Posted by Jonathan J. Miller -Tuesday, October 11, 2011, 6:30 AM
My wife and I saw Moneyball the other evening and thought it was one of the best movies we had seen in years. I’ve long been a fan of the author Michael Lewis whose books all dot my book shelf and now iPad such as Liar’s Poker, The Big Short, The New New Thing, The Blind Side, The Money Culture, Panic and Next. I just bought his new book, Boomerang.
The Moneyball script was amazing – the movie theatre was packed it was all about its quality dialog and nuance of facial gestures+great acting. Several fits of laughter enveloped the theatre after some hilarious quips.
The premise was how the Oakland A’s general manager came to the realization that a small market team could not compete with the payroll of teams like the New York Yankees and they had to think different (sound familiar?) by taking a fresh approach to the analytics of baseball. The scouts were relying on factors that didn’t really have much to do with a player’s performance. “An ugly girlfriend means no confidence.”
I see a parallel in real estate. (Of course I would since that’s what this blog is about). It’s like the long term reliance of housing price trends as some sort of statement of market health, when in fact, its just about the very last thing an observer should be relying on.
In the movie the metric of vital importance was on-base percentage and runs, not batting average. In housing it is number of sales, not price.