Federer as an example, over the full length of his tennis career, he won, more than eighty percent of the matches that he ever played. But then, as he famously said, if you look at it per point, he only won around fifty-four percent of the points he ever played, which is really low, only marginally above a coin toss, and that's really surprising.
Now, that's nothing to do with Roger Federer, that's really in the game of tennis. If you look at all the greats, whether it's men's or women's tennis, you get those same statistics coming back time and time again. So, even today, if I think about, Sinner and Alcaraz, the two, the big players in men's tennis, they have very similar numbers about per point success rate of just north of fifty-four percent. But of course, the pair of them have won ten out of the twelve Grand Slam tournaments over the last three years. And the reason for that really is in tennis, you have, lots of opportunities to score. You have a tournament, several matches. A match is made up of sets, a set is made up of games, a game is made up of points. Each of these is an opportunity to express a difference in skill. And then once you start adding these kind of measurement points together, you-- it starts compounding up, and you end up with a very high probability of winning the match, like in Federer's case, eighty percent.
Now, in investing, we have a similar dynamic. I'm a portfolio manager; we make many investment decisions continuously. Buy sell, hold, the timing, sizing decisions. They make these decisions all the time. And of course, after the fact, you can look back and see has this been a successful decision or not, and start doing the same analysis, like we just did on the tennis match, and you come up with some remarkable similarities. For example, we worked out, what percentage of the total investment decisions do you need to get right in order to get outperformance? And the actual percentage there is fifty-three percent. That's remarkably similar to tennis. You have that same effect of a fairly low amount of skill per decision, but as you compound them over many different decisions, it starts compounding up into durable success.
Oscar Pulido: Right. There's this remarkable, commonality between tennis and the world of investing that you've helped uncover. And while we had focused on Roger Federer in the last discussion, you're saying that there are other premier tennis players who have this phenomenon of winning just over half of their points but yet being very dominant in terms of the end results.
As I mentioned, you've continued some of your research since the last time we spoke, and your latest research goes a step further and looks at not just how often investors get decisions right, but what happens when they do. And you talk about this concept of winning the big points. Maybe elaborate a little bit more on what you mean by that.
Ronald Van Loon: Yeah, of course, in sports, like all sports, you have these crucial episodes, the real pivotal moments, like in tennis, the break points, the set points, and so forth, when perhaps you see somewhat of a difference. And in tennis, you can really see, winning the big points it brings you that extra level of success.
And in investing, there are certainly similarities. In tennis, for example, if you look at it, Federer or all the big players, and just isolate on those kind of pivotal moments, the break points, the set points, then all of a sudden, you see those conversion percentages creep up to low 60%, but it's still not super high but it's definitely a difference. So, you see the real difference between the absolute top players and the other really good players in terms of winning those big points. And in investing, we did the same kind of analysis. We looked at what drives really the outcome of the investment process in terms of success.
Is it about having more success in each individual decision, making more successful investment decisions? Or is it around converting whenever you're successful into a better payout profile? And then, of course, in investing, it's the same as in tennis. Those two things need to be looked at in conjunction. So, you really need to think about these two things together. So, there's no point in investing and focusing only on your hit rate or only on your payoff ratio. You really need to look at them together and jointly. And the other thing is, both play a role, and both can be actually fairly small in size, in isolation. The real key point is to let them compound over time. So, make more investment decisions, and like in tennis, let those small skill levels compound over time to lead into durable outcomes.
Oscar Pulido: And I think one of the points you're also making here is that the really elite tennis players, there are, as you say, the big points, there are certain parts of the match where winning that point has a bigger impact on performance, and I think you're saying that the elite investors, there are certain investment decisions that are really crucial to get right, and the really elite investors do get those right, and therefore leads them to better outcomes in their portfolios over time
Ronald Van Loon: I think really you need to look at those three things, in conjunction. So, getting more decisions right than you get wrong. Once you get a decision right, make sure you convert that into kind of a meaningful performance number. And then the third element is play that game often enough to have that same compounding effect like you have in tennis.
Oscar Pulido: So, Ronald, we talk a lot about tennis, which is a unique sport in that it gives the athletes hundreds of opportunities to express their skill. But that's not true of every sport. If we think about the sport of soccer or football, which took center stage this past summer in the US and Canada and Mexico, that's a different sport. That is one where it can be decided by just one or two moments. So, when you think about that contrast of tennis versus a sport like soccer or football, what does that tell us about the relationship between skill and chance, and does the same principle apply to investing?
Ronald Van Loon: You're right. it's completely different sport. Actually, almost at the opposite side of the spectrum. It has very few opportunities to score. a nil-nil scoreline or one-nil, and so forth, that's not uncommon. so, you typically have those kind of low scorelines or low opportunities to score.
