From pickleball to investing: the power of free lottery tickets

It’s been a while since my last issue. My spare time has been consumed with my daughter’s basketball (grabbing the rim now!) and stressing over my son’s college apps (got into his second choice!). Now that things have settled down, I am excited to be writing again.

The other day, one of my daughter’s friends mentioned that she’d like to follow a career path similar to mine. To her, that meant having the financial means to help others. When I told my daughter about it, she paused for a moment and said, That sounds good. I want to do that. Then she asked the big question: How? What should we do?

I shared one of my favorite dad quotes: "Chance favors the prepared mind", from the famed scientist Louis Pasteur. But I didn’t pick it up in high school biology. It was from the 1995 Steven Segal movie, Under Siege II! Amazingly it has stuck with me for close to 30 years. When she asked what it meant, I told her to focus on collecting as many "free lottery tickets" as possible. Eventually one will hit.

The risk-return principle in economics suggests that higher returns can only be achieved by taking on greater risk. While generally true, many of the world's greatest investors have mastered the art of increasing returns without proportionally increasing risk or reducing risk without sacrificing returns. 

As an investor, my favorite lottery tickets are hated stocks in public equity markets. While most are shunned for valid reasons, there are often hidden gems with significant upside. I’m particularly drawn to profitable companies where a substantial portion of market value is held in cash; sometimes even exceeding a company’s market capitalization.There were scores of such negative equity value companies during the dot-com bust and the 2008 financial crisis. In such cases, the downside is often minimal, with the investment treading water even if things go poorly. However when companies stage turnarounds, investors can be rewarded with dramatic upside.

With investing, truly free lottery tickets are rare. Most opportunities require either time or capital, neither of which is free. However, in life, free lottery tickets are far more common.

Effort
The idea behind free lottery tickets is simple: most won’t pay off, but if they’re free, why not keep playing until you win? As I help coach my daughter’s 8th-grade basketball team, I see this concept play out constantly. I tell our girls that when there is a fast break, make sure to sprint down the court for the rebound. Most of the time, the extra effort is wasted. Your teammate makes the layup and you wasted energy running. But when there is a missed layup, you get an easy putback, pad your stats, and make your coach happy. 

Another example is going after every rebound. The ball won’t always bounce your way, but the more rebounds you go for, the more you will get.  It’s one of the best ways to demoralize an opponent. Even cheering from the bench can be a free lottery ticket. You’re already there, so why not make an impact? Encouraging your teammates might spark a run, fluster the opposition, or even catch your coach’s eye, earning you more playing time. As with lottery tickets, don’t expect results every time. Keep on trying and eventually it will pay off.

Try Something New 
Putting yourself out there can lead to incredible experiences, and it rarely comes at a cost. As someone who is often trying new things, I can tell you that most don’t amount to much. But if they don’t hurt me, I figure, why not?  Growing up, my parents enrolled me in soccer, bowling, martial arts, tennis, swimming, and countless other activities. As an adult, I’ve dabbled in juggling, parkour, gymnastics, Krav Maga, rock climbing, hip-hop, and even pole dancing (which lasted only a couple of hours—it was painful and ridiculously difficult).

And then I tried something that meaningfully changed my life. Pickleball. A friend invited me to play one day. I really had no interest.  After playing tennis for so many years, the sport seemed silly and gimmicky.  But I figured, why not? It would be a fun way to hang out. One game in, and I was hooked. The very next day, I measured our backyard and started setting up a pickleball court in the backyard where we shoot hoops. Basketball is still my favorite, but pickleball has meaningfully improved our social lives. It’s a social sport that has brought us closer to our friends and neighbors while giving us a new way to connect with our kids and their friends. One of the best free lottery tickets I have ever found. 

Meeting new people
A great way to create new opportunities is by meeting new people. Every connection is a chance to make a friend, learn something new, discover an investment opportunity or even land a job. At your next party or work event, make it a goal to meet someone new. It can feel awkward at first, but with practice, it gets easier and even fun. A couple tips to try. Look for someone who seems bored or alone. If they’re busy on their phone, give them space, but otherwise, introduce yourself. Chances are, they’ll be relieved to have someone to talk to. If you don’t know what to say, use simple conversation starters. How do you know the host? Where are you coming in from? If you really want to put yourself out there, when it’s time to eat, sit at a table where you don’t know anyone. Go around the table, introduce yourself and start a conversation.

You never know where a simple introduction might lead. A local friend has made millions as an early investor in Tesla, SpaceX and Palantir. When I asked how he got into those deals, he told me he used to play Magic: The Gathering with a group that included Elon Musk. If that’s not a free lottery ticket, I don’t know what is!

Be Curious
One of my favorite examples of the power of curiosity is Steve Jobs and the success of Apple. His fascination with calligraphy led him to take a college course on the subject, sparking an interest in typography. When Apple launched the Macintosh, its innovative font options were a key selling point that led to strong growth in a number of large sectors such as publishing and media.  

A more down-to-earth example is the career fair I recently attended with my daughter, who’s been trying to figure out what she wants to pursue later in life. She met people from various industries and learned about numerous career paths, but nothing particularly excited her. The event was local, free, and only took an hour. It cost her nothing but offered the potential for valuable insight. In the past, she might have seen it as a waste of time as it yielded no clear benefit. But when I framed it as a free lottery ticket, she nodded with understanding. 

The key takeaway from all these examples? Many activities in life will yield no tangible benefit. But when they have no cost, you can keep on trying without downside. If you could enter the lottery for free, why wouldn’t you keep playing until you won the jackpot? In the same way, the game of life rewards those who keep showing up.

So the next time you're asked to try something new or your kids, say Do I have to? Remind them: free lottery tickets are always worth taking.

Sangeeth Peruri - Jack of Many Trades, Master of None
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