I suppose this is a natural progression; when you're young, you fantasize about being a ballplayer, then you get to middle age and fantasize about being a GM.

Beautifully written and engaging. One little tweak, though. Cosh falls for one of the big myths of the late 20th century:

The public's relationship to corporations has changed radically in our time. Retirement-related tax reforms undertaken widely in the 1980s have transformed the middle class in Canada and the U.S. into an investor class; this will, one day, be recognized as the most electrifying social change of the period. The average man has become more corporate-friendly, more intelligent about business, and better disposed to capitalism. And a whole new tier of business journalism has arisen to turn CEOs into celebrities.

This may be true in Canada, but under 30% of households in the U.S. own a single share of stock or mutual fund. This is up a lot since before the 1980s (it used to hover a little under 20% of households). And it's lower than that among the under-65 crowd.

Our culture's interest in all things corporate, our religious passion of the CEO exists as a strong thread, & especially in commercial media, it's very high, with probably more adherents than go to any single church's houses of worship. But the myth of broad stock/mutual fund ownership is a fallacy. Over twice as many people own equity in houses, and with more value.

We are a country where most people who have any meaningful assets have them as home equity. The idea of stock/mutuals crowd being broadly distributed is a naive myth.

Background:
most recent U.S. Census Wealth measures.

If you examine these, you'll see there are some people who indirectly own stocks and mutual funds through IRAs, etc., but the number is not calculable based on the data. Well under half is a best estimate.

This isn't a bad column, apart from what Jeff pointed out above.

One other factor that came to mind. The coaches seem to get a lot more coverage in college hoops than before. My own pet theory is that because so many of that sport's stars go to the NBA after one or two years, turnover is so high that it becomes natural to focus on the coaches. And I wonder if baseball is experiencing the same phenomenon as team turover increases.

Western Standard: Cosh: Cheering for the New York Yankees is like...

....licking the receiver of a public payphone outside a New York subway restroom?

Best Regards

John

But the myth of broad stock/mutual fund ownership is a fallacy.

Whoa, it's a myth AND a fallacy? Let me guess... it's also a canard?

If you count direct and indirect ownership of market-traded equities, the figure usually cited isn't 30% of households; it was pushing 50% in 2000, is now higher by some accounts, and is almost universally agreed--by economists of the left, of the right, and of outer space--to have expanded very dramatically over the past 20 years. 13% of American households have Roth IRAs, whose seventh anniversary of existence is coming up tomorrow. IRAs and 401(k)s aren't counted in the "under 30%" figure you're throwing out, which makes it all but meaningless.

It would be certainly be a myth to state that stocks and funds were broadly controlled, or "distributed" in the sense that the middle class now has the economy by the shorties. The rich are still the rich.

As investors have become more broadly aware of obscure metrics of business performance--P/E ratio or EBITDA

P/E ratios and EBITDA aren't "obscure metrics", at least to well-informed investors, i.e. professionals. In fact, they are relatively standard, easy to find and calculate. They are more akin to batting average, homers, and RBIs -- widely published, yet slightly misleading and not very indicative of "true" financial performance. Just ask all the Worldcom investors who valued the company using EBITDA.

Other changes are on the way; the sports freak just being born will be as unrecognizable to his forebears as today's 20-year-old fan is to his 40-year-old compatriot. To take just one example, a fascinating concomitant of the new mass capitalism has been the rise of "ethical investing". We have mutual funds dedicated to particular environmental or religious norms, and there are whole sectors, from "fair trade coffee" to organic farming, predicated on a special claim to piety.

I'm not sure what ethical investing or organic farming has to do with anything here. If anything, they are just niche portions of the financial and agricultural industries.

There are more interesting questions to ask about the tying financial markets to sports:

- many executives and employees nowadays prefer stock options to straight salary -- will we see a day when ballplayers and GMs prefer incentive-laden contracts with bigger payoffs if the player has a great year, or if the team does well? Would A-Rod prefer to make $25 MM guaranteed, or $50 MM if he hits 60 homers and the Yanks win the World Series?

- will we ever see more teams organized as publicly traded companies? I think the Celtics were public once, but were taken private. Instead of cash, would A-Rod rather get stock options?

many executives and employees nowadays prefer stock options to straight salary -- will we see a day when ballplayers and GMs prefer incentive-laden contracts with bigger payoffs if the player has a great year, or if the team does well? Would A-Rod prefer to make $25 MM guaranteed, or $50 MM if he hits 60 homers and the Yanks win the World Series?

