By Robert Seawright, Above the Market
Earlier this week I wrote about the growth of the sports analytics movement, particularly in baseball, as an inevitable outgrowth of trying to make one’s beliefs data-driven and thus reality-based. “Arguments and beliefs that are not reality-based are bound to fail, and to fail sooner rather than later.” I also noted that the investment world needs similar growth and development.
But despite the exponential growth in the use of analytics (earlier this year the Phillies became the last Major League Baseball team to hire a full-blown stats guy), not everyone in baseball (as with investing) has gotten the message. For example, The Book goes into great detail about the percentages and when it makes sense to execute a sacrifice bunt and finds — conclusively — that sacrifice bunts are grossly overused and rarely make sense. Simply going back over previous games so as (a) to calculate how many runs each team scored when it had a runner on first and nobody out, and (b) to compare those results to when teams had a runner on second and one out, makes the general point pretty well. In fact, Baseball Prospectus has a report that shows that sacrifice bunting reduced a team’s run expectancy for innings that played out that way from .83 runs to .64 runs in 2013. The same is generally true in previous years.
Note too that we’re not talking here about difficult concepts or high-level math. It’s just a simple calculation — more teams scored and scored more with runners on first and nobody out by not-bunting than by bunting. Easy.
But not to Texas Rangers manager Ron Washington. Washington likes to sacrifice bunt. In response to a question about the dubious nature of that strategy based upon the math, Washington took offense.
“I think if they try to do that, they’re going to be telling me how to [bleep] manage,” Washington said. “That’s the way I answer that [bleep] question. They can take the analytics on that and shove it up their [bleep][bleep].”
Wow. He even went third person.
“I do it when I feel it’s necessary, not when the analytics feel it’s necessary, not when you guys feel it’s necessary, and not when somebody else feels it’s necessary. It’s when Ron Washington feels it’s necessary. Bottom line.”
Double wow. No matter one’s chosen ideology, if the data doesn’t support it, the risks of continuing on that path are enormous. It’s not the percentage play (by definition). And it’s not the smart play.
Insisting upon a course of action that is shown to be wrong is, quite simply, a recipe for disaster. A good investment strategy, like good baseball strategy, will be – must be – supported by the data. Reality must rule. When it doesn’t, we’re simply bringing the stupid.
Latest posts by Robert Seawright (see all)
- The Great Myths of Investing - 01/15/2016
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