Ben Berkon recently wrote an article for The New York Times News Service  titled Emphasis on stats a boon for baseball’s top defenders. The backstory to the article is the book and movie Moneyball – the story is for generations baseball scouts and those in the game looked at stats in one particular method. Then came along the General Manager of the Oakland A’s – Billy Bean who began to question if the stats the generations had used were of good understanding to the results on the field? In turns out many of the stats were rule of thumbs and overlooked the contributions of why a player was good under the general rules. Billy Bean began to draft players who the other scouting organization did not understand and more importantly for the salary structure he employed he was winning. The teams were more than competitive, the salary structure for the owners was great and the Manager had the players he needed.

It has taken a while before all the teams have adopted their version of Billy Ball or looking at the stats differently. In most sports offensive pays more (think of increasing sales), while defensive pays less (think of keeping the same profitable accounts or not losing them). Baseball is no different and now defensive players who make fewer mistakes or are consistently in a position to catch the ball are being rewarded for their defensive abilities. In the article, the example of Tampa Bay outfielder Kevin Kiermaier who is a below average hitter, but an overall average outfielder was rewarded with a $53 million contract extension. The major leagues use a system called Statcast – which provides both video evidence and data to give an increasing amount of information to evaluate players. Every year the amount of data given by Statcast increases and the methods to evaluate every player in relationship to others increases. An example is a stat called Catch Probability – Kiermaier caught 17 more balls than if someone else was in his position.

Linking to dividend paying stocks, there is an old story about James Goldsmith who was a hedge fund tycoon of his day (before he was caught raiding a pension plan) but he asked for 5 numbers from of his various holdings everyday. With those numbers he could do what he needed to do. Everyone operates with some numbers to determine how they are doing? if they are on the right track? While the most important number for dividend stock holders is the company profitable and can pay its dividend, ideally increase the payout, the company still has to be profitable. In baseball, how to measure the worth of a player continues to evolve and that means how you measure your investments can continue to change.

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