Does Moneyball Give a Gliimpse of How to One Up Wall Street?

I realize that not everyone is a reader. When I interviewed the famed British illustrator Ralph Steadman (think of Hunter Thompson's Fear and Loathing in Las Vegas for example), I mentioned that I had started as an artist and became a writer. He replied that he started as a writer and became an artist, "because no one reads anymore."

Near two decades have passed, and the readers of this world still love their books. Many of us have not only read 50 or a hundred books a year most of our lives, but we've read many of those books more than once and as many as four or five times possibly.

I bring this up because I am currently reading, for the second time, Michael Lewis' Moneyball. After my first reading it was made into a movie starring Brad Pitt and Philip Seymour Hoffman. Now, near 20 years later, I am seeing it with new eyes, not as a baseball fan but from the point of view of an investor. 

The book is about how baseball historically came to place value on certain factors that statistics actually proved were backwards. Billy Bean, who had been drafted as a most-likely-to-succeed superstar, is at the center of this story about the Oakland Athletics. Bean is GM, the decision maker regarding the makeup of the team. His experience as a failed potential superstar gave him an insight into the game that most front office folks could never recognize. 

How this applies to investing is obvious. The conventional wisdom is that the prices of stocks (which represent partial ownership of companies) are fairly valued by the market. That is, if the price of one share of a company is seventeen dollars, the company's true value will generally correspond with that in the aggregate of all its shares. Or more correctly, the price of a share will correspond to the future earnings based on risks and potential rewards.

If this is so, how then does a bridge player  from Omaha do so phenomenally better than a majority of others when purchasing portions of company's shares? How does he succeed where others fail? 

It may be like the story in Moneyball. Conventional wisdom is safe but backwards. Warren Buffet made a name for himself by (a) doing more homework than the herd, and (b) by using a different set of measurement tools.

I like the illustration of the herd because it corresponds to life as a zebra on the Serengeti. There is safety in the herd. The reason is that to leave the herd is to become vulnerable to the lions. 

The problem for the zebra in the herd, though, is that the grass gets shorter and shorter. Outside the cluster of zebras in the herd there is ample food, but how retrieve it and enjoy it without risk of become food oneself? 

Somehow Warren Buffet is getting outside the herd and avoiding the lions as well. How he does this is not my point. The point is that there are opportunities available by shucking off conventional wisdom. This is what Billy Bean did because he saw with great clarity how wrong the "experts" were about him.

I once published an article titled "Who Are Your Experts?" in which I challenge people to think for themselves, or at least recognize that when choosing experts you are ultimately responsible for the choices you make. 

Desert Storm was another example of how the conventional wisdom was wrong. Experts were saying that we were about to enter a protracted war with Saddam Hussein that would end up as another Vietnam. Instead, Iraq capitulated in 100 hours. (This was Desert Storm under George Herbert Walker Bush.) There were many lessons for both businesses and investors from that brief war.

* * * *

The subtitle of Moneyball is, The Art of Winning an Unfair Game. Wall Street, which Michael Lewis has also written about in the past, is also considered by many to be an unfair game. Can the lessons Billy Bean learned about player valuations be transferred to the Street? 

To some extent it may be possible. When everyone loves a stock because of the personality of its leader or for any other reason trotted out by the media, it valuation goes up, and likely exceeds its real value. The diamonds in the rough, like some of the players with apparent flaws -- a pitcher with a quirky delivery, for example -- may be neglected and undervalued, until someone notices that they have been consistently making a boatload of money for years, and with no end in sight.

All decisions involve weighing risks and rewards, and learning how to identify what has real value and what only has the illusion of value. Be wise.

Field of Dreams and Memories

I was born in Cleveland in 1952 , a year in which the Tribe--as the Cleveland Indians were called--had the best starting rotation in baseball, three of whom would become future Hall of Famers. My parents must have been baseball fans because they named the four teddy bears in my crib after those four pitchers. my favorite being a black white bear with skinny arms and legs called Feller.

Bob Feller was a famous fireballer with a classic story of heart and heroism. His roots were middle America, a small town Southwest of Ames Iowa.

