What the Best Scrabble Players in the World Can Teach You About Getting Rich

By Markets Fool.com

Later this summer, the greatest Scrabble players in the world will gather in Reno, Nev., for the 2015 North American Championship of Scrabble.

Continue Reading Below

Even though there won't be ESPN cameras rolling when the tiles are drawn, these world-class Scrabblers will be under careful observation during their training and at the competition. Scientists and researchers are using these competitors to learn more about how to improve complex mental skills and to try to pinpoint the psychological drivers of competitive greatness.

Complex mental skill and competitive greatness? Couldn't you use some of that in your investing?
At last year's championship, the final game included words such as "wab" (noun: a web) and "qua" (adverb: in the capacity of).

From a random order of letters on the tiles in front of them, these competitors are able to recognize these ridiculous words, hidden away in the figurative attic of the dictionary. Then, before making a play, the players must consider what letters will be left for their next move. And they also can't forget the competitors sitting at the table across from them. They must play strategically to maximize their own points while maintaining the tactical upper hand on the board.

My head is spinning just thinking about it, not unlike the way my head sometimes feels when thinking about the endless companies, securities, indices, and funds available for investing. If researchers can use these Scrabble geniuses to help us analyze, understand, and strategically act on our investing ideas -- well, that would clearly be very useful!

What have they discovered?
Researchers have consistently found that top-tier Scrabble competitors spend considerably more time memorizing word lists and studying the game than intermediate and novice players do.

Continue Reading Below

That conclusion is kinda obvious, and it certainly applies to skills beyond Scrabble. But at the same time, it also leaves something to be desired.

Michael Jordan has played a lot more basketball than you or I, but did he play that much more than Karl Malone or Patrick Ewing? His contemporaries were very good, but they still aren't considered comparable to Jordan's level of greatness.

Most people would say Jordan was simply born with it. He had the combination of competitiveness, athletic ability, work ethic, and basketball IQ to become truly great.

In that same way, researchers have found that elite Scrabble players are also born with it. Specifically, they tend to have exceptional working memory and visuospatialreasoning. Cognitive testing and brain imaging have proved it.

Does this imply that top investors are also born into their greatness? I don't think so, and there's a very simple reason why.

You don't have to be born with "it"
In Scrabble, you don't have to know the definition of a word. You just have to know it's a word. Therefore, your brain needs to be able to recall a vast, vast database of memorized words, and nothing else. In terms of the human brain's capabilities, that's barely scratching the surface.

In basketball, the nature of the game gives tall, athletic players a huge competitive advantage.

Investing doesn't work that way. Investing doesn't require memorizing the ticker symbols of all the stocks traded on the NASDAQ and recalling them on command. Nor does investing give an advantage to any physical attributes. Being tall or short is irrelevant.

To be a great investor, you don't need to have any special DNA. You just need a consistent, process-driven system to analyze, evaluate, and then take action.

Warren Buffett is a great example. He has four simple rules that he follows when he invests. He doesn't memorize any lists or facts; he just starts analyzing a company, applies his four rules, and makes a decision. No special DNA required.

What are those rules?

1. Buy companies you understand.
2. Buy companies that will, in all likelihood, be around for decades.
3. Buy companies with good management.
4. Buy companies at a price low enough to give you a margin of safety.

That's it. Pretty simple. The challenge for the vast majority of us is following the rules consistently. It's not panicking when the market hiccups. It's not cutting corners and looking for shortcuts. It's letting the process work over time.

It's always fun to imagine being born destined for greatness. It almost doesn't matter if that greatness comes from Scrabble, basketball, investing, or anything else.

Fortunately, in investing you can find great success, with or without "it."

The article What the Best Scrabble Players in the World Can Teach You About Getting Rich originally appeared on Fool.com.

Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.