THE RUTHLESSNESS OF NUMBERS:

Let's play Moneyball: It started as a conversation and became the book that changed baseball and other sports forever. As it becomes a movie, player turned statistics king Billy Beane and author Michael Lewis meet up where it all began - in Oakland, California (Simon Kuper, 11/11/11, Financial Times)

Innovation hurts. After Beane began using numbers to find players, the A's' scouts lost their lifelong purpose. In the movie, one of them protests to Pitt: "You are discarding what scouts have done for 150 years." That was exactly right. Similar fates had been befalling all sorts of lesser-educated American men for years, though the process is more noticeable now than it was in 2003 when Moneyball first appeared. The book, Lewis agrees, is partly "about the intellectualisation of a previously not intellectual job. This has happened in other spheres of American life. I think the reason I saw the story so quickly is, this is exactly what happened on Wall Street while I was there. You had the equivalent of the old school..."

"The fat mortgage traders at Salomon Brothers," I interject. (Declaration of interest: Liar's Poker explains so clearly what a bond is that it got me through my job interview at the FT in 1994.)

"Yes," says Lewis, "who had high-school degrees from New Jersey and traded by their gut. But they are replaced by hairless wonders from MIT."

Hairless wonders like the young Lewis?

"I wasn't as bright as they were, but, yes, when I came out of the training programme at Salomon Brothers it was pretty clear I was going into the cutting-edge group filled with the people from MIT, as a lesser light, a salesman rather than a trader.

"The intellectuals had an advantage because the securities had got more complicated. The Black-Scholes options pricing model had been invented [a mathematical formula for pricing options developed by two professors, which helped kickstart trading in derivatives]; the guys from New Jersey didn't understand it. And so there was never any question about who was going to win. It was quick and ruthless. The old guys just shuffled off to less and less important parts of the business and that sort of person wasn't hired again."

In baseball, though, the old scouts did find a new purpose. Lewis says, "I never thought scouts were totally pointless, I thought they were just looking for the wrong things. I told Billy: 'If I were you I'd hire a bunch of female journalists who go and find out about the lives of these players. Find out if they're alcoholics, that stuff.'"
"For years Moneyball worked for Oakland. The A's won more games than they lost from 1999 to 2006"

To a degree, this happened. Today a laptop evaluates a player's quality, and the scouts evaluate his personality. They are needed now for their soft skills. [...]

We chat about Moneyball's inexorable spread through all sports. I tell him about the England cricket team's recent victory in the Test series with India. England's coach, Andy Flower, is a devotee of Moneyball. Before the series his statistician, Nathan "Numbers" Leamon, carried out a Moneyball-style analysis of India's great batsman Sachin Tendulkar. "Numbers" discovered that Tendulkar struggles early in his innings to score runs on his "off side" - that is, when the ball is bowled on the side of his bat rather than his legs. In the 22 years that Tendulkar has played Test cricket, nobody had previously spotted this. England bowled to Tendulkar's off side early in his innings, and repeatedly dismissed him cheaply.

Beane is amazed that cricket has only just started doing this analysis. On the shelf behind him, he finds the A's' statistical file for their recent routine series against the Detroit Tigers. The file is perhaps 40 pages thick. Beane leafs to the pages for one of the Tigers' batters, Alex Avila. A chart shows exactly how Avila has fared in each tiny section of his strike zone, and how that varies depending on the phase of his at-bat. The chart looks, as Beane likes to say, like a piece of analysis done at a hedge fund. 

Posted by oj at November 22, 2011 5:52 AM
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