April 30, 2007
One more thing about the book Moneyball: why aren’t the other baseball teams employing the same tactics as the Oakland A’s? I can’t believe that seemingly smart, well-educated and/or rich (they can hire advisers) people can regularly make dumb mistakes. Michael Lewis, the author, argues that baseball is an insulated world of egotistical insiders that are personally, emotionally committed to the old ways of baseball. They hate nerds with computers wielding strange statistics. Consider another field… investing. If most economists agree you can’t beat the market in the long-term, why do institutional investors continue to pour money into actively managed funds instead of indexes? One of them must be wrong. For most of my life I just assumed those presumably smart people knew something I didn’t. In the last few years I’ve had serious doubts. It’s disconcerting to realize that most everyone is an idiot. Where are all the smart people hiding?