Barry Ritholz has published one of my pieces at his terrific blog, The Big Picture, today. Here’s a taste.
When I was a kid in the 1960s, obsessing over baseball players and stats, plenty of people were telling me to question everything, but the implicit (and erroneous) suggestion was that I reject everything. Instead, I suggest honoring the past without being bound by it. Sabermetrics doesn’t eliminate the need for old-fashioned scouting. Consistent with Robert Hagstrom’s idea that investing is the last liberal art, we should always explore and learn, combine thoughts from multiple sources and disciplines, try to think nimbly because the need for new approaches is ongoing, and we should test and re-test our ideas. I think that idea applies to baseball too.
If we are going to succeed, we’re going to have to ask questions and keep asking questions. Data won’t give us all the answers, but all of our good, objective answers — upon which we should build our investment (and baseball) beliefs — will be consistent with the data. Thus our processes should be data-driven at every point. Smart investing is reality-based. As James Thurber (and later Casey Stengel) would have it, “You could look it up.”
I hope you’ll read it all (and it’s a lot).
Above the Market 