What the "Miracle on Ice" Still Teaches Us About Wisdom and Wealth

Exactly 35 years ago this past Sunday, a group of young U.S. hockey players upset their "invincible" Soviet counterparts in a medal-round Olympic hockey game that we still remember today as the "Miracle on Ice."

As all of you know, I'm a big history buff. And I believe it's worth taking the time to study the events of the past - both to appreciate their relevance and to understand the great life lessons they hold for us.

Feb. 22, 1980's "Miracle on Ice" can certainly teach us much about wealth and wisdom.

I'm going to share some of what I learned from that game.

The Upset of the Century

I still get goose bumps - chills, in fact - when I think about that hockey game and the impact it had on the United States.

On that Friday in 1980, when news broke of the improbable 4-3 win, folks all across the nation were heard cheering "We beat the Russians!" until it cycled into an almost cacophonous roar.

Strangers embraced. Motorists parked their cars wherever they happened to be - even on highway shoulders - so they could take part in the impromptu celebrations.

It was no different at Penn State University, where I was just a few months into my freshman year. ABC decided to delay its broadcast of the late-afternoon match until prime time, meaning we already knew the U.S. team had won. In fact, when news of the victory first broke, we opened our windows and listened as a cheer rolled from one end of Penn State's massive "Happy Valley" campus to the other.

When the broadcast began about an hour later, a dozen of us crowded around a pint-sized black-and-white television in a dorm room and watched what to this day is considered one of the greatest sporting events in history.

It didn't matter that we already knew the outcome: I still experienced those chills as the youthful Americans kept battling back, and I felt my eyes sting as announcer Al Michaels issued his now-classic line: "Do you believe in miracles - yes!" And another cheer rolled through Happy Valley.

Beyond the great memories, here are four of the most important investing lessons I gleaned from that historic upset.

Lesson No. 1: Don't Believe the Hype

Coming into the 1980 Winter Olympics hockey tournament in Lake Placid, N.Y., it was almost an accepted fact that the Soviets were unbeatable. And everyone understood why.

The Soviet Union national team had won the gold medal in six of the seven previous Winter Olympics - including the previous four, dating back to their victory in the 1964 games in Innsbruck, Austria. Indeed, in the four Olympic tournaments that followed the Soviets' 1960 upset by Team USA at Squaw Valley, Calif., Soviet teams had gone 27-1-1 - and outscored their opponents 175-44 in the process. In matchups against U.S. teams, the cumulative score was 28-7.

The Wealth and Wisdom Lesson: It sounds like something out of a kids' book, but it's a truism nonetheless: Never let anyone tell you they're better than you - or that something can't be done.

There are clear parallels to the financial markets here, where "upstart" retail investors like you and I are repeatedly told we can't outgun the investment pros on Wall Street.

The investing parallels are striking. Retail investors are like the upstart Americans. But that's malarkey. Retail investors with the right commitment - and the right preparation - can easily outdo the Evil Empire of Wall Street.

In fact, that leads right to our next lesson - which has to do with preparation.

Lesson No. 2: Preparation Paves the Path to Victory

From the very beginning, U.S. hockey coach Herb Brooks believed the Soviets could be beaten - by somebody. And while the U.S. team might not be the best team in terms of talent, he vowed it would be the best-prepared.

Brooks, a fine coach at the college, Olympic, and professional level, was known for some unique sayings, which his young team members gleefully collected and labeled as "Brooksisms." Some were downright hilarious - like, "You're playing worse and worse each day - and right now you're playing like it's next month." But they all made sense - even the Brooks favorite "The legs feed the wolf, boys."

What Brooks meant, of course, was that the best-conditioned team would have the best chance to score - especially late in games. Indeed, the "color" announcer on the hockey broadcasts - former Montreal Canadiens goalie Ken Dryden - said he'd never seen any team outskate the Soviets late in the game. But that's just what the U.S. team was doing - thanks to the physical conditioning program Brooks had created.

The Wealth and Wisdom Lesson: Being prepared for any task is the first step to victory - whether you're talking about a home project, a job, or your investment portfolio. If you want to prepare to profit, make sure you have an investment plan, understand and stay within your risk tolerances, and maintain a long-term view. Thoroughly understand the investments you're making. And do everything you can to "keep current" on the newest investment trends and opportunities.

Lesson No. 3: Don't Get Cocky

Once Team USA took its 4-3 lead, as the clock wound down on the "Miracle on Ice" match, Brooks was stunned when the Soviets didn't pull goalie Vladimir Myshkin to give them an extra skater. Soviet coach Viktor Tikhonov apparently didn't believe in the maneuver - in part, most likely, because his team almost never trailed that late in a game.

There was also some complacency, or outright hubris, involved - a very real belief by Tikhonov & Co. that the Soviet team was too strong to resort to such maneuvers. That overconfidence was exacerbated by two things.

First, Team USSR had stormed through the games leading up to the U.S. match, beating Japan 16-0, the Netherlands 17-4, Poland 8-1, Finland 4-2 and Canada 6-4 to easily qualify for the next round. Second, the Soviets had crushed Team USA 10-3 in an exhibition at Madison Square Garden back on Feb. 9, just days before the Olympics began.

Tikhonov later admitted that the exhibition victory "turned out to be a very big problem," because it caused him and his players to underestimate their younger American rivals.

The Wealth and Wisdom Lesson: Complacency kills - in life and in investing, as well as in hockey. When you're complacent, or overconfident, you don't prepare. You don't keep your eye on your goals. You don't stay current. And the results can be disastrous. Humility can be a powerful ally. Do your best to always maintain the proper perspective.

Lesson No. 4: Don't Forget to Dream

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If you want to relive the thrills - and re-experience the chills - of the miraculous hockey victory at Lake Placid, check out the Disney flick "Miracle." The 2004 docudrama, in which actor Kurt Russell does an amazing job channeling Brooks, is one of my favorite movies of all time.

One of the movie's main messages is that dreams are the main currency of life. At one point, Team USA is down 3-2 but gamely sticking with the Soviets, and an electrified crowd chants "U-S-A, U-S-A, U-S-A!" Brooks (Russell) calls his team to the boards in front of the team bench. "Listen to them," Brooks tells his players as the chanting rolls on. "This is what you've done. We've come from behind in every game in this tournament so far, and we can do it again."

The players stare back, still unsure - until Brooks breaks through: "We can beat these guys!" We know the rest: The U.S. rallies to beat the Soviets and, two days later, beats Finland to win the gold.

The Wealth and Wisdom Lesson: This one is easy. No matter how improbable they might seem, don't ever stop pursuing your dreams. You just might achieve them.

A Postscript

One of my favorite bits of "Miracle on Ice" trivia has to do with a magazine.

The cover of the March 3, 1980, issue of Sports Illustrated featured a photograph by Heinz Kluetmeier of Team USA celebrating its win over the Soviets. It was devoid of any captions or explanatory headlines - and for good reason, Kluetmeier said, "It didn't need it. Everyone in America knew what happened."

 [Editor's Note: Unless otherwise directed, we recommend investors employ a 25% "trailing stop" on all holdings.]

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About the Author

Before he moved into the investment-research business in 2005, William (Bill) Patalon III spent 22 years as an award-winning financial reporter, columnist, and editor. Today he is the Executive Editor and Senior Research Analyst for Money Morning at Money Map Press.

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