Mar
4
Basketball and Markets, from John De Palma
March 4, 2008 |
Tyler Cowen wrote a piece on why the Rockets drafting injury-prone center Yao Ming was like writing a naked put.
"…So why did the Houston Rockets draft Yao Ming? They couldn't not draft him. The lessons for financial markets are obvious. Drafting Yao Ming is like writing the disguised naked put. You see the money in front of you, you see the return in front of you, you see the potential in front of you, none of the alternatives are so glamorous, and so you can't not do it. Besides, other players get injured too…"
Perhaps the metaphor makes sense to the extent writing puts and drafting an injury-prone player both have asymmetrical reward structures with divergent modes and means. But Cowen seems to be inappropriately disparaging both activities. Writing equity index puts has historically been profitable. And at least in baseball it appears a GM can sign injury-prone players at a sufficiently large discount to be more than fully compensated for the risk.
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Look at the statistics of Yao. He is a big time player with big time statistics. look no further than the fact that he has been an all-star for 6 straight years. This year alone he had 30 double-doubles. And he averaged a season double-double until his injury.
Secondly his injuries have nothing to do with his height. His first injury was with osteomylitis in his toe. Then he broke his leg, this year he suffered a stress fracture. If one were to suggest his height would be a contributing factor to injuries then it would be to his back.
Next point. Rik Smits played over a dozen years in the NBA, Wilt Chamberlain 13 years and Kareem Abdul Jabaar 20 years. Gheorge Mureson the tallest man ever to play in the NBA played 9 years. RAlph Sampson played 10 years. David Robinson a decade. Of course, lest we forget Shaquille O'Neal with 16 years.
Now I could also submit Grant Hill who has chronic injuries and if I worked at it I could come up with plenty others.
How about Allen Iverson being too thin and fragile, Nate Archibald, Mugsy Bogues and Spud Webb too short.
If Yao is a naked put then I will take that trade all day.
Steve Leslie