What Baseball And Value Investing Have In Common

“Baseball is the only field of endeavor where a man can succeed three times out of ten and be considered a good performer.”- Ted Williams

My favorite sport in the whole world is baseball. I love everything about it. The history, the strategy, the pace of play, the intricacies, the stats, and the grace of the game.

To stand in the batter's box and face a man who can throw over a 100 mph takes courage and an incredible amount of skill. This is not a skill that everyone has, to hit a round ball with a round bat and to do it successfully.

Michael Jordan was considered the finest athlete of my generation and he couldn’t hit a baseball. It is considered by some to be the hardest act there is in sports. Consider this:, to be a star hitter (a .300 hitter) in baseball means that you only succeed three out of ten times. In any other profession, you would be fired so fast with a performance like that. Imagine a computer repairman only fixing three out of ten computers.

Ted Williams is considered arguably the greatest hitter in the history of the game. He played from 1939 to 1960 with the Boston Red Sox. His career average of .344 batting average and 521 home runs are some of the best in the history of the game. At the age of 39 he hit .388 which won him the league batting title that year, making  him the oldest player to ever win a batting title. In his final at-bat of his career, he hit a home run. Very fitting for a player of his caliber. Simply put, the man could hit.

So what does this have to do with investing? Well, let’s take a look.

Ted Williams and the Science of Hitting

After his playing day, Williams still was a major influence on the baseball world. He was a manager for a short time and did some consulting for the Red Sox. But his greatest contribution was his study of hitting. During his career, he was a great student of hitting and was always reviewing what the pitchers were doing and using this information to analyze his approach to become better.

He said that most players during his time didn’t pay much attention to what the pitchers were throwing and how they did against those pitches. In his seminal book “The Science of Hitting,” he described  his approach of creating 77 cells in the strike zone, each the size of baseball. Swinging only at balls in his best zone would allow him to hit .400. Reaching for balls in his worst zones, for example the low and outside corner zone of the strike zone, would reduce him to a .230 hitter. He found that if he waited for his pitch in a zone that he could handle, then he was going to be very successful, and if he swung indiscriminately at any pitch in any zone he was likely to very unsuccessful.

I would say that his philosophy worked out for him pretty well.

How Ted Williams' approach can be used in investing

1 2 3 4
View single page >> |

Disclosure: Intrinsic Value Formula is published as an information service. It includes opinions as to buying, selling and holding various stocks and other securities.
more

How did you like this article? Let us know so we can better customize your reading experience.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.
Roger Morris 4 years ago Member's comment

Nice article. Hadn't heard that #Buffett wanted to buy the Cubs before though. Any more info on that?

Dave Ahern 4 years ago Author's comment

Hey Roger, thanks for the comment. I did read while researching the article that he was interested in buying Wrigley's but I think he passed because they wanted too much money. Go figure. He did own the team in Omaha for a while though.

Roger Morris 4 years ago Member's comment

Pretty cool. I always enjoy these odd tidbits of news. Thanks Dave! Hope to see more by you soon.

Mike Nolan 4 years ago Member's comment

Great article - you've manager to capture the essence of my two favorite pastimes - baseball and investing!

Dave Ahern 4 years ago Author's comment

Thanks, it was a lot of fun to research and write. Have been a big baseball since I was in little league and was excited to see the connection. Thanks for taking the time to read the article.

Moon Kil Woong 4 years ago Contributor's comment

I like both of them. Nice article. Like baseball, you win by focusing on getting hits and not getting out more than swinging only for home runs.

Dave Ahern 4 years ago Author's comment

Thanks for the comment and taking the time to read the article. Single hitters don't make as much money but they tend to win the games. And I think that is what is all about.