Ted Williams

Theodore “Ted” Williams (1918-2002) was a legendary American professional baseball player for the Boston Red Sox. While an icon of sport, his name holds a special place in the investment world, not for any financial prowess of his own, but because his disciplined approach to hitting a baseball provides one of the most powerful analogies in value investing. In his book, The Science of Hitting, Williams detailed his strategy: he would mentally divide the strike zone into 77 baseball-sized squares and only swing at pitches in his “sweet spot,” where he had the highest probability of getting a hit. He knew that swinging at a borderline pitch would drastically lower his batting average. This simple yet profound concept was famously adopted by Warren Buffett to illustrate the single most important principle for an individual investor: patience. Just as Williams waited for the perfect pitch, an investor should wait for the perfect investment opportunity—a great business at a sensible price—and ignore everything else.

The beauty of the Ted Williams analogy lies in how perfectly it translates from the batter's box to the stock market. For an investor, the thousands of publicly traded companies are like a stream of pitches. The key is not to swing at everything but to have a clearly defined 'strike zone' and the discipline to wait for a pitch to land right in the middle of it.

Williams didn't just have a general idea of a good pitch; he had a detailed map. He knew that a pitch in the heart of the plate was a high-percentage swing, resulting in a .400 batting average, while a pitch on the low-outside corner might only yield a .230 average. This is a direct parallel to an investor's circle of competence. An investor's 'strike zone' is the set of industries and businesses they understand intimately. You might not know anything about biotechnology or semiconductor manufacturing, and that's perfectly fine. Those are “low and outside” pitches for you. But perhaps you have deep knowledge of the retail, insurance, or beverage industry. These areas are the heart of your plate. The lesson is to only “swing”—that is, invest—in businesses you can analyze and value with a high degree of confidence. Trying to invest outside this zone dramatically increases your risk of striking out.

Here is where the analogy becomes truly liberating for the individual investor. In baseball, a batter who doesn't swing at a pitch in the strike zone gets a “called strike” against them. After three strikes, they're out. This creates pressure to swing at borderline pitches. In investing, there are no called strikes. You can watch thousands of “pitches”—opportunities like IPOs, speculative crazes, or tips from friends—go by without ever swinging. There is no penalty. The market doesn't care if you don't participate for a day, a month, or even years. This is an enormous advantage that individual investors have over professional fund managers, who often feel pressured by their clients to be constantly active, swinging at mediocre pitches just to look busy. The intelligent investor, like Ted Williams, ignores the crowd and the noise, patiently waiting for that one “fat pitch” they know they can hit out of the park.

Applying the Ted Williams mindset to your own investment journey can build a powerful foundation for long-term success. The core takeaways are simple but require immense discipline.

• Patience is an Active Strategy. Doing nothing is an active and often wise decision. Resisting the urge to act on mediocre ideas preserves your capital for truly exceptional ones. Your goal isn't to be constantly busy; it's to be decisively right when it matters most.
• Define and Respect Your Strike Zone. Take the time to honestly assess your circle of competence. What industries do you genuinely understand? Write them down. Be ruthless in saying “no” to anything outside that zone, no matter how tempting it seems. This discipline is your greatest defense against permanent loss of capital.
• Swing Big When It Counts. The flip side of extreme patience is decisive action. When a wonderful business you understand becomes available at a price that offers a significant margin of safety, you should invest with conviction. These “fat pitches” are rare. When one comes along, you should be prepared to make a substantial investment, not just nibble at the opportunity. This leads naturally to a more concentrated portfolio of high-conviction ideas.