Everyone prefers certain payments over uncertain, with only rare exceptions. Most exec stock option packages pay off big even with mediocre performance, i.e. just match the S&P;500 for 7 years and your stock price will have doubled. Execs prefer options because it disguises their real pay levels to the shareholders. Even though most public company CEO's control the company through complicit boards, and set their own pay levels, they have to mind appearances to avoid shareholder revolt. Options are the tools to do that, most shareholders don't realize when a large grant of options is highly likely to produce enormous payouts, no matter what CEO performance is.

A baseball player doesn't have the same worries or concerns. Why take pay for performance when you can get almost as much pay with no performance requirements?

It would be certainly be a myth to state that stocks and funds were broadly controlled, or "distributed" in the sense that the middle class now has the economy by the shorties. The rich are still the rich.

And yet this is the implication most of the time that any right-winger or libertarian talks about the "investor class." To the extent that "middle class" (however one chooses to define that term) people are in favor of what the Investor's Business Daily crowd wants because they think it will benefit *them* as a member of the "investor class," they are being swindled. And this swindle is behind every change and proposed change in tax laws that attempts to shift the tax burden away from money that accumulates itself and towards people that have to work for a living. If only the effects of the swindle could be limited to those who fall for it...

If I can just interrupt your efforts to condense the entire run of The Baffler into a single paragraph, what I need to get across is that you can be as far to the head-clutching left as you like and still agree with my basic point. At least I hope so. Eugene Debs would be right there with me when I note the functional and psychological parallels between investing and sports gambling.

The one core thing that interested me was that the mathematical languages of professional investing and sabermetrics (previously an amateur, but cult, enterprise) seemed to break into the general public consciousness at the same time, almost in lockstep. Gambling goes hand-in-hand with this too; I can't be the only one who is surrounded by 25-year-old hold-'em goombahs who now use "plus-EV" to describe good TV shows and trips to the beer store.

I can't be the only one who is surrounded by 25-year-old hold-'em goombahs who now use "plus-EV" to describe good TV shows and trips to the beer store.

No your not, and I think this is perceptive. I was thinking there was different factors of causality though. The Poker phenomena I attributed to its exposure. When it became popular and cool, all the kids had to get into it. Its an effort to be hip, and now anyone from any background, with a minute exposure to techniques, now thinks they understand the thing that makes the world work. And in reality, they have no more grasp than the cool kids from 1000 years ago trying to turn lead into gold.

But you make a compelling argument regarding the convergence of these simularly situated games. From a cultural perspective, I wonder if its a fad that will move with time, or if its a change in the social driving force of our societies.

If I can just interrupt your efforts to condense the entire run of The Baffler into a single paragraph, what I need to get across is that you can be as far to the head-clutching left as you like and still agree with my basic point.

Of course. I do think the original article is very perceptive. As early as the early 90s, a lot of us in a fantasy league noted how it was easy to think of players and their contributions as assets in a portfolio.

I also wonder of the higher turnover on teams contributes to more attention to management, and to whether the media attention given to salaries and contract terms is a cause, an effect, or neither. Certainly the press has given it more attention, and I wonder if that's because it's harder to tell the players without a program, to coin a phrase, than it used to be.

Obviously the proliferation of fantasy sports is a major factor as well, though you've got a chicken-egg type of if you are trying to figure out whether this paradigm shift you accurately discuss has anything to do with that.

Its an effort to be hip, and now anyone from any background, with a minute exposure to techniques, now thinks they understand the thing that makes the world work. And in reality, they have no more grasp than the cool kids from 1000 years ago trying to turn lead into gold.

There are still a lot of things that numbers and spreadsheets don't tell you. And you can get better numbers but whole new layers of complexity will be revealed. Whether we are at the Newtonian or Einsteinian level is hard to say.

P/E ratios and EBITDA aren't "obscure metrics", at least to well-informed investors, i.e. professionals

But I'm sure the difference between the number of investors, and well-informed investors, is substantial. To you, P/E ratios and EBITDA may not be obscure, but I'm willing to bet a large number of investors wouldn't have a clue how to calculate these without a cheatsheet. I guarantee you it's subsantially less than 50% or so of the population holding stocks.

I may be wrong, but you seem to be jumping on him for stating what is obvious (to you). There's a parallel here between this article and the old Neyer articles that used to get posted. Inevitebly (sp?) he'd get bashed for repeataing the OBP argument, or DIPS (I know, it's flawed Backlasher, so please just play along), etc. for what seemed like the hundredth time. But we aren't necessarily Neyer's entire audience; I'm sure Mr. Cosh aspires to have more of an audience just us as well.

