Tag Archives: Moneyball

Another Perspective on the “Best of 2010” Lists

 

This is the time of the year that we see so many collective lists of the “best of 2010.”  In the last few days, we have seen such lists for films, sports accomplishments, songs, architecture, recipes, restaurants, and of course, books.

I want to tell you that I am unimpressed with most of the lists that I have seen that focus on books.  As with films, these book lists contain great confusion among quality and quantity.  That premise is particularly true when the lists come from booksellers themselves, such as a recent e-mail I received from Barnes and Noble with their “Books of the Year.”

Just like a film, a book is not necessarily good because it sells.  Popular, best-selling books are of no greater quality than are popular, high dollar-grossing films.  Because people buy a book does not make it good.  Nor do I consider it a good barometer for quality.

Consider the terrible film from the late ’70’s, the “Rocky Horror Picture Show.”  That film grossed millions of dollars and played regularly in theatres on Friday and Saturday nights through the mid ’90’s.  It had no redeeming merit and critics panned its quality.  Yet, it had a cult-like following, and it played to packed audiences, mostly either inebriated or bored, for many years.

In the recent Barnes and Noble list, I saw one business book for the 2010 year.  It was The Big Short by Michael Lewis.  I saw no other business books.  I believe that was a fine book, but not as good as his previous offering, Moneyball.   Why was it on the list?  Because it sold.  The best books in that list are the best-sellers.  But, best-selling does not indicate high quality.  I can give you titles of at least a dozen other books this year that were of higher quality than that one, but that simply did not sell as well.

Please remember that we only summarize the content of best-selling books at our monthly First Friday Book Synopsis in Dallas.  The number one criterion is that the book must be on a best-selling list somewhere that we find credible.   These lists include Business Week, Wall Street Journal, New York Times, and Amazon.com, among others.  I will admit to you that after 13 years of doing this, I have delivered synopses of some books that sold well, but that were simply not very good.  Some were not well-written, some were ill-researched, and some were best-sellers just because of the reputation of the author.

Regardless, we will continue to use best-sellers as our basis for book selection at the First Friday Book Synopsis.  But, I am telling you that popular does not equate to good.  And, there are likely some very good books that do not have the boost of marketing dollars from huge publishers that likely go overlooked.  Strange as it sounds, it may not be optimal, but these lists remain the best vehicle available for us to use for our selections.  Remember – popular may not be good.  And, good may not always be popular.

What do you think?  Let’s talk about it!

Coach Ron Washington-Bringing Out The Best, But Never Pretentious (Insight From Michael Lewis, Moneyball)

“That's the way baseball go." Ron Washington

Quoted without comment, about Ron Washington, while he was the infield coach of the Oakland A’s:

Ron Washington was the infield coach because he had a gift for making players want to be better than they were — though he would never allow himself such a pretentious thought.
Michael Lewis, Moneyball, (p. 165).

Go Rangers!

Outliers, Talent Is Overrated, And Others – Creating Conversations About Success

I’m a little fuzzy on “the point” of this article in Slate.com.  But I know this, she is right about the popularity of Outliers, and the overall subject.

Here’s the article:  Give It a Rest, Genius — What the new success books don’t tell you about superachievement by Ann Hulbert.  Of the books discussed in the article, I have presented synopses of two:  Talent is Overrated by Geoff Colvin, and Outliers by Malcolm Gladwell.

She describes the (relatively) new-found fixation on the 10,000 hour rule.  She is right to say that Colvin’s Talent is Overrated is more specific, more “demanding” than Outliers.  Here are a couple of paragraphs from her article:

In their calculus of success, these books endorse perspiration over inspiration as the key to extraordinary performance. The prevailing term is “deliberate practice,” introduced by K. Anders Ericsson, a psychologist cited in every one of these books for research that has led to the “10,000-hour rule.” That’s how much intensely focused training it takes to reach the expert level, in any field. Coyle’s more New Age coinage is “deep practice.”

Higher expectations can indeed work wonders for anyone, but truly relentless drive is a rarity. Amid all the recycled material in Bounce, Syed offers a sobering firsthand reminder from the sports front: The necessary fanatical commitment to mastery is most commonly inspired by competition, which has a way of winnowing ruthlessly. But in an era when plenty of American workers feel we’re running in place and just barely keeping up, the mixed message of this genre is one we’re understandably more eager to hear: Maybe we don’t have to become magnitudes more frenetic than we already are—just a whole lot more focused—and we, too, stand a chance of zooming ahead.

I remember this thought from Lewis’ Moneyball.  By the time a baseball player is a young adult, it is simply too late to teach him not to swing at a ball.  Here’s the quote:

What most scouts thought of as a learned skill of secondary importance (the ability to take a lot of pitches) the A’s management had come, through hard experience, to view virtually as a genetic trait, and the one most likely to lead to baseball success.

