baseball

Hit ’em Where They Ain’t

© Can Stock Photo / dehooks

Investors can learn a lot from Willie Keeler, one of the smallest major league baseball players in history. Wee Willie stood 5’4” and weighed 140 pounds.

Playing from 1892 to 1910, Willie was a prolific hitter, with a batting average of .345 over that long career. He explained his success with words that have become part of baseball lore:

“Keep your eye on the ball, and hit ‘em where they ain’t.”

We believe it makes sense to strive to understand investment opportunities, researching companies, trends, and economic developments to try to gain an edge. This is what it means to “keep your eye on the ball.”

As contrarians, we seek to avoid stampedes. If the crowd is there, we probably want to be somewhere else. As Warren Buffett once said, “be greedy when others are fearful, and fearful when others are greedy.” Isn’t this the investment version of “hit ‘em where they ain’t?”

It would be interesting to know whether Wee Willie Keeler did any investing. Did his investing philosophy match his baseball hitting philosophy?

We cannot know the answer to that. But we do know, our investing philosophy matches up very well. “Keep your eye on the ball, and hit ‘em where they ain’t.”
Clients, if you would like to talk about his or anything else, please email us or call.


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

All investing involves risk including loss of principal. No strategy assures success or protects against loss.

Take Me Out to the Ball Game

© Can Stock Photo Inc. / dehooks

Thirteen years ago, Oakland manager Billy Beane turned the world of professional baseball on its head. As depicted in the movie Moneyball, Beane knew that the Oakland Athletics didn’t have the budget to compete head to head with better-funded teams from larger markets. He looked to advanced statistics to give him an advantage, realizing that baseball’s conventional wisdom did a poor job of judging player performance. Traditional baseball skills like speed and contact hitting were being overvalued, while game-winning skills like patience at the plate and slugging power were being undervalued. By focusing on what really mattered over what was popular, Beane was able to find the best bargains in the baseball universe.

While many baseball franchises grudgingly followed suit after Beane, traditionalist manager Ned Yost has stuck to the old wisdom. Under him the Kansas City Royals have broken every rule set forth in Moneyball, emphasizing speedy contact hitters who will swing at anything to get the ball in play and steal bases at the slightest opportunity. Despite that, he’s taken the Royals to two consecutive championships and a long-awaited World Series pennant, leading some fans to hail his success as the death of Moneyball-style statistics.

In fact, Ned Yost apparently took to heart the one true lesson behind Moneyball: never follow the crowd.

The Oakland Athletics were able to win because they turned aside from what “everybody knew” about baseball. After their successes were highlighted by Moneyball, what “everybody knew” changed. When everybody else started chasing after the same statistics that led the Oakland A’s to victory, they started undervaluing old-fashioned baseball skills like speed and contact. Ned Yost ignored what “everybody knew” about those old baseball skills and built a great team around them.

Billy Beane is fond of comparing the baseball world to investment markets, and the comparison is an apt one. Both baseball and investment markets are prone to cycles as people chase after the crowd—creating opportunities for those who avoid the common wisdom of what “everybody knows.” The Royals’ pennant is a testament to the value of going against the grain.


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.