Moneyball: How Do You Analyze?

According to the main principles of Moneyball, sabermetrics try to assess the true value of players by using several formulas that they create. Of course, they are not always a true predictor, but they work a good chunk of the time. In this article, two concepts that are heavily discussed include gut-feel decision making and how one actually measures value. Gut-feel decision making is one of the toughest aspects in life generally. In baseball, it is even more difficult because it´s not just ¨one or the other.¨ There are often an infinite amount of choices. “In each case, in the back of decision makers' minds, or in their gut somewhere, they evaluate the benefit, cost, and risk, and estimate whether the resulting value seems high enough to make it worth doing. A qualitative analysis of value is performed internally, invisible to everyone else, sometimes even unconsciously. The value is assessed, and the decision is made, by gut-feel.” General managers make these gut-feel decisions about a particular player, and the results have a lot of variability. These decision making skills will continue to improve if GM´s know how to actually measure value. “The difference was how they measured value, or didn't measure it, really. Every other team estimated value via a gut-feel, internal, qualitative analysis, performed by each scout separately. It involved parameters such as batting average and home runs, as well as how good the player looked in the batters box or in the team picture, or where they played in college, or whatever else each scout thought was an indicator of value.” Clearly, a match in value in terms of scouts´ opinions and the playerś actually value will lead to good things for a team. A larger the difference between the two variables means that the teams will not be paying the player on a team-friendly deal. In my next blog post: How will I adequately summarize all of the ideas that I came up with on the previous blog posts?