As Owen Farrell knows, a losing decision is not necessarily a wrong one

Owen Farrell made a decision that did not come off in rugby union’s showpiece final last weekend – here’s why we suspect, given the same set of circumstances, he would make the same call again


Andrew Williams

Andrew Williams

Investment Director

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With five minutes left to play in rugby union’s 2022 Premiership Final last Saturday and his team trailing Leicester by three points, Saracens fly-half Owen Farrell faces a huge decision. Does he kick a relatively straightforward penalty, tie the game and so force Leicester to have to score again or face extra time? Or do Saracens aim to take advantage of their extra man on the pitch and try and seal the win inside 80 minutes?

In rugby union, alongside the scrum-half, the fly-half is the key strategist on the pitch and, as the long-time holder of that position for not just Saracens but England too, Farrell is no stranger to big decisions. He opts to kick the penalty, levels the score at 12-12 – and, shortly afterwards, watches his opposite number Freddie Burns nail a last-minute drop-goal that clinches the title for Leicester.

Did Farrell make a mistake? No doubt there will be those who would argue he should have taken ‘the braver option’ and pushed for the try that might well have seen Saracens crowned English champions – but to suggest not doing so amounts to a mistake would be to confuse outcome and process. With that in mind, it was interesting to read Stuart Barnes’s take on the incident in The Times (subscription needed) on Monday.


‘Stay in the game’

Now a rugby journalist and commentator, Barnes had, like Farrell, spent his playing career at fly-half – principally for Bath in their title-winning pomp of the late 1980s and early 1990s, picking up 10 England caps along the way. And when, as Saracens are awarded their late penalty, his press-box colleague Stephen Jones asks him what he would do, his instincts are in firmly line with Farrell’s. “Stay in the game,” he replies.

“There’s no hindsight, nothing clever,” Barnes writes afterwards. “Only four words that will prove to be wrong. Stephen might not have played in front of a Twickenham full house in a final but he reckons Saracens should go for the win.” And he goes on to note: “Jones was right on this occasion, while Barnes and Farrell were wrong.

Read more from The Value Perspective: In search of the Holy Grail of consistency – Wayne Barnes

“On another day the game might well have crawled towards extra time and Saracens, with their one-man advantage for the early stages of the additional 20 minutes, might well have ground their way to victory. This wasn’t a mistake on the part of Farrell so much as an illustration of how the Saracens fly half’s mind works. He doesn’t dazzle so much as drain the strength from the opposition with attrition.”


True to your process

Evidently Farrell has a process that has worked for him more often than not and, in kicking for goal, he was staying true to it. Indeed, as Barnes observes: “In terms of results, it is impossible to find any fault with a team who have won so much over the years. I came from a team and culture in Bath where winning was prized above all. The result was everything.”

Most investors would take a similar view on the importance of results – and, here on The Value Perspective, we would argue the best way of achieving a favourable investment outcome is to find a process that works and stick with it, come what may. And one way we assess how our value-oriented approach is working is, every January, to consider what lessons we can learn from the previous year’s investments.

We analyse what we did right in our portfolios – and what we did wrong – and, while most people would say that all comes down to what made and lost us money,  most people would be completely wrong. For us, the right lesson to take from the process is, if I took a particular decision 100 times, would I make money on average? As value investors, we want to make investments that make us money 60 or 70 times out of 100.


Shadow of doubt

Of course, that leaves 30 or 40 times out of 100 when we do not, which in turn can create a shadow of doubt – and it was intriguing to see Barnes’s own misgivings. “Over the years I have many a time wondered whether we weren’t wrong all along,” he writes. “Saturday’s penalty from that late scrum was a moment when anyone who has captained a side in a game of relative significance would have thought: ‘What would I have done?’

“The answer I gave Stephen partly explains why Bath won all their cup finals in the dying days of amateurism but rarely by the margin many expected.” Yet Barnes concludes: “This time, the England skipper was wrong. On another day, it might have been the right call. What it was, was conservative. It can take bravery bordering on the cavalier to run the risk of loss over extra time. The dice rolled against Farrell. It happens.”

So does that mean Farrell would play it differently next time – go for glory rather than play the odds? We know what we would do. After all, at its heart, value investing is a set of rules that helps to keep you on the right side of the averages so that, instead of being caught out by how ‘likely’ you believe – at the time – any decision is to play out, you put yourself in the best possible position to exploit the emotions of others.

If a particular course of action turns out to have been one of the times we lose money, here on The Value Perspective, the lesson is not ‘never do that again’ but ‘just keep doing it – over and over and over’. We have our suspicions Farrell would take a similar view.


Andrew Williams

Andrew Williams

Investment Director

I joined Schroders in 2010 as part of the Investment Communications team focusing on UK equities. In 2014, I moved across to the Value Investment team. Prior to joining Schroders I was an analyst at an independent capital markets research firm and hold a Economics and Politics degree.

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