I liken old school General Managers of professional sports teams to fundamental investors. The GMs that have not yet embraced the trend of data mining and statistical analysis – under the umbrella that’s now being labeled as “Sports Analytics” – are being left behind, sliding down the leader board or being fired outright.
This is not unlike old school fundamental investors who try to hang on to old ways in this internet age of visual analysis. To these investors, I extend a warm invitation to join our inner circle of Technical Analysis.
But back to the pro sports managers. I find it mildly amusing that this trend towards intensive number crunching and the dissecting of pro sports games in new ways is finally catching the attention of the major sports leagues. Even MIT is endorsing this new discipline by sponsoring events such as the MIT Sloan Sports Analytics Conference. We visual investors (technical analysts, chartists or whatever label you care to give us) have been doing this with reams of stock market data for 80 years or more. I humbly submit to you that the Pittsburg Penguins of the NHL might be better served hiring not just a statistical PhD but a seasoned Chartered Market Technician (CMT) who would be better able to present mountains of statistics in useable, enlightening, visually-friendly charts from which conclusions can flow more easily.
After all, we technical analysts are masters of the universe when it comes to charting and visual analysis. Stock market data is just random noise until it is dissected, analyzed and clearly charted so that profitable trading decisions can be executed. Likewise, pro sports data is also just noise until a capable visual analyst can format and present the data in a useable manner from which actionable conclusions may be drawn. We are after profits while they are after points.
The Carolina Hurricanes of the NHL recently announced the hiring of a Harvard-Berkeley trained chemist who is an expert in the manipulation of matter. It’s a very impressive endorsement of this Sports Analytics movement that they can seduce guys like him away from Silicon Valley with its stock options and generous salary scales. These days, it seems you don’t need to wear a team jersey to be paid the big bucks.
My long-time blog readers may recall that a few years ago I ranted about a number of presentations at the annual Certified Financial Analysts (CFA) conference I attended. Erudite speakers at the event pontificated for hours about their statistics and pages of data. I was very frustrated because I knew that any good chartists or CMT could have easily presented the same data clearly and concisely in a few visual graphs. Therein lies the gist of my present rant. What the Oakland Athletics Manager Billy Beane did with data mining and analytics as portrayed in baseball’s 2011 “Moneyball” movie is what is now being adopted into the mainstream of all professional sports. When we stock market technicians see that, we just smile and say, “It’s about time, guys. Welcome to our world. What took you so long?!”
Trade well; trade with discipline!
-- Gatis Roze, MBA, CMT
Developer of the StockCharts.com Tensile Trading ChartPack.
Presenter of the Tensile Trading DVD, Stock Market Mastery.
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