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Second Level Thinking – World Cup Edition

Jurgen Klinsmann, the coach of the US soccer team is caught in a maelstrom after deciding to leave Landon Donovan, the leading goal scorer in US Men’s National Team history off the team for the upcoming World Cup.   But I don’t think he’s getting enough credit for the brilliance behind the move.  To me, this just looks like a smart case of second level thinking.

In the world of finance and economics we learn about second level thinking because we have to learn how to think several moves ahead.  The beauty contest of the market is not just about what you think of the current state of asset prices, but also about how others will respond to those asset prices.  In other words, thinking ahead and thinking about the responses of your competitors is often far more important than understanding the rationale for your own decisions.

In sports, second level thinking is equally important, but perhaps even more difficult to attain.  After all, sports are the ultimate “what have you done for me lately” industry (besides, err, maybe the porn industry, but we’ll leave that one for another day).  But when you look at the great sports franchises they tend to exhibit second level thinking.  That is, they tend to think not at the immediate impact of their moves, but they tend to think several moves ahead.

In the case of the World Cup and the US Men’s National Team, Jurgen Klinsmann has probably assessed the strengths of the US team and come to the very realistic conclusion that we just aren’t good enough to win the whole thing (and in fact probably won’t even get out of group play).  So rather than send a washed up veteran he’s decided to think several moves ahead by giving some younger players experience today so they’ll be veterans when it matters in 2018.

The first level thinkers can’t look past the upcoming tournament and have probably allowed some of their biases to unjustly inflate the odds of the USA’s chances.  But the second level thinkers are thinking about how this event is merely preparation for long-term success.  It kind of reminds me of NFL teams who forego the “win now” mentality of signing expensive veterans in free agency in favor of building their team up through the draft.

Jurgen Klinsmann is displaying some savvy second level thinking here.   And we should all applaud him for it.

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