Capsule Review: Moneyball

Moneyball details how creative management of the Oakland A's was able to turn one of the poorest teams in Baseball into a team capable of winning (but in the end, did not) the world series. I'm not really a baseball fan (the only real sport is World Rally Championship!) but there had been a lot of "buzz" around the book as an example of exploiting market inefficiencies in order to get a good return on investment. The book delivers - it calls out the use of the heuristic "rules of thumb" which all industries seem to operate on, in this case, how major league players are scouted. By having a better model for what makes a player good, the A's are able to exploit market inefficiences and pick up players cheap. Once people realize what the players can do, the A's would resell them to other teams as a way of getting new talent. One question I had while reading the book was why the A's let Michael Lewis write it! It seems like the other teams in baseball were becoming wary of dealing with the A's once they had been fooled several times and two teams (Toronto and Boston) were actively putting in place the same sort of systems. It seems likely that the advantage that the A's have had will quickly reverse itself when everyone is using similar metrics and the current market inefficiences are a holdover from decades of baseball history. My overwhelming sense while reading the book was that this was a once in a lifetime opportunity to be ahead of the curve but only for so long. On the other hand, the methods the A's used will probably change baseball in the long term. In terms of larger lessons to be learned, it's a mixed bag. Everyone is applying efficient markets to everything these days (the Terror market, the Hollywood stock exchange, etc). The thing that makes baseball unique is that alot of objective (and not so objective) statistics about the game have been collected and these things can be judged very objectively (wins, runs). There are other less objective aspects (like optimizing for the short versus long term) which are similar, but most enterprises don't have good statistics about the way business is run and maybe that should be the real point of the book.