Thursday, February 15, 2007 6:28 AM
Last month, I finally got around to reading a book that has been on my "to-read" list for about two years: Moneyball: The Art of Winning an Unfair Game by Michael Lewis. The book looks at the success of the Oakland Athletics under the direction of General Manager Billy Beane and his staff. A success enjoyed even while the team labored under the supposed disadvantage of a very small payroll in comparison to the New York Yankees of the world. By my reading, the two central themes underlying this success were focusing on baseball statistics in gauging a player's potental and applying this analysis in conjunction with a simple set of guidelines, as follows:
1) "No matter how successful you are, change is always good...There can never be a status quo. You have to always be upgrading."
2) "The day you say you have to do something, you're screwed. Because you are going to make a bad deal. You can always recover from the player you didn't sign. You may never recover from the player you signed at the wrong price."
3) "Know exactly what every player in baseball is worth to you. You can put a dollar figure on it."
4) "Know exactly who you want and go after him."
5) "Every deal you do will be publicly scrutinized by subjective opinion... Everyone who ever picked up a bat thinks he knows baseball. To do this well, you have to ignore the newspapers." [taken from Fund Manager Whitney Tilson's great 2003 article Investing From the Ball Field]
One of these days I would like to talk a little more about the book, as I thought it was a great read. For now, you can get the crib notes via the Wikipedia entry, Moneyball: The Art of Winning an Unfair Game.
In any case, my first reaction to Moneyball was less about the statistics and more about the guidelines; and I immediately thought about their application to investing and the stock market (some of them do seem to be vintage Warren Buffettisms). Others, however, were drawn more to the statistical assessment strategies Oakland has applied. One of those people appears to be Jim Chen, who is a contributor to the MoneyLaw blawg...and the new Dean of the Louis D. Brandeis School of Law at the University of Louisville, which happens to be a place I spent three years myself years ago (and I still miss the Spring meets at Churchill and Keeneland).
In introducing MoneyLaw back in August, Dean Chen's initial post, MoneyLaw: The art of winning an unfair academic game, included a brief overview of the idea of "MoneyLaw:"
Inspired by Michael Lewis's book, Moneyball: The Art of Winning an Unfair Game, many law professors have pondered the extent to which this profession can learn from Billy Beane's approach to winning baseball games for the Oakland Athletics. Four of those professors -- Jim Chen, Tom W. Bell, Paul Caron, and Ronen Perry -- will now discuss the ways in which Moneyball's emphasis on quantitative assessment of baseball-related performance can inform law school governance, academic rankings, and the overall mission of legal academia.
Whether Dean Chen will work to apply some of the MoneyLaw ideas at Louisville I don't know. But, I, for one, will keep reading MoneyLaw just to find out.
p.s. If you have not already read it, add Moneyball to your own "to-read" list. You won't be disappointed.