The A’s acknowledged that it probably could be taught – if you could begin at about age 5…

So, what does all of this say to us as adults in the actual pursuit of current and future success.  I think two things:

1.  You may not ever be world class, but you can get better with deliberate practice. For example, do you speak, and is speaking a key part of your path to success?  Then watch yourself on video, hire a speech coach, scrutinize every part of your speaking, from content, to delivery, to gestures, to eye contact.  Extrapolate this principle into any work you actually do.  Watch yourself do it.  Hire a coach to catch your flaws (you’ll probably not be able to see them – and, I hate to tell you – you do have some!).  You have to work hard at developing the talent needed to excel.

2.  Every job requires this kind of attention to get better. You know that line “this call might be monitored.”  I wonder if anybody who monitors such calls is doing so to help the people on the calls get better, or are they just trying to catch them doing something wrong?

Help yourself, and others, get better – day in and day out — by focusing on getting better.  That may be the take-away message of these books!

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You can purchase my synopses of both Outliers and Talent is Overrated, with audio + handouts, at our companion site, 15minutebusinessbooks.com.

What if everything you thought was right – was wrong?

I moved to Dallas in 1987.  If you had decided, based on the naked eye, where to invest all of your money, it would have been in the frozen yogurt shops  (yes, “shops,” plural — TCBY seemed to be the champion).  Always busy, lines out the door, all day – they owned the landscape.  And there seemed to be one on every other corner.

Today, I know of only one yogurt shop in Dallas.  Our neighborhood TCBY held on for quite a while, but it disappeared a couple of years ago.  They are practically all gone.

Your eyes saw the crowd, but would have missed so much more.

And in the game/the job of business, we have to learn to see the right stuff.  And to see the right stuff, we have to see with new eyes, and we have to look in different ways, in different places, and we have to be able to reject what looks reliable for what actually is reliable

This is the message that is all around us – the naked eye will not tell you what you really need to know.  And that is the message that I revisited this month from Michael Lewis’ Moneyball:  How to Win at an Unfair Game.

I posted once on this earlier this month — here’s a little more.   One of the heroes of the story is Bill James, who, since the book was published, was hired by the Boston Red Sox and helped break the Bambino curse.  That required a true genius!

Here are some quotes about what Bill James saw, and understood, from Moneyball:

“Baseball statistics, unlike the statistics in any other area, have acquired the powers of language.”  (Bill James, 1985 Baseball Abstract).

James’ most general point, buried beneath his outrage about fielding statistics:  the naked eye was an inadequate tool (emphasis added) for learning what you needed to know to evaluate baseball players and baseball games.

“So if we can’t tell who the good fielders are accurately from the record books, and we can’t tell accurately from watching, how can we tell?  By counting things.”

Baseball teams didn’t have the sense to know what to collect, and so an awful lot of critical data simply went unrecorded:  how batters fared in different counts and different game situations, who was pitching when a base was stolen, how different outfielders affected the audacity of runners on the base paths, where hits landed and how hard they were hit, how many pitches a pitcher threw in a game.  The lack of critical data meant that “we as analysts of the game are blocked off from the basic source of information which we need to undertake an incalculable variety of investigative studies.

Well into the late 1990’s you didn’t have to look at big league baseball very closely to see its fierce unwillingness to rethink anything.  It was as if it had been inoculated against outside ideas.

What James’ wider audience had failed to understand was that the statistics were beside the point.  The point was understanding; the point was to make life on earth just a little more intelligible; and that point, somehow, had been lost.

In Moneyball, the new experts learned that one skill that could really help a less “gifted” player go a lot farther toward helping his team win is this skill:  don’t swing at a pitch that is a ball — only swing at strikes.  Why?  Because getting on base is the precursor to scoring runs.  And it really does not matter how a player reaches base, if a player can get there more often, he will score more runs.  But then they discovered this:  if a player had not developed the discipline to “not swing,” it simply was too late to teach it by the time that player reached the adult playing age.

What most scouts thought of as a learned skill of secondary importance (the ability to take a lot of pitches) the A’s management had come, through hard experience, to view virtually as a genetic trait, and the one most likely to lead to baseball success.

Moneyball tells a true story, but it also is a parable about some deeper discoveries.  Like this one:  the entire Wall Street crisis was, very simply, a crisis caused by the naked eye – the naked eye triumphed, and “counting the right things” was not done (except by a very select, very ignored. and very highly rewarded, few).

But, you say, Wall Street counts everything.  Yes, they do — but maybe not the right things.  Baseball counted all the time too — but Bill James said, and proved, “you are not counting the right things.”  That was has genius, just as it was the genius of the Michael Burrys and his very few companions who counted differently in the Wall Street crisis.

It’s been a while since I’ve read the “irrational exuberance” reference from a few years ago, but the naked eye can cause an epidemic of irrational exuberance.  And then the lack of wisdom of the crowds (the dark side of Suroweicki’s insight) can lead to bad decisions, costly errors, and a last place finish in the business of business.

I’ve been thinking about numbers…

A book about Baseball -- and so much more!

