Here are three things I think I think about the Nationals winning the World Series¹:
1) Patience. Prior to the 2019 MLB season the Nationals were 18/1 odds to win the World Series. It was always a long shot, but there was never doubt that this team was pretty good and arguably the best team in the National League East. After all, despite losing their superstar, Bryce Harper, they’d been wise in picking up Patrick Corbin and Anibal Sanchez and bolstering their main 2018 weak spot – starting pitching. But even these changes gave them just a 5% chance of winning the whole f’in thing. But they also weren’t a bottom of the basement team.
(Nationals’ Odds to win the World Series – Predictwise)
On May 23rd the Nats lost their fourth game in a row against the Mets dropping their record to 19-31. That put them in a tie for the second worst team in MLB. It made no sense. Yes, they weren’t favorites to win it all, but they also weren’t this bad. The lineup and historical stats just didn’t add up. After all, this was a team that had won 50.6% of their games in 2018 and essentially maintained their offense in the offseason and bolstered their pitching. While they weren’t necessarily a World Series team they statistically shouldn’t have been a 38% win team.
The nice thing about baseball is that the data sets are huge. 162 games. Man, that was a lot of naps for me.² And while they were a 38% win team during the first fifty games they were a 57% win team by the end of the season. That made more sense. But it took time and patience for things to play out. And just like the financial markets, that’s so much of what life, and baseball, is – waiting for things to play themselves out so the probabilities can reinforce themselves over time.
In the financial markets I am constantly bombarded with news and noise about short-term performance. “The stock market was down 1% today.” “Bonds are down 2% this year”. “The Nationals have lost 4 in a row.” WHO CARES? Yes, the long-term is a series of short-terms, but you have to let all those short-terms play themselves out because that’s how the probabilities reinforce themselves over time.
2) The Numbers don’t tell the whole story. The unsung hero of the Nats’ season is Gerardo Parra. Parra is a backup outfielder who was released by the Giants in May and picked up by the Nats as they were struggling. Parra changed the whole dynamic in the clubhouse. When he would pinch hit Parra’s walk up song was the annoyingly fun Baby Shark song. And when Parra hit a few clutch home runs early in his stint with the Nats he would dance all the way through the dugout. His emotions were infectious. Before they knew it, the Nats were playing better, the stadium was rocking Baby Shark and the dugout famously danced every time a home run was hit.
In an era where analytics have come to dominate professional sports the intangibles were reinforcing themselves. Behavior mattered again. You know where I am going with this. In the financial markets it doesn’t matter how rock solid your numbers are. I don’t care if you know, with a high probability, that the stock market will generate 5-7% over long periods. If you can’t maintain your behavior the analytics don’t matter. The numbers never tell the whole story. Life, like a baseball season, is messy and emotional. Reality needs to account for that.
3) There’s more to life than money. The Nats could have spent $330MM to keep Bryce Harper. Or they could have kept that money and reallocated it to more pressing needs. Honestly, keeping Harper was the easy choice. It was the choice that would have sold more tickets, sold more gear and kept the fan base happy. But it was also a bad baseball move because Harper’s contract would restrict other potential high payoff moves. Was he worth it? In a financial sense, yes. 100%. In a baseball sense, maybe not. The Nats chose baseball over money. Harper chose money over baseball.
Sometimes in life we have to choose to put money second. We work less to spend more time with our family. We choose balance over slaving at work. We don’t buy the high probability money earning investment because it’s more fun to invest the money in a hot dog at a baseball game than it is to invest in stocks. Don’t get me wrong. Money is important. Money will make your life easier. Money might even make you happy. But as cliche as it is, there’s more to life than money. You can’t repeat that enough.
¹ – I might live in San Diego, but I grew up in Washington DC. Which reminds me of a fourth thing I think I think – enjoy where you are in life, but don’t ever forget where you came from.
² – As I get older I find that I enjoy baseball and golf more and more because they mesh well with two things I’ve learned about professional sports – 1) don’t get too emotionally/personally invested in a sport and just enjoy the event for the event; 2) napping during sporting events is important. Baseball and golf are perfect for this because you can nap in the middle of the event, wake up and not miss a beat.
NB – Here I am with the boss at the epic game 5 against the Dodgers where we won in extra innings with the Kendrick grand slam. Lucky I got out of there alive. Just kidding, the Dodgers fans were gracious and awesome.
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.