Back to Drew's Views
December 11, 2019
Previous
Next

James Harden and Alpha

Stock Picking
Sports

I played high school basketball in Indiana.  I won a few honors, but was broadly mediocre, and certainly not NCAA D1 material.  My brother and I were watching the Rockets play the Jazz this past week, and were commenting back and forth on the advantage James Harden gets when the referees allow him that extra step or two. And he isn’t even the most egregious. In the NBA, traveling just isn’t traveling anymore.  

My favorite compilation is linked below [1], but the bottom line is guys today get a whole lot more steps before a referee will blow the whistle.  So I said to my brother, a similarly decent-but-not-awesome high school basketball player, “imagine if we got those extra steps back in the day – I mean, how much better would we have been?”

“Yeah, but Drew, the other guys would have had an extra step too.”

My brother didn’t realize he was spouting a zen-like Michael Mauboussin paradox-of-skill koan, but that’s what it was, and it applies to me today as a fund manager as much as it did when I was a basketball player.

 

James Harden 1.jpg
After you step back twice and drop this three, I am going to get the ball, and travel too.

Advantage is only an advantage if others don’t have the same advantage.

Do you meet with company management?  So do 30 sell-side analysts and 100 buy side analysts and PMs every quarter.  Do you build your own, bespoke, earnings models?  So does half the buy side.  Do you interview competitors, customers, and suppliers?  So does half the buy side.   Do you pull credit-card history, satellite images, and other big data in real time?  So does half the buy side.  If you think you have a sustainable informational edge, you’re either deluding yourself, or you have inside information.

We are not playing an information game.  Everyone has the information.  The question is how objective can you be when you process it, and might Mr Market see the same information with bias?  

That’s it.  That’s the game.  Everyone travels now.

FOOTNOTES

[1] https://www.youtube.com/watch?v=oJvEwWZhZTk

Download PDF

Topics

Stock Picking
Sports

DISCLAIMER

The views and opinions expressed in this post are those of the post’s author and do not necessarily reflect the views of Albert Bridge Capital, or its affiliates. This post has been provided solely for information purposes and does not constitute an offer or solicitation of an offer or any advice or recommendation to purchase any securities or other financial instruments and may not be construed as such. The author makes no representations as to the accuracy or completeness of any information in this post or found by following any link in this post.

YOU MIGHT ALSO LIKE

Text Link

Heading

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Suspendisse varius enim in eros elementum tristique. Duis cursus, mi quis viverra ornare, eros dolor interdum nulla, ut commodo diam libero vitae erat. Aenean faucibus nibh et justo cursus id rutrum lorem imperdiet. Nunc ut sem vitae risus tristique posuere.

Text Link
Text Link

Investors? Possibly you!

FATMAN-G. No, that isn’t my rap name, although vaguely appropriate (I mean, the G part of course). That’s our new moniker for the Avengers[1] of the equity capital markets, to which we have now added Tesla. FATMAN-G is Facebook, Amazon, Tesla, Microsoft, Apple, Netflix, and Google.

Stock Picking
Markets
Read More
Text Link

Avengers Assemble!

Amazon is, very simply, a tremendous company. Google is also a tremendous company. The same goes for Microsoft, Apple, Netflix, and Facebook. These are the superheroes of capital markets. In these FAMANG stocks, the Avengers have assembled.

Markets
Stock Picking
Read More
Text Link

How Did This Even Happen?

No, I’m not talking about the winner of the Presidential election or COVID-19 or 2020. I’m talking about something I saw Rex Chapman tweet out over the weekend.

Sports
Read More
Text Link

The Hot-Hand Fallacy Fallacy Fallacy?

Many of you will be familiar with the so-called “hot-hand” fallacy, or (perhaps) the lack thereof.

Factors
Sports
Stock Picking
Read More
Text Link

Cue the Camouflage

The S&P 500 is up 6.5% this year. That’s a total return number, and given what is going on out there, it’s pretty impressive.