Last night, I presented for the first time in about six years my synopsis of Moneyball:  The Art of Winning an Unfair Game, by Michael Lewis.  It is a book that chronicles how the Oakland A’s, under the philosophy of General Manager Billy Beane, was able to compete with the big boys on much less money.

Consider this:

2002:  New York Yankees – 103 wins — $126 million payroll
2002:  Oakland A’s – 103 wins — $41 million payroll

Or, consider this:   the worst team in major league baseball will win 49 games per year, with the “minimum” payroll.  (No, I do not understand how the numbers gurus arrive at such calculations).  So, the cost per win over 49 is another number worth crunching.  So, ponder this comparison from the same time period:

The Texas Rangers spent $3 million per win for every win over 49
The Oakland A’s spent $500,000 per win for every win over 49

So Moneyball tried to tell the story of how numbers changed the thinking regarding how a team with limited resources could compete in a very unfair game/league.  And, though it is disappointing that the story could not end with an A’s World Series win, it demonstrated that the A’s got really, really close – with far fewer dollars than the big spenders.

But this book is not about baseball (though it is entirely about baseball).  It is actually about our blind spots.  (Yes, Lewis wrote The Blind Side also).  It is about the fact that we make so many evaluations and judgments and decisions based on intuition, and a commitmnt to “the way we have always done things,” rather than on hard and reliable data.  And such a data-deprived approach to evaluation and decision making is flawed.  And we are blind to our blindness.

Here’s a key quote from the book:

By analyzing baseball statistics you could see through a lot of baseball nonsense.

In the updated edition of Moneyball, Lewis has an afterword entitled:  Inside Baseball’s Religious War.  His premise:  the way to evaluate talent in the old days (with a few checks, like running speed and batting average, and a whole lot of “gut”) is simply not as reliable as the new science of sabermetrics.  In other words, scouting baseball talent is built on a “religion,” not a science.  And Lewis chronicles how the insiders of baseball’s unofficial “Club, ” the followers of the old religion, utterly disdained Billy Beane and his ways.

But now, we are all learning to know better.  Bill James, the father of sabermetrics, the father of Billy Beane baseball, works for the Boston Red Sox, and his numbers helped break the Bambino’s curse.  (That really is the triumph of science over religion).

This is a book about baseball, about numbers, about blindness, about blindness to our blindness.  It is also a book about Wall Street and the crash without ever mentioning Wall Street.  It is about our unshakeable belief in our intuition, and our tendency to deny/ignore/stay purposefully blind to the numbers that could correct our thinking.

Michael Burry is one of the ones who saw the crash coming, and Michael Lewis tells his story in The Big Short.  Here are the first lines of Burry’s op-ed from last weekend’s New York Times:  I Saw the Crisis Coming. Why Didn’t the Fed?:

Alan Greenspan, the former chairman of the Federal Reserve, proclaimed last month that no one could have predicted the housing bubble. “Everybody missed it,” he said, “academia, the Federal Reserve, all regulators.”
But that is not how I remember it.

Whether the topic is baseball, Wall Street, investment strategies, or a multitude of business concerns, we have the same need – how can we learn to read the data, how can we understand which data is the important/most useful/most critical data, and how can we fight our tendency to go with our gut when the numbers are screaming at us something like this:

“What are you, some kind of idiot?!”

The Power of “Plan B” – Revisiting Moneyball

It happens all the time.  Someone will ask me “have you read _______?”  Frequently, sadly, I have to say “no, I have not read that one.”  It always makes me feel like an uneducated idiot.  After all, I’m the book guy.  If it is important to catch up fast, I make my call – to Bob Morris (our blogging colleague, book-reviewer extraordinaire), and ask, “have you read ____?”  He almost never says “no,” and he tells me enough that I feel like I’ve got a start.

Other times, I say “Yes.”  And it is the truth.

But the best answer I can give is this one (this is when I feel like it’s my lucky day): “Yes, I’ve read it and presented it at the First Friday Book Synopsis.”

Well, recently someone asked me if I had read Moneyball by Michael Lewis.  That was one of the good days.  It was a “Yes, I’ve read it and presented it at the First Friday Book Synopsis” day.  I presented this book back in November, 2003.

Moneyball:  The Art of Winning an Unfair Game is Michael Lewis’ account of the miracle of a very good baseball team, the Oakland Athletics (the A’s), who competed with the big boys with a whole lot less money at their disposal.  It had to do with finding talent that others did not find, reading statistics in  a whole new way, making do with what you could afford – and competing at the highest level.  The lessons for all in business are significant.

I remembered plenty, but in revisiting my handout, I found this summary of a portion of the book’s contents.  This is useful counsel.

Follow these principles:

• When you don’t have the resources, you have to go to plan B

• Find a plan B that works

• There is a plan B that works – if you look hard enough
• Chances are it is not known by the “long-timers’
• Chances are that you have to bring in true “outside help”

• Numbers are more reliable than intuition, tradition, emotion, or…
• or – “who cares how they look in jeans”

• Don’t forget that you are in a competition
• value surprise

• do what works, not what you “like”

• The aggregate is more important than the lone/the individual