And what that means is that indeed on match level, that means that the, the influence of chance is indeed higher in football than it is in tennis. So, in football, it's by no means given that the better team, so to say, wins the game. And perhaps that kind of unpredictability adds a little to the kind of the allure or the kind of the, the popularity of the sport.
But if you zoom out a little and go on World Cup level, so we know obviously you play multiple matches, then you see that same effect starting to appear again. so, for example, if you think about the World Cup, that was played this summer, the four semifinalists, right? It's Spain, Argentina, England, and France.
They were the four favorites going into the tournament. So, you're right. On individual match level, there is much less of a low-skill effect that you can see there. But once you start adding those up into tournament level or into national competition level, you see that same effect appearing over and over again, like in tennis, like in investing
Oscar Pulido: Right. So, it's just a different lens that you have to apply when trying to compare one sport to the next and apply those findings to what you're seeing in the investment world.
Let's keep talking about sports and one of the things that is another contrast between soccer and tennis. I'm going to say soccer because I'm based here in the US, Ronald, I know you're based in the UK, so you're probably wanting to correct me, but when we compare those two sports, there's another difference, which is this concept of the team. Tennis is a more individual sport; soccer is obviously more of a team sport. And investing can sometimes be portrayed as being about one great decision-maker making the call. But in reality, how important is the team around them to producing the consistent investment outcomes?
Ronald Van Loon: I think perhaps the best illustration of the team approach in football is perhaps, the winner. Spain won the World Cup. they've played eight matches. they scored fourteen goals, they conceded one. So that already gives you a ratio, that perhaps you think, 'Oh, that's obviously goals for, goals against. Perhaps that's a very defensive game.' But actually, the way that the team played is not defensive at all. I would highlight three elements to it.
One of them is in the team-based approach. One of them is the possession of the football. So, they play at around a sixty-four percent possession. That's much higher than the, than other teams typically in, in football. And they also have that possession a little bit higher up the pitch than is normal. And in the words of my footballing hero, Johan Cruyff, he said famously, 'If your opponent doesn't have the ball, then they can't score against you either.'
And then the, the third element is, of course, is the pass rate. And the way that Spain played had a, comfortably, much higher than average pass rate and also much higher than average successful pass rate. So that's a very unique style of playing and very different to the other four semifinalists, and obviously it proved successful.
And I think you can translate that over to the world of investing as well. I'm a bond manager. I work in fixed income. in the words of our CIO, Rick Rieder, he says there are something like one and a half million fixed income securities in the world. That-that's an enormous breadth and width of investment options you have on the table there. It's pretty obvious you are not very likely to win that game with a star striker approach or, with a long ball. You're really going to have to win that game through the team, because simply the width and the breadth of the investment opportunities are too broad.
So, indeed we have, specialists, each with their own function, we have credit analysts, looking at the credits. We have risk managers looking at position sizing. We have traders looking at execution. And then we can pass the security, so to say, in between these specialists.
So, I think there's clearly an analogy there. And my own way to think about it is that there's one and a half million fixed income securities in the world, that offers you one and a half million opportunities to score.
Oscar Pulido: Right, and going back to the beginning of our conversation, you don't necessarily have to make every single decision the right decision. In other words, in a portfolio, you may not own a one and a half million securities, that's unlikely. You're going to own far less than that. But there still gives you a lot of chances where you could get either the right decision or the wrong decision. But so long as you're getting a little bit more than half of the decisions right, you're probably trending in the right direction.
Ronald Van Loon: So, let's keep talking about sports. The Olympics are coming up in 2028, and the Olympics are interesting because for many athletes, there's years of preparation that come down to a single race, a single, match or a single performance. And that's, again, very different from tennis, where you have hundreds of opportunities to score. So, what can that teach us about preparation and decision-making when you may only have one opportunity to get it right?
Yeah. So of course, it's super different to the world of investing, right? In investing, you are measured continuously almost. In the Olympics, as you say, you have that one moment, one moment in time that you prepare for, for a long time. But I think it's quite interesting how the world of sports itself has adjusted to deal with that challenge. If you look at some of the Olympic sports, p-particularly perhaps the one that are a bit less popular, that don't have like annual international tournaments, the way how those sports are set up is that particularly in the year prior to an Olympics, you see a sudden increase in the amount of international tournaments. Think about qualification tournaments or ranking tournaments. So, what these tournaments offer to the participant is really two things. One, the opportunity to learn about yourself and where your skill is, and two, the opportunity to learn about the skill of your opponent. And that really makes the Olympics itself like an outcome of a process. The actual match or whatever they participate in is the outcome, and it's then that pre-Olympic circuit really that is the process through which you learn about your relative skill.
Oscar Pulido: And there's a similarity then or a parallel to an investment process that an investment team would use, and you mentioned you're a bond manager, a fixed income manager. There is a process behind the scenes that you're following to try and increase your chances of success.