Iowa is also where the film Field of Dreams takes place. The movie, starring Kevin Costner, was based on the novel Shoeless Joe by W.P. Kinsella. 

* * * 

Recent events brought to mind this memory from the first year after we moved to Duluth in 1986. I'd landed my first full time job as a writer. My boss, himself an excellent writer, introduced me to another writer friend and the three of us--Terry, Art and I--attended several monthly readings by authors flown into town by a prof in the lit department of UMD. One of these notables was W.P. Kinsella.

Kinsella began by describing his childhood and how he came to be a writer. He said that his family lived in a remote area in Canada Northwest of here. It was so remote, in fact, the the nearest family with children was a hundred miles away and he was, if memory serves me well, an only child. This led to his developing the fertile imagination which produced his literary career as a storyteller.

You may recall that the lead character in Field of Dreams, played by Costner, is an Iowa farmer named Ray Kinsella. It's a character who is misunderstood, and in some ways a product of the Sixties, which left a lot of us misunderstood. The following conversation between Ray and his wife Annie (Amy Madigan) is part of the story's setup.

Ray Kinsella: I think I know what "If you build it, he will come" means.

Annie Kinsella: Ooh... why do I not think this is such a good thing?

Ray Kinsella: I think it means that if I build a baseball field out there that Shoeless Joe Jackson will get to come back and play ball again.

Annie Kinsella: [staring in disbelief] You're kidding.

Ray Kinsella: Huh-uh.

Annie Kinsella: Wow.

Ray Kinsella: Yeah.

Annie Kinsella: Ha. You're kidding.

James Earl Jones, Ray Liotta and Burt Lancaster, in his final screen performance, are also part of this saga that echoes the magical realism of Jorge Luis Borges, one of my all-time favorite authors.

All this is just an excuse to share some photos from the Field of Dreams location in Iowa that was created for this movie. And maybe an excuse to take a trip down memory lane.

Photos courtesy Gary Firstenburg

Here's a link to his website. Ye shall be impressed.

www.firstinphoto.smugmug.com

FWIW
My short volume of stories titled Unremembered Histories falls into this genre of supra-normal, magical realism. Subtitled Six Stories with a Supernatural Twist, you can find it here on Amazon.

TRIVIA: If I were ever to have my stories turned into an audio book, I would have James Earl Jones be the one to read it. I just love that deep baritone vibe. Thank you, Mr. Jones, for your contribution toward make this film a very special experience.

The Longest Rivers in the United States

Louisville on the Ohio River

I started watching Ken Burns' documentary of the Lewis and Clark expedition that had been commissioned by Thomas Jefferson. When they first began preparing for the trip the Louisiana Purchase has not yet taken place and when it finally did, these were the first men to see what Jefferson had purchased.

Their journey, which began in 1804, took them up the Missouri River through Iowa, Nebraska the Dakotas and Montana, then across the Rockies with the final destination being the Pacific Ocean, which they reached in November 1805.

The purpose of this little blog post isn't to summarize the Lewis & Clark expedition, but rather to briefly talk about rivers. 

It's astonishing how much has changed in little over 200 years. I can't even imagine what the world will look like 200 years from now or how history books will describe this period. Back then there were no roads yet. Rivers were the roads of yesteryear. When we reflect on all the major cities in our country you'll notice how they sit at the edge of bodies of water--oceans, lakes and rivers. Philadelphia, New York, Chicago, St. Louis, Cleveland. In fact, look at the list of cities with an NFL football team and nearly all can be found with a waterway at their feet. (Desert-bound Las Vegas is probably the one exception, though its proximity to Lake Mead and Hoover Dam resolves that problem.)

A bridge across the Mississippi in Minneapolis

While Abe Lincoln was a young attorney in Illinois he saw the future of transportation when he became involved in a lawsuit between riverboats and a railroad bridge. The bridge was blocking the ability of the riverboat to service the river. "Bridges are not welcome here!"

Lincoln spent time studying the issue and came to realize that railroads were the future and somehow a compromise would have to be achieved. It could never be either/or. Years later, this experience as a young man became a see that flowered, leading to the ambitious transcontinental railroad initiative.

