Supported by Greenhaven Road Capital, finding value off the beaten path.
A request: If you listen to the podcast, please let me know if you liked this as one episode or would prefer many shorter ones.
This audio post covers four things that caught my eye in podcasts.
Why is Nick Saban undefeated against his former assistant coaches? Rather than having their number, it’s more likely that those assistants take jobs at colleges whose football teams aren’t very good. Much like Apple executives leave the mothership to start companies that never rival Apple, coaches leave for schools that never rival Alabama.
What’s the reference class for the Philadelphia Eagles? When the Eagles were home underdogs in the playoffs, some commentators gave hope to their fans because the Eagles were undefeated when underdogs at home. However, this was a terrible reference class. As Michael Mauboussin has written, summarizing the work of Amos Tversky, good reference classes are “broad enough to be statistically significant but narrow enough to be useful in analyzing the decision that you face.”
There are no called strikes in investing. Warren Buffett’s advice, used accidentally, helped one football predictor rise to the top of his betting pool.
Visual Analytics. Data doesn’t magically change behavior. Many sports teams have found that adoption by players increases when numbers are translated into the language of pictures. Good analytics; collecting data, finding patterns, communicating to players and coaches, and implementing strategies is part-of-the-reason the Las Vegas hockey team has succeeded so far.
Novel Analytics. Moneyball started the data rush and different industries have advanced at different rates. The largest data staff in the league has helped the Toronto Maple Leafs. As athletes approach “the right wall” of physical capabilities, new avenues of advantage will become more valuable.
Identity flexibility. Ideas become dangerous when anchored to your identity. Just as a ship needs to move when conditions change, so too should our ideas about how the world works.