The film Moneyball is about baseball. But it’s equally about the investment strategy that has made the clients at Abacus successful. Billy Beane, the Oakland A’s manager, selected the best players based not on their appeal, but strictly on the numbers. There’s a scene in which all the scouts gather in a room to voice their opinions about which players to draft. It’s similar to a room of investment analysts who debate the merits of buying Apple or Google.
Despite the evidence that these discussions haven’t produced success (because they are based not only on numbers but also on intuition, opinion, and instinct), the investment world is still very committed to analyzing stocks in this emotional way. It may be exciting to spar over Apple or Google, but that is not a proven winning strategy for investing.
Our objective at Abacus is not to produce excitement, but to produce results. We do this by analyzing the numbers, based on historical evidence, just as Billy Beane did. If you want to hear more about our results and historical performance, contact us by replying to this email.
I’ll give Billy Beane the last word: “It’s all about evaluating skills and putting a price on them… Stockbrokers used to buy stock strictly by feel…Anyone in the game with a 401(k) has a choice. They can choose a fund manager who manages their retirement by gut instinct, or one who chooses by research and analysis. I know which way I’d choose.”
May you be prosperous and happy.
