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Finding the Stock Market's Moneyball

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October 04, 2011 – Comments (0) | RELATED TICKERS: AAPL , CROX , MSFT

 recently saw the movie, "Moneyball", which starred Brad Pitt playing the roll of Billy Beane (General Manager of the Oakland A's). I must say it was one of the best movies I have seen in years. And there wasn't even anything that belew up during the two-hour movie. Nonetheless, that movie was riviting, and as a baseball fan, I remember reading and following the Oakland A's back in 2002-2003 when they were defying the odds. 

But what Beane did with the Oakland A's is transform baseball in a major way. You see, we are all enamored with the home-run hitters. We associate the best players in the game with those who crush the most number of balls over the outfield fence.

Rarely does people consider a player like Alex Avila, the catcher from the Detroit Tigers with a .389 on base percentage, or Jose Reyes with only 7 home runs, managed to finished 15th in the league with his impressive OBP. Both of which are higher than Curtis Granderson and MarkTeixeira of the Yankees who hit 41 and 39 home runs (second and third best in the MLB) but neither of which got on base more than Avila and Reyes.

Or how about the guy most consider past his prime who manged to get walked 15% of the time he went at bat: Bobby Abreu, or Dexter Fowler who both managed to do the same, finishing with only 13 home runs between the two of them, yet both have on base percentages that were equal with the best home run hitters of the game. 

Billy Beane understood this concept, ignored the high-priced flashy baseball players and instead fielded a team, with 'has-beens' and rejects that nobody else wanted and in the process changed the game itself. 

With that said, what lessons, can be taken from what Mr. Beane did and how can we apply them to the stock market and the manner in which we trade?

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