Ronald Van Loon: Yes, absolutely. Continuous learning and continuous adapting to the environment because not only your own relative skill changes, it's also your opponent's changes all the time. So that's, that continuously learning process means that you have to all the time adjust.
Oscar Pulido: So again, we've continued to broaden the conversation. When we originally spoke, Ronald, it was about tennis, and we started there. We've talked about soccer. We've talked about the World Cup and team-based approaches. We've talked about the Olympics, which introduces this concept of a process that you need to follow to therefore be ready for that, that singular match or game or event that you've been building towards.
But let's talk about basketball, which has given us plenty to talk about, as for those of us, based here in New York, like myself, the New York Knicks won the NBA championship this summer, and I can certainly, tell you, Ronald, that New York was abuzz when that took place. Basketball is unique in, in that it gives us another way of thinking about decision-making because not every shot offers the same potential reward.
There are ways in which to score two points in basketball or, in some cases, three points. So how should investors think about the trade-off between the probability of being right and the potential payoff when they are?
Ronald Van Loon: Yeah, that's a super interesting basketball and it is also a great analogy. So, if you think about the game of basketball today and then compare it to maybe how the NBA was 20 years ago there has definitely been a big change. For example, two decades ago, the number of, three-point attempts that were made just beyond the, the circle in basketball was about 17% of total shots. And if you translate that to the NBA game today, that's more than double, that is, 40%. So that means is that the percentage of shot attempts that are being made just beyond the three-point line has more than doubled. The number of shot attempts that are made just below the basket is just about the same, and it's really that mid-range really where you see a decrease, so the two-point jumper, so to say.
And that's exactly the reason why that is a trade-off between the probability of making the shots and the payoff of when you do make the shots. Obviously, it is a bit more difficult to take a three-point shot and be, be successful in that than it is a, a two-point shot. But as you rightly say, your payoff is three points-- is 50% higher.
So, once you actually start translating that into expected value, so to say, right? Probability times payoff, then indeed the game has shown that it's the three-point shots and the right underneath the basket shots, the expected value is the highest, and the game has migrated to that. Very much the same as analogy as we just had in tennis or we just had in, football. You need to look at the probability of scoring and look at the payoff, marry those together, and then last point, of course, is look at how many shots attempts you can possibly make. And you can really see the game of basketball has really migrated on those three same d-dimensions to a different game today than it was two decades ago.
Oscar Pulido: Ronald, when you put all of this together, again, from the small edges that you get from a sport like tennis, which provides, hundreds of opportunities in a match, to the teamwork element of soccer, the different potential payoffs from a sport like basketball, what is it that elite sport ultimately teaches us about becoming a better investor?
Ronald Van Loon: If you look at the three sports, really look at them together, I think there's some big lessons to take away as an investor. You can almost break it up in three bits, you look at the probability of success per investment decision. You look at the payoff profile of the investment decisions, what's the payoff if you're successful, what's the payoff if you are unsuccessful? And then lastly is the number of goal attempts or the number of the investment decisions that the game provides you.
And I think the key message really here is a bit like in basketball, you need to look at these together. There's no point in focusing on just one aspect of an equation. You need to look at all three together and choose your optimum that works for you across all these three dimensions together.
And I think the second point, which is really valid, is that the investment skill you need to have per investment decision needs to be only marginally above a coin toss. As long as, of course, you let them compound over time. It's a bit like in tennis. if you let these investment decisions compound over time, you only need to be successful fifty-three, fifty-four percent of the time, and that leads you to these kind of durable high win rates over the long term.
Oscar Pulido: Well, all the sports that we've talked about are definitely contact sports. Ronald, you and I have worked in the markets for many years, and I think we can attest to the fact that investing is also a full-contact sport that's volatility that will introduce itself once in a while that can make it a very emotional, exercise but having discipline and thinking about some of the process and, relying on your team, some of the things that you've talked about will help.
Ronald, I'm just curious, when you go and attend a, a sporting match, can you just enjoy the game or is your mind racing about the analogy to investing?
Ronald Van Loon: Yes, you have to ask the people that join me, and I've heard that comment once or twice, so I think, you're probably onto something there.
Oscar Pulido: I'm sure your mind is, spinning. But we're thankful that it is because you've given us a lot of great analogies and a lot of great comparisons between sport and investing. thank you for rejoining us, on The Bid to talk about this topic, and we look forward to having you back when, when you have another great story to tell us about these two themes together.
Ronald, thank you again for joining us
Ronald Van Loon: Thank you very much
Oscar Pulido: Thanks for listening to this episode of The Bid. Next up, I'm speaking with David Rubenstein, co-founder of The Carlyle Group and owner of the Baltimore Orioles, about his new book, Inside the Owner's Box, where we'll discuss the civic role of teams, lessons he's learned in leadership, and the opportunities and risks shaping the future of sports ownership. Make sure to subscribe to The Bid and follow us on social media so you don't miss the episode.
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