There’s A Gleam, Men, There’s A Gleam
No, not from the Vince Lombardi Trophy. I’m talking about the gleam from the bed of ice under the huge bowl of shrimp that’s going be the hors oeuvre at the party I’m throwing this November to celebrate the Tribe winning the 2011 World Series. Subject to the exceptions set forth at the end of this post, every member of the Let’s Go Tribe community will be invited.
Because I’m a “Friend of the Capitol Theatre”, the party is going to be held somewhere in the Gordon Square Arts District. I’ll pick out the place the day we win. The party will involve huge amounts of food and booze—all paid for by me up to a maximum total cost of $4,000, including, you should be advised, the cost of a burly Cleveland cop to keep out anyone not on the list of invitees.
I am setting this limit because $4,000 is the amount I’m going to win on the $50 bet I just placed at a sports book on the Tribe winning the Series. (Indeed, for reasons I’ll shortly explain I hate even to use the term “bet” because this is almost a sure thing. In fact, it was a classic example of a shrewd baseball observer (me) being able to identify and exploit an obvious market inefficiency—namely, the ridiculously high odds being quoted by so-called experts against the impending Series triumph by the Indians. At any rate, I got 80-to-1 odds and put down $50.)
Incidentally, the ticket is carefully secured to my refrigerator door by an Indians schedule magnet but will be moved to my safety deposit box as the season gets under way and the steadily-increasing value of the ticket becomes apparent.
Now for the backstory. And I do hope LGT readers everywhere will use it as a source of inspiration.
A few months ago I was surfing my way around EBay and saw that an unidentified insurance company was selling some used software. It was asking a very reasonable price. I looked into the situation a little more deeply and found that this software had been created to analyze and price risk.
Obviously, I was intrigued, intrigued enough in fact to buy the software. When I unpacked it the insurance company’s name had been blotted out with black ink, but whoever did the job messed up—because I could make out the fact that the company’s name seemed to be made up of three letters, and the first letter appeared to be an “A”.( I am currently working on finding out the true identity of this company.)
As I began to work my way through the software, several things became clear about it. One, as I mentioned earlier, it was designed to evaluate risk: specifically the risk that assets would not perform as expected. Immediately, I saw the sabermetrics implications because what are baseball players other than assets accompanied by a risk of underperformance.
And then the almost otherworldly beauty of another feature of this software manifested itself. In just a few easy steps it allowed one to convert risky assets into less risky ones.
Here’s how you did it. First you had to divide the assets into three categories called “tranches” from riskiest to least risky. (I think tranche is a French word, but no matter.) So, using basic OPS and ERA metrics as my basis for classification, I divided the Indians’ likely 25-man roster into three tranches. Then, as the software instructed me to, I just hit Ctl-Alt-Enter, and the riskiest tranche immediately became a lot better. In fact, if I held down the keys for several seconds the bottom tranche moved up two full classifications. The end result was that I was able to satisfy myself that the Indians are a whole lot better than a lot of people think.
I tried not to let my emotions take over even though I just knew in my heart that I was onto something. So I conducted a bunch of crosschecks. For example, I divided just the pitching staff into three tranches and hit the keys. Same result. Then I did just the relievers. Same result.
You can almost imagine the sense of triumph and awe that began to pervade me. I resolved, however, not become self-absorbed about this. I vowed to share my good fortune. (This is the kind of guy I am.) So I moved immediately to capitalize on my discovery by having someone buy the ticket in Vegas and began planning the party.
And then the financial implications of another feature of the software also became apparent. A person or group of people with the necessary seed money could buy 100 or a 1,000 of these 80-to-1 tickets and make a huge amount of money on them. I know this because just by hitting three other keys a person could securitize the tickets and, using Goldman, sell them to overseas investors. I for one think we could sell huge amounts of them in Japan. (They’re crazy about baseball over there, you know.)
In fact, right now I’m trying to think my way through any possible SEC issues this new investment vehicle might involve. But whether this goes any farther than my initial $50 investment or not, the Series Victory Party is set.
In closing, let me say that I am open to any constructive criticism—by which I mean criticism offered to improve this product. But I will not tolerate nitpickers and naysayers. We have enough of them in Northeast Ohio already. So anyone tempted to just criticize out of a sense of envy should be aware of one thing. I control the invitation list.
Incidentally, does anyone know if it possible to win both a MacArthur and a Nobel in the same year?