Mar

24

MoneyballLast week I heard Michael Lewis talk about his book Moneyball, so I read it. The overall story is clearly that conventional wisdom is often proven wrong when you put the numbers to the test, but there are several underlying stories that I thought were equally important to a trader.

One is the story of Billy Beane, the A's coach. He himself was a top prospect who had all the right "tools" according to the scouts, but the way Lewis tells it, was too afraid of failure, too afraid to look stupid. This happens often to batters, even the best. Apparently going against the conventional wisdom applied only to the recruiting and the game not the mental aspect.

A second story, was how his anger managment, or lack of anger management, made fear into a death spiral. Michael, when asked what Billy thought of revealing his secrets, said he was more worried what his Mother would think. That he made him sound like he always used four-letter words, than that any of the others managers would read the book.

Their great winning record but lack a of World Series title or appearance, suggests that even in baseball, perhaps the most individual of team sports, anger and its cousin fear, made me ask myself had he ever applied the scientific method to his motivational coaching techniques. Count the tirades and count the players' response in the game. A good coach knows the way to improve is to focus on what you need to do right, not the last mistake.

The third, was how Billy recused many a seeming misfit, resucing many a poor boy whose future upon graduating after giving studies half his attention was otherwise very bleak.

The fourth is an intro to the writings of Bill James of Baseball Abstract, and the establishment's reaction to a counter. James's obsession with baseball stats, his ability to think for himself and his writing created a large following and an industry.


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2 Comments so far

  1. Charles Bond on March 25, 2008 4:09 pm

    Of course, the Mitchell Report should also be considered when analyzing the findings in Moneyball. Of particular interest is the claim the “Power can be acquired…” MVPs Jason Giambi & Tejada had no trouble acquiring it illegally, getting steroids from teammates. In fact the A’s were arguably the worst offenders of the steroids era!

  2. George Parkanyi on March 25, 2008 5:44 pm

    I loved “Moneyball”, and was very impressed with Billy Beane’s out-of-the box thinking. The scouting lot are an old-boy community of ex-players, who even today tend to asses prospects highly subjectively. So they would frequently be scouting star players in high-school and making assessments on how “good” they looked and whether they had “character” or “looked” like a ball player.

    Billy Beane’s forte was doing the math, and irrespective of how a player “looked”, he would zero in his stats. If the player could hit or pitch as shown by the numbers, Billy would take a look. If the player came with a low price tag (Oakland’s ownership runs a very tight budget) because he was being overlooked for some subjective reason (e.g. “looks awkward at the plate”, “too heavy” etc…), Billy would scoop him up. While other scouts were chasing concepts (great “looking” kids in high school), Billy was buying value, mostly where there was already an established track record in the University system. Billy also would make deals for injured players whose market value had dropped precipitously (turnaround situation), but whose stats offered a big pay-off is the player recovered.

    Baseball value-investing, pure-and-simple, in an environment where no-one else was doing it is what allowed the A’s to be contenders year after year and spawn mega-stars like Jason Giambi and Johnny Damon (now with the Yankees) on something like the 3rd-lowest budget in major-leage baseball.

    OK, so the A’s haven’t won the World Series lately. At least their fans have had a good ride. And two organizations heavily influenced by Oakland coaching alumni are Toronto and Boston. We all know about Boston these days.

    Cheers,
    George

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