One of the great books on investing is not about investing in stocks. It’s about investing in baseball players. The now well-known strategy discussed in Michael Lewis’ Moneyball tells how A’s GM Billy Beane created an edge by using statistics overlooked by other managers. The league has since caught up to Beane but there may be a new way to find some value. The WSJ’s CIO Journal reports:
New technology being tested by Major League Baseball this year could provide Oakland Athletics general manager Billy Beane with new ways of evaluating players. The new technology relies on clusters of high performance cameras abetted by software to provide data on every action on a baseball diamond. Mr. Beane, known for pioneering the use of advanced statistics to develop a successful baseball team despite having significantly lower budgets than his competition, says he’ll use the new pool of data to help his organization evaluate players.
In the early 2000s, statistics like on-base percentage were “undervalued,” Mr. Beane says; today OBP is widely understood, to the point that the A’s cannot afford most players with high OBPs, forcing Mr. Beane to look elsewhere for an edge. “The idea that you can create a template that will work forever doesn’t happen in any business,” Mr. Beane told CIO Journal during a phone interview. “There’s some really, really bright people in this business. You can’t do the same thing the same way and be successful for a long period of time.”
The A’s have already begun tracking different types of data about player performance, and have developed proprietary algorithms used to evaluate that data. The new technology will create a new data set that Mr. Beane and his team can throw into the mix, he said. “In today’s world, and baseball included, you have access to so much data. We’ve got to use every piece of data and piece of information, and hopefully that will help us be accurate with our player evaluation. For us, that’s our life blood,” he said.
While every team will have access to this data, Mr. Beane hopes it will still provide the A’s with an advantage other teams don’t enjoy. “Ultimately what you do with it is proprietary.”
Read more here.
E.J. Smith - Your Survival Guy
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