* * * 

So, this is a trivia game. What are the ten longest rivers in the United States? What I will do is list them here in the incorrect order. See if you can list them in their correct order. I think you'll be surprised.  

Rio Grande River

Red River

Columbia River

Yukon River

Ohio River

Missouri River

Colorado River

Mississippi River

Arkansas River

Snake River

 * * * 

The Duquesne Incline in Pittsburgh, above the Monongahela.

Photos courtesy Gary Firstenburg

Here's a link to his website. Ye shall be impressed.

www.firstinphoto.smugmug.com

Missouri (2341 mi.), Mississippi (2202 mi.), Yukon River (3190 mi.) Rio Grande (1759 mi.), Colorado (1450 mi.), Arkansas (1443 mi.), Columbia (1243 mi.), Red (1125 mi.), Snake (1040 mi.), Ohio (979 mi.)

Related Links
Rivers!
The One River, Many Stories Project
Watching the River Flow: Dylan Wrestles with His Inner Self

The Spanish Inquisition Had a Chilling Effect on Freedom of Speech

"Nobody expects the Spanish Inquisition!"

One of the memorable episodes from the old Monty Python Flying Circus featured several Spanish Inquisition sketches. Each begins innocuously until someone says, "I didn't expect the Spanish Inquisition" whereupon three bumbling priests in 15th century garb burst into the room, Michael Palin snarling, "Nobody expects the Spanish Inquisition. Our chief weapon is surprise."

Whereas the skits were hilarious, the actual Inquisition was anything but. 

I turned to Wikipedia for a refresher course on this period of history. I learned here that the Spanish Inquisition was established in 1478 and lasted 300 years. What I was unaware of -- was it downplayed by historians? -- was that Ferdinand II and Isabella I were the ones who commissioned the Inquisition. If those names sound familiar, they should. Ferdinand and Isabella were the the monarchs who commissioned Columbus on his mission to India by traveling West.

The Wikipedia account contains a lot of detail about the various stages of the Inquisition, including objectives and statistics. There is a breakdown of how many were prosecuted (150,000), how many were executed (3000 to 5000) and the ratio of their offenses (Protestants, Orthodox, Sodomites, blaspheming Catholics, etc.) 

As I read this information, I got the impression that some people could argue that the numbers weren't all that bad. Three to five thousand executions in three centuries is only 10 to 17 executions per year. Stalin, Hitler and Mao killed millions. The U.S. killed more than three-to-five thousand unarmed citizens at Hiroshima and Nagasaki without a trial or even a warning.

True enough, but consider this. Consider the atmosphere of a society where your livelihood, and even your life, may be at risk at any moment if you get accused by your neighbor. In other words, your family's well-being is at risk at any moment because you may say the wrong thing at the wrong time. Maybe your lose your temper, or simply have a lapse of judgment and express something against the Pope. Suddenly, the PC Police (neighbors) are making notes, and the next time the Grand Inquisitor is in the neighborhood, your name comes up.

It may be something you said 20 years ago and you don't even remember it. You may not even have those feelings or views any more, but under the Inquisition (the rack stretching your bones apart in order to aid your memory) you do recall having made that gesture to a priest or snarky comment about the Pope, or whatever else was not politically correct at the time.

* * * 

Our current culture is quite far from the ideal when it comes to freedom of thought and freedom of speech. Some topics are so controversial that I am uncomfortable listing them here. There are questions we are afraid to ask. There are topics that people have been criticized for even writing about. 

When I Googled the question >>what are some topics we can no longer talk about publicly<< The first answer delivered was 11 Things You Can't Discuss in Public Anymore.*  One can quibble over particulars but the list does show that we haven't arrived at the free thought society mathematician/social critic Bertrand Russell was fighting for.

When Russell expressed his concerns about these matters 100 years ago, the list of objectionable topics may have been different but it was no shorter. 60 years ago Lenny Bruce was hounded to death for challenging the limits of free speech. 

* * * 

Though free speech is protected in our nation's Bill of Rights, we all know that there are limits. We do not have a right to shout "Fire! in a crowded theater. Unfortunately, there's an increasing tendency to tar-and-feather people on an ever widening array of topics. 

