Moneyball - 20 years later

Moneyball was a great book when it was first published, and it still is a good book 20 years later. I want to reflect on the book and what investor should still takeaway from Michael Lewis's ultimate story. 

I first wrote about Moneyball and learning from Michael Lewis in my first blog post in 2007 and another a few weeks later. See "Moneyball and Market Efficiency" and "Learning financial research from Michael Lewis".

I have not significantly changed my views from these two posts; however, I have further developed my thinking by adding structural and behavior aspects to the disruptive thinking of Lewis. Quantitative methods can be disruptive because it can find relationships that others take for granted or assume away. Market relationships are taken for granted because we have behavioral biases. These biases do not easily go away even when they are identified and highlighted. 

Nevertheless, disruptive thinking can learned, so the baseball analysis of 20 years ago may not work today. Opportunities can last for some time because they may be structural in nature, but this is usually the exception not the rule. Opportunities from specific analysis can fall in and out of favor.  Looking for value is not often easy when the objective may be to win today at any costs. If the market is overvaluing certain players, you may have to pay the higher price. 

Success is always about a disciplined approach to following the numbers and not getting caught up with emotions. Excess return is always about seeking disruptive ways of finding value not used by others.