It’s no great shock that hedge-fund billionaire Steve Cohen is now the free-spending owner of the New York Mets, or that John Henry, the hugely successful commodities trader, fills a similar role for the Boston Red Sox.Maybe it has something to do with a love of statistics. Many investment pros still revere Moneyball, Michael Lewis’s classic account of how the Oakland A’s built a title contender by trusting in numbers rather than intuition.
Price matters Baseball fans know that what matters for most teams is not just how good a player is, but how expensive he is. A modestly paid up-and-comer can offer substantially better value than an aging and expensive superstar. One of the great streaks in economic history is the nearly four-decade-long fall in interest rates from the early 1980s to a year ago. As interest rates and bond yields tumbled, stocks looked increasingly attractive and share prices took off.
Pop-ups don’t stay up The pandemic was great – from the perspective of corporate bottom lines. Earnings rocketed higher as companies seized the opportunity to swell their profit margins at a time when the economy was flush with stimulus money and consumers weren’t counting pennies.