April 14, 2016

MONEYBALL IS JUST THE EXPLOITATION OF MARKET INEFFICIENCIES...:

The Golden State Warriors Have Revolutionized Basketball : Team executives saw the 3-point line as a market inefficiency and unleashed Stephen Curry to exploit it (Ben Cohen, 4/06/16, WSJ)

[T]there is another tale to be told about the Warriors. It involves a group of executives with limited experience, led by a Silicon Valley financier, that bought a floundering franchise in 2010 and set out to fix it by raising a single question: What would happen if you built a basketball team by ignoring every orthodoxy of building a basketball team?

The process took many twists and turns, and there were times when it nearly failed. But the dominance the Warriors have displayed this season can be traced back to one of the most unusual ideas embraced by the data-loving executives: the notion that the NBA's 3-point line was a market inefficiency hiding in plain sight.

This season the Warriors have sunk 1,025 3-pointers, by far the most in NBA history. Not only has Mr. Curry taken more threes than any other player, he is making them at a rate of 45.6%, higher than the NBA average for all shots. He has shattered his own record for most 3-pointers in a season by 34%. Moreover, distance seems to have no significant effect on his accuracy. Mr. Curry is a better shooter from 30 to 40 feet than the average NBA player is from 3 to 4.

The result is a basketball style no one has yet figured out how to defeat.

"What's really interesting is sometimes in venture capital and doing startups the whole world can be wrong," said the team's primary owner, Joe Lacob, a longtime partner at Silicon Valley venture-capital firm Kleiner Perkins Caufield & Byers. "No one really executed a game plan--a team-building architecture--around the 3-pointer."

...made easy because experts refuse to believe markets are inefficient.

Posted by at April 14, 2016 4:17 AM

  

« YOUR NEXT CAR WILL BE A VOLT: | Main | ANY POLICY NOT WORTH A LIE IS NOT WORTH ADOPTING: »