Picking Winners Is a Losing Game – Lessons Learned From Moneyball – New Age Alpha – 2.10.22

Overview:
Title: Picking Winners Is a Losing Game – Lessons Learned From Moneyball
Date: Thursday, February 10, 2022
Time: 1:00 PM Eastern Standard Time
Duration: 1 hour

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Summary:

Now On Demand

The success of Moneyball, made famous by the Oakland A’s, could only be achieved by thinking differently, re-inventing a player’s worth and focusing on value. Ultimately, it relied on facts and fundamentals and disregarded the unknowable future. Despite its reference to money management, however, such an approach has largely been ignored by traditional asset managers who continue to look for an edge. Overly confident in their ability to pick winners, these managers assume they have some predictive ability and knowledge of the future. And clearly, no one has that. Worse, this outdated approach fuels a portfolio mispricing risk that can significantly erode returns over time. We believe that instead of trying to pick winners, portfolio managers should simply avoid the losers. Like the A’s, they should focus on the numbers—the known information—to avoid strikeouts in the market or on the baseball diamond. This presentation will cover:

  • How to apply a Moneyball approach to investing and portfolio management.
  • How traditional portfolio managers are exacerbating a portfolio mispricing risk caused by irrational human behavior.
  • How to get your clients to focus on the right question, the question very few are asking: How can we avoid the losers?

Speaker:
Andy Kern, PhD Andy Kern, PhD Senior Portfolio Manager New Age Alpha, LLC

Andy serves as senior portfolio manager of New Age Alpha Long Short. He is also responsible for New Age Alpha’s research initiatives, including historical and ongoing analysis of the H-FactorTM investment methodology. This involves adapting, testing and applying findings from academic finance literature to continually improve the company’s strategies. Prior to New Age Alpha, Andy was Vice President at Guggenheim Transparent Value. His research helped refine and improve the firm’s proprietary “Required Business Performance (RBP)” investment process by incorporating innovative econometric techniques. He also assisted with marketing efforts, supported the external sales force, and produced content for investor and external stakeholder communications. Andy served on the faculty of the Trulaske College of Business at the University of Missouri and his research has been published in the Journal of Financial and Quantitative Analysis. He holds an MBA and PhD in finance from the University of Missouri.