The San Antonio Spurs won the NBA Championship last evening in overwhelming fashion, crushing the Miami Heat yet again, 104-87, to win the championship series four games to one. The four wins by the Spurs against the two-time defending champion Heat came by margins of 15, 19, 21 and 17 points, the two largest of which took place in Miami. But, if anything, the margins of victory underestimate the extent of the dominance. The Spurs were simply the better team by a large margin.
The Spurs’ win demonstrates the value of team play, finding players who are willing to work to get better and buy-in to the program, great management, and the importance of finding underappreciated assets (relatively) cheaply. Many of those underappreciated assets come from countries other than the USA.
To be sure, the use of foreign players is as old as professional basketball itself. Italian-born Canadian Hank Biasatti joined the Basketball Association of America’s Toronto Huskies in 1946, the league’s first year. But decades later, basketball remained an American-dominated sport. When the iconic Dream Team took the court and crushed the opposition at the 1992 Olympics in Barcelona, there were only 21 international players in the NBA while a record 92 foreign players from 39 countries began the current season on NBA rosters. That’s roughly one in five NBA players who are not Americans today. But, significantly, the Spurs have far more non-U.S. players than any other team and far more international players in important roles.
Only two of the Spurs’ key rotation players hail from one of the 50 United States and the remainder of the bench is filled with foreign players too. Notice the variety of flags draped over the players in the photograph above. Tim Duncan comes from the U.S. Virgin Islands. Tony Parker and Boris Diaw are French, although Parker was born in Belgium. Manu Ginobili is from Argentina. Tiago Splitter is Brazilian. Patty Mills is from the Land Down Under. Jeff Ayres is Canadian. So is Cory Joseph. Aron Baynes is a Kiwi. Marco Belinelli is Italian. Tim Duncan didn’t sneak up on anybody, obviously. He was the first pick in the draft way back in 1997. But players from outside the U.S. are less likely to get the same level of attention as locals. Picking late in the draft (as a perennial winner) forced the Spurs to be creative and to look for potentially great players in unusual places. Looking for and garnering assets off the beaten path has a well documented history.
First documented in 1991, “home country bias” refers to the tendency of individual and institutional investors throughout the world to hold only modest amounts of foreign equity even though observed returns in national equity portfolios suggest that there are major benefits to be had from international diversification. For example, U.S. investors generally hold nearly 30 percentage points more in domestic stocks than the U.S. market share of total global market capitalization. Whatever the explanation (excessive home country optimism, currency risk, familiarity, patriotism, etc.), we all tend to hold more domestic stocks than we should if we want to optimize our portfolios.
So we should all learn an investment lesson from the NBA Champion San Antonio Spurs. Watch out for home country bias, especially if you want to win.