The Moneyball Manifesto

In preparation for the baseball season, I've updated my blogroll with a couple of my favorite baseball sites, Catfish Stew and Athletics Nation (yes, I'm an A's fan). These blogs publish year round, but I can't read about baseball during the offseason, so last year I stopped reading my baseball blogs as soon as Magglio Ordonez hit the homerun that knocked the Athletics out of the playoffs.

I've also reread the Michael Lewis Moneyball book in preparation for this season. This book came out in 2003, and I didn't read it until a year later when it showed up in paperback, but I've read it every year for the last four at the start of the baseball season. It's probably one of my favorite books of this millennium (sports or otherwise).

Moneyball explains how A's GM Billy Beane built a winning team on a shoestring budget by building up the farm system and trading for players that were undervalued by other teams. In other words, "exploiting market inefficiencies". When the book was written, the baseball stat that was most undervalued was on base percentage (OBP), so Beane and his assistant GM Paul DePodesta sought after players who got on base. It seems obvious that OBP is the most important offensive statistic in baseball, since the object of a game is to score more runs than the other team, and in order to score a run, you must first get on base.

This theory was viewed as heresy by the baseball establishment, from the five tool scouts to old school announcers who played the game, but it has proved to work, so now most teams use OBP (and it's cousin OPS) as a good indicator of offensive efficiency. So for the last couple of years, the A's have started exploiting other market inefficiencies to find qualities that are undervalued by teams that are doing what they were doing five years ago.

It's fun to contrast the economic theories of Moneyball, which is how Lewis (a financial writer famous for the book Liars Poker about Wall Street) tackled the story versus the sabermetric "moneyball" theories (get on base, don' t waste outs) that the baseball world thinks of when they hear the term. The Billy Beane A's are successful because they go against the grain and zig when everyone else zags, not because they have some secret baseball formula
that no one knows about.

And now that I've finished reading Moneyball, I'm ready to start watching baseball again. Camps open next week for all players.