I know we're supposed to be optimistic going forward, but in order for us to solve many of our problems we need to have the freedom to discuss issues openly without fear of retribution. The temper of our times seems to be in opposition to such a proposal as this. 

* * *

Related Links

Monty Python's Fandom Page on The Spanish Inquisition

A Monty Python Spanish Inquisition Sketch on YouTube

Why Our Current Cancel Culture Is a Clear and Present Danger 

Bertrand Russell's Free Thought and Official Propaganda Has Much to Say About Our Current State of Cancel Culture

 

*This is used as an example only. I do not know this person and share it for illustrative purposes.

Eleven Minutes Is All It Takes. Go Browns

"At some point, and I really don't know when, the city of Cleveland became one with its football team. Together they rise and fall, in victory, in defeat. It's inseparable. For better or worse, the Browns are Cleveland." --Opening lines of the History of the Cleveland Browns

In the first ten years of the Browns franchise, the Cleveland Browns won 84% of their games and won seven titles. The team was organized in 1946 and many, if not most, of the players were just back from military service. Paul Brown was a tough disciplinarian, but these guys weren't intimidated by that. Football, compared to combat, was a piece of cake.

The Browns were charter members of the All-America Football Conference which began in 1946. They won the AAFC title in every year of its 4-year existence. The had a 29 game winning streak that went from late 1947 to 1949. They never lost a game in 1948 and finished the season 14 and 0.

In 1950 the Browns joined the NFL and they were ready. All the sportwriters picked the NFL 1949 champion Philadelphia Eagle to win. They assumed the Browns domination of the AAFC was due to the weak competition. NOW they would play real football teams.

Haha. Browns crushed the Eagles 35 -10. The Browns were emotionally ready to show the NFL that they were not a fluke. Marion Motley running back led the league in rushing. The defense led the league in fewest points allowed with 55 takeaways under their belts. 

Paul Brown was one of the great coaches of all time and some of the game's other great coaches years later had been players for Brown and his Browns: Don Shula and Chuck Noll. (I touched Chuck Noll's mailbox once in suburban Pittsburgh. I was walking with someone who said, "Chuck Noll lives there." Such an ordinary nice house in an ordinary nice neighborhood.) 

Paul Brown was the greatest innovator in football coaching history. It was he who invented the concept of the playbook. He famously said, "Football is played with the mind as well as with the heart."

* * * 

According to a Wall Street Journal study of four recent broadcasts, and similar estimates by researchers, the average amount of time the ball is in play on the field during an NFL game is about 11 minutes.

This afternoon the Cleveland Browns will be playing the Kansas City Chiefs in Round 2 of the playoffs. Two talented young quarterbacks will be on display here, Pat Mahomes and the Browns' Baker Mayfield. The Chiefs are favored, but Browns fans are undaunted. Something historical can happen on any given Sunday.

A Man Convinced Against His Will...

Photo by Sean Thomas on Unsplash

Very early in life I remember my mother saying, "A man convinced against his will is of the same opinion still." I remember it because Mom this was one of quite a few sayings that she repeated from time to time.*

I don't recall the context, but she was full of pithy sayings that she'd pulled from the Elbert Hubbard Scrap Book, which was essentially a collection of sayings, quotes and anecdotes that he'd collected over the course of a lifetime. We had the hardcover edition  from 1923 that looked like this.

This quote came to mind many times in recent months as I observed the clash of conflicting views on nearly every topic being debated now on the national stage. 

What's disappointing to me is that there does not seem to be a real effort to reach out and build bridges in order to gain an understanding of opposing views. This is especially the case in the Cancel Culture of mob discipline in which many people -- generally those not accustomed to fighting -- have been battered into silence. 

I'm curious to know if in Washington there might be legislators on both sides of the aisle who want to quietly address real issues, but fear being "cancelled" by the extremists in their parties? 

Is it my imagination or does the media thrive on generating this adversarial atmosphere? If yes, then what we have is a situation in which they are incentivized to create agitation rather than incentivized to help us better get along. This is not a healthy situation. 

My heart is heavy about what's going on. One can only hope that there are people in positions of influence behind the scenes who are quietly working toward solutions for taming this seemingly out of control dragon.

