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Picking Winners Is a Losing Game – Lessons Learned From Moneyball

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The success of Moneyball, made famous by the Oakland A’s, could only be achieved by thinking differently, re-inventing a player’s worth and focusing on value. Ultimately, it relied on facts and fundamentals and disregarded the unknowable future.  

Despite its reference to money management, however, such an approach has largely been ignored by traditional asset managers who continue to look for an edge. Overly confident in their ability to pick winners, these managers assume they have some predictive ability and knowledge of the future. And clearly, no one has that. Worse, this outdated approach fuels a portfolio mispricing risk that can significantly erode returns over time.  

 

We believe that instead of trying to pick winners, portfolio managers should simply avoid the losers. Like the A’s, they should focus on the numbers—the known information—to avoid strikeouts in the market or on the baseball diamond. This presentation will cover:  

  • How to apply a Moneyball approach to investing and portfolio management.  
  • How traditional portfolio managers are exacerbating a portfolio mispricing risk caused by irrational human behavior.  
  • And, how to get your clients to focus on the right question, the question very few are asking: How can we avoid the losers?

CFP, CIMA®, CPWA®, CIMC®, RMA®, and AEP® CE Credits have been applied for and are pending approval.

Sponsored by

 

 

 

Julian Koski

Co-Founder and Chief Investment Officer

New Age Alpha

 

Andy Kern, PhD

Senior Portfolio Manager

New Age Alpha

 



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