Behavioural Finance
Markets
Stock Picking
Read More
Text Link

The Times that Try Stock-Pickers’ Souls

On first principles, there is one way to generate excess stock market returns over the long term, and it isn’t to “own winners at any price.”

Markets
Factors
Stock Picking
Valuation
Read More
Navigations
HomeTeamDrew's viewsPressContact
About Albert Bridge Capital

Albert Bridge Capital manages concentrated long-only equity portfolios for institutional investors.The hallmark of its Alpha Europe strategy is the application of tenets of behavioural finance to a rigorous, fundamental, process-oriented research process.

Regulatory Disclaimers
Stewardship codePillar three disclosureRTS 28Legal & regulatoryPrivacy policyCookies policy
How to get in Touch
Michelin House
Suite 109, 81 Fulham Road
London, SW3 6RD
info@albertbridgecapital.com
+44 (0) 203 826 0206

Subscribe to Drew's Views

No spam. Unsubscribe anytime.
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Albert Bridge Capital LLP is authorised and regulated by the Financial Conduct Authority of the United Kingdom © Albert Bridge Capital 2021.
Website by SW10media.com
Investors? Possibly you!
Avengers Assemble!
How Did This Even Happen?
Was “Value” Just a Hot Hand Thing?
The Hot-Hand Fallacy Fallacy Fallacy?
Cue the Camouflage
The Times that Try Stock-Pickers’ Souls
A Different Game?
Heads I Win
A New Ice Age?
Grandpa Stocks
Bubblicious?
On Negative Oil and Futures Prices
In Flew Enza
COVID-19 and Equity Markets
Regulators to the Rescue?
Perspective
We Don’t Make Pizzas
Ben Graham the Growth Investor?
Not a Bad Decade
On the Impact of the FAMANGs
Europe vs the US: Is it all about sector exposures?
Behavioural Finance is Finance
America’s Decade
Known Unknowns and Share Prices
Prediction, Publicity, and Paul the Octopus
Are Company Visits Good or Bad?
Everybody Was Kung Fu Fighting?
Voting Machines and Weighing Machines
The DCF is the Randy Watson of Valuation
The Sacrilegious Diaries: Measuring the Impact of Portfolio Turnover
Passively Irrational?
Imagine No Inflation
The Sacrilegious Diaries: The Benefits of Turnover
Stay in the Game
I’m Volatility?
Woody was Right
When You Can’t Wait For Tomorrow
James Harden and Alpha
Groundhog Day and Overnight Returns
Debiasing and Alpha
Peak “Peak Car” ?
The Right Way
The First Step to Regaining Credibility
The Futility of Market Timing
Visualizing the Arithmetic of Active Management
123 Years of the Dow
Sweet Emotion?
Share Buybacks, Bad Companies, and Bear Markets
Risk and Portfolio Theory
Keeping Calm and Carrying On
Reminiscences of a Stock Operator: The Volkswagen Chronicles, Ten Years Later
We’d Rather Not Sleep
Factor Timing, Should You Try?
The Mathematics of Maintaining Bet Size
The Grandfather of Behavioural Investing
On Sexual Chocolate and Semi-Annual Reporting
Island Economies and Risk
Build a Bear?
Data Science and Alpha
We’re all Value Investors
Hunting for Alpha
Career Risk, Alpha, and Contrarian Investing
Passive Flows and Wheelbarrows
God Bless the Shorts
Sell in May, and Go Away?
Equilibrium Happens
Horses and Stocks
Peak Quality?
Bill Sharpe and Hank Aaron
Unwarrented
The Search for Excellence and the Loser’s Game
Fooled by Non-Randomness
Half Hearted Is Half Minded
Still Superman, but without the cape
122 year Dow Jones Histogram: Putting 2017 into context
Pegs, P/E'S and the Value Premium
Rick Barry and Lewis Carroll
Secular Winners and Value Investing
Robots and Alpha
The Voting Machine
Prevous
Next
hometeamdrew's viewspressCOntactRegulatory