I'm sure you can show this article to quite a few people on the street and they'd admit that they don't know anything about OPS, OPS+, P/E, EBITDA, etc. I'm not calling them stupid; they've simply had no reason to know, or didn't realize the benefits of knowing. Colby's done an excellent job of drawing parallels between worlds not known to all.

Cheering for the Yankees is like...
My own personal favorite way to finish this phrase is "cheering for the Alpha Betas during _Revenge of the Nerds._"

Of course I say this as a New England Patriots fan, knowing that they are the current heavies in pro football since everyone must be sick of Tom Brady and company by now. The difference is that it's easy to imagine a not-too-distant future when the Patriots will suck massively like they used to and we'll have to comfort ourselves with the memory of the 2001-2005 era. The Yankees haven't had many long dry spells and the way the game is played any dry spells they have are going to short lived compared with the ones you'd expect in Pittsburgh or Kansas City.

I may be wrong, but you seem to be jumping on him for stating what is obvious (to you).

Sorry, I didn't mean to jump on him, maybe it came out harshly. I only wanted to clarify something he said. It actually dovetails in with a larger point Colby was making -- just as baseball analysts used to look at batting average, but now look at OBP; financial analysts have, in many cases, moved past P/E ratios to look at more insightful metrics. Of course, some baseball analysts and GMs still look to the older metrics, just as some professional investors do.

There is no "right" way to look at it -- everybody has their own way of doing things, what works for some might not work for others. What works for Billy Beane may not work for Kenny Williams; what works for Warren Buffett may not work for John Henry. All four have been successful using different styles.

Just thought of another parallel -- activists affecting corporate behavior. There is a certain class of investor, known as an activist -- he usually buys some stock in a company, makes a big stink in the media, complains about management, that it isn't running the business efficiently. Usually these claims have some shred of truth, although the activist makes bombastic claims. Sometimes other shareholders agree with the activist and pressure the company, which eventually accedes, and adopts some of the activist's suggestions. Carl Icahn is the most famous activist investor, and his current target is Time Warner -- the company heretofore has adopted his suggestions, but it usually takes a lot of time.

Why couldn't sports fans do the same thing? Why can't fans of poorly managed teams band together, make a big stink in the media; show the poor moves the team has made while the owners get rich; complain to the local government that the team is getting tax breaks and that the residents should expect competent management; organize a boycott of the games until ownership makes some changes?

I'm just speculating here, obviously the analogy isn't exact, but it's an interesting parallel.

Forget growing up to be a GM; I'd be happier growing up to be Debs.

Texas Hold'em is a good way to kill time. And to get rid of change.

Asian people shoudln't gamble.

I know absolutely nothing about the stock market, but thought it was weird that he pointed to 'the investor' class. outside of IRA, I honestly don't know one person who invests in the stock market. I know a few people who own some stocks that they got as wedding presents or through work stock options, But I can honestly say I don't have one friend who plays in the market or even makes more than one purchase a year, and usually even then it's because someone knows someone who knows something(which they almost always get burnt on)

(it was the only thing that stood out to me in this article as kinda strange) other than that I like the article. I love the comment about ethical latin american signings. and even more about further education for nhl players. I always thought it would be in the best interest of the unions of the major sports to have mandatory classes(I believe basketball actually does) that helps educate these rich kids on how to handle their money, and maybe even work on them getting regular degrees.

But today's young sports fan doesn't mind; he spends as much time imitating general managers in fantasy leagues as he does watching the games</i>


I think he sorta misses on this point. I think there are a lot of more noticeable die hard fans who devote themselves to message boards and sim leagues and fantasy leagues who get more attention, but I think the vast majority of young baseball fans are casual ones who take whatever wisdom their father can offer and simply take enjoyment in watching the games. At my school, there's a huge portion of people who will claim allegiance to either the A's or Giants, but there's maybe two other people, along with myself, who can so much as name 10 guys on both teams. And that's just the local teams; forget about the rest of the major leagues.

As for why one might imitate a GM as opposed to an actual player, that's easy to understand. It has nothing to do with a social shift in values or anything like that. I think that now a lot more people have a better understanding of what it is a GM exactly does. A whole lot of people can look at a guy signing free agents and making trades and think "Hey I can do that," whereas only a small, small percentage can look at somebody hitting a home run or stealing a base and think "Hey I can do that."

It's quite a bit like the poker craze, in fact. Looks easy to do, and in small, controlled settings (fantasy leagues, online poker tables) it can be done. But I'm sure a large majority of these kinds of people would be in way over their heads as a real GM or in a proffessional tournament. It's not that it's any easier to do than actually playing baseball, it's just something a whole lot easier to realistically envision yourself doing.