If every armchair sports fans thinks they know better than the others, it stands to reason that most of them are wrong.
The fact that the Oakland A's never won the world series is absolutely not the point. If the market was functioning efficiently, on their budget, they should never have got within cooey of it: The buying power of behemoths like the Mets should have ensured that. What is remarkable - and what is important - is that the A's consistently, massively, exceeded their own expectations.
Sport is a business. I mean that figuratively as well as literally: profit can be measured in dollar terms but also in percentage of wins to losses. Fans seem to forget that. In business, consistently exceeding expectations is an even better thing than winning the World Series, because it necessarily means you've made MONEY. If you're the favourite and you win the World Series, you have only met expectations, and you may even have made a loss.
If baseball were a perfect market, it wouldn't be possible to exceed expectations over a long period. Over a few games, maybe - that could be a fluke. Over two seasons, it almost certainly couldn't be. That means two things: (a) conventional wisdom about the value of certain baseball players and certain attributes is wrong; and (b) The Oakland A's have worked out what is right, or at any rate their model is better than the conventional wisdom.
This is the sort of thing Billy Beane should have kept as quiet about as possible. Michael Lewis' book ought to be a Eureka moment for every baseball manager: if it is, then the market mis-pricing will disappear, everyone will acquire players on the strength of the new valuation methodology and the Oakland A's will gradually fall down the rankings to where they should have been in the first place, given their budget. I dare say that has already started to happen.
What it ought to do is open eyes of managers from other codes, and indeed other businesses: The key is in having sufficient data. If you have enough good quality data (like baseball does) then if your analysis of it is better than your competitors, then as long as your approach is disciplined and consistent, you will, over time, turn a virtually risk free profit. It's called arbitrage.
I haven't even got onto the fact that Michael Lewis is one of the most insightful and witty writers writing in business at the moment, and this book is a pleasure to read from start to finish, notwithstanding my ignorance of its subject. I have read a number of business titles recently, and compared to the rest of the pack Lewis is, if you'll excuse the pun, a major leaguer amongst amateurs.
Highly, highly recommended.
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Lewis was in the room with the A's top management as they spent the summer of 2002 adding and subtracting players and he provides outstanding play-by-play. In the June player draft, Beane acquired nearly every prospect he coveted (few of whom were coveted by other teams) and at the July trading deadline he engaged in a tense battle of nerves to acquire a lefty reliever. Besides being one of the most insider accounts ever written about baseball, Moneyball is populated with fascinating characters. We meet Jeremy Brown, an overweight college catcher who most teams project to be a 15th round draft pick (Beane takes him in the first). Sidearm pitcher Chad Bradford is plucked from the White Sox triple-A club to...