A number of years ago, the world of baseball was changed when the Oakland A’s more of necessity than anything else started using baseball statistics differently than the other clubs and began to have success. (there is a book and movie called Moneyball) Baseball is a game where everyone kept statistics but when they were drafting a player, it was more by gut feel or rule of thumb. Now every team uses analytics to find those diamond in the rough. In hockey, where in the northeast there is beginning to be crispness to the air, some hedge fund traders are doing the same thing. As people make lots of money, they want to own a big league team and usually are able to buy those teams that are losing money. In an article by James Mirtle titled Army guys help former basket case Florida franchise be all it can be, a former officer in the 101st Airborne Division who became a hedge fund billionaire is Vinnie Viola, he bought the Florida Panthers. It was thought the team based in the Miami area would attract the snowbirds from the north east who flocked to the warmer weather in the winter.

It was not surprising under old ownership the club was not making money, for most professional teams make money from TV contracts – the cable company promotes the team as a loss leader for people to subscribe to the cable channel. After taking care of the people who go the game, there was not an eager base to buy the cable channels. The new hedge fund owner has brought non traditional hockey executives. In this case, some of them were in the Army and they have brought their knowledge of analytics to the team. They draft differently, because although the people are hockey fans, they look at the statistics differently and begin to relate which statistics are most important in what they are looking for in a hockey player. This year, their puck possession time is up and they are winning games. The team has done other things, more money is being spent on the team, the executives are examining why are the top teams successful. How does a team remain successful in the leagues salary cap area?

Linking to dividend paying stocks, it is always fun and interesting to read about companies or teams coming back from the road of bankruptcy to being a profitable operation. It is better to understand why a company can be consistently successful through the years including having years of dividend payments. If you understand they why? then as times change, you can measure if they will still be successful. If the company is, then the stock can be a long term hold.

There are more questions than answers, till the next time – to raising questions.