* * * 

HERE ARE SOME MORE QUOTES FROM ELBERT HUBBARD

--Every man should have a college education in order to show him how little the thing is really worth. The intellectual kings of the earth have seldom been college-bred.

--Never explain — your friends do not need it and your enemies will not believe you anyhow.

--If men could only know each other, they would never either idolize or hate.

* * *

According to Cliffnotes, the saying was popularized by Dale Carnegie in his book How to Win Friends and Influence People, though its origins are much earlier.

* * *

Meantime, life goes on...

* Here is another of my mom's favorites: "Oh what a tangled web we weave when first we practice to decieve."

Flashback Friday: The Ox-Bow Incident Is a Cautionary Tale for Our Times

“Why do you keep asking me all these questions? You don’t believe anything I tell you.” 

~Anthony Quinn, the accused

I first read The Ox-Bow Incident perhaps three decades ago after reading Walter Van Tilburg Clark's The Track of the Cat. After giving it a second reading as an audio-book a few years back I watched the film starring Henry Fonda, among others.

It's a film about a lynching. It details the manner in which horrible injustices can occur based on heated emotions, rumors and innuendo. 

Today, the spirit of the lynch mob has once again reared its ugly head. It's now called cancel culture. People may not be getting lynched in a literal fashion, but reputations are being smeared and careers damaged. What follows is the review I wrote about this story and film in 2012.

* * * 

Raymond Burr made a name for himself playing the attorney Perry Mason in the early Sixties television series. Courtroom dramatics are featured in many Hollywood films as well. An orderly, fair trial for the accused is one of the foundations of a civilized society and all the procedures for helping to insure justice are an essential part of it. 

As any alert and educated person has observed, our current legal system has many flaws, but the French Revolution shows us how frightening our prospects can be when the pendulum swings the other way and we yield to mob justice. The establishing of reliable factual evidence is one of the basic features of a fair trial. Walter Van Tilburg Clark's The Ox-Bow Incident vividly reveals what happens when due process is scuttled in favor a fast result. Published in 1940, it was but three short years before the film reached the silver screen. 

THIS REVIEW CONTAINS SPOILERS 

Hollywood's 1943 Old West re-telling of Clark’s novel is one of many great films in which Henry Fonda fights for justice. In 12 Angry Men we find him cast as a single juror who insists that the easy way out, conviction of the accused, is not warranted until all the evidence is fully examined. In The Ox-Bow Incident, the mob assumes the role of judge and jury, reacting emotionally to a situation based on baseless hearsay. Both films reveal how easily injustice can occur.

Henry Fonda and Harry Morgan 

The Ox-Bow Incident is a black and white Old West drama that takes all of 75 minutes to thread the needle. There are almost no side stories. The plot moves straight forward from the opening scene to its tragic conclusion. 

 

In addition to Fonda we also see a young Henry Morgan, later of Dragnet and M.A.S.H. fame, as well as Anthony Quinn in one of his earliest roles. 

 When I read the book many years ago it made an impression on me. I discovered it after having read The Track of the Cat, another story by Clark that takes place in the Old West. An early line in the movie hints at one of the recurring themes in both these stories. “Why do you suppose he’d be living in this neck of the woods if he didn’t have something to hide?” Fonda declares. 

The Old West was society's fringe. As a kid I liked westerns with gunslingers and shootouts. Hopalong Cassidy was a good diversion. This film is quite distant from your O.K. Corral type of film. No High Noon, no 3:16 To Yuma. No Peckinpaugh bloodletting. It’s a simple story about the consequences of misinformation and mob rule. 

You can be sure this kind of tragedy has played out all over and not just in the Wild West. It happened right here in Duluth in the 1920s. A mob of 1,000 took the law into its own hands, broke into the jail and hanged three black men on one dark night that has now been memorialized as a reminder that we ourselves are not immune to horrific injustice. There was no evidence beyond hearsay and, like this film, there was no happy ending. 

 

One reviewer on imdb.com stated, "The Ox-Bow Incident is a fantastic film. I don't think it's well-remembered now, but I'm thrilled to see it on DVD and hope that it will be rediscovered.” I agree.

Related Link

The Lynchings in Duluth by Michael Fedo