Why Henry’s philosophy is all about “the numbers”

Liverpool co-owner John W Henry is not a man who likes to go with his gut instinct. Hunches are not something the American would ever go on in any aspect of his life. His business was made fundamentally by taking out the human emotion in investing in the Futures Market. In 1981, Henry set up his own company just to do that, removing gut instinct from the decision to invest in stock. He developed his own data driven system which predicted market trends, which removed human and emotional factors from the dangerous business of hedge fund trading. He subsequently used the system and made a fortune, becoming a multi-millionaire worth $840m before the credit crunch hit in 2007.

Certainly when you make so much money using a mechanical system rather than you own instincts, you will try to apply the concept in every business you go into. Consequently he used the same philosophy when he got involved in Major League Baseball. After purchasing the Florida Marlins in 1999, Henry tried to implement a metrics system but he was met by stiff resistance from the management at the Baseball team. Henry stuck firmly to his beliefs though, stating:

“Many people think they are smarter than others in baseball and that the game on the field is simply what they think it is, through their set of images and beliefs. Actual data from the market means more than individual perception. The same is [as] true in baseball [as the stock market.]”

It wasn’t hard to guess then when NESV took over the Boston Red Sox in 2002 that the principles of saber-metrics would be adhered to from the start. This time the entire coaching team would need to be on board with it, and to this end, the inevitable go to man was Billy Beane, who had already developed a system at the Oakland Athletics team which had seen the impoverished, un-fancied team punch well above their weight. Even before the publishing of “Moneyball,” the book that charted Beane’s use of said statistical tools, Henry had been aware of the General Manager’s philosophy, and he wanted him at the Boston Red Sox.

Although Beane declined to take the role in the end, staying with the Oakland A’s which he now part owns, Henry eventually put in place Theo Epstein, who was to be Beane’s number 2. Although he had no experience in Baseball, the 28 year old Yale graduate subscribed to Beane’s techniques and this was enough for Henry and NESV. Two World Series later and the release of Michael Lewis’s “Moneyball” which showed what saber-metrics was all about, and Henry was being proved right over the Baseball traditionalists. With Moneyball being made in a film with Brad Pitt as Beane, it shows the impact that saber-metrics has had on America’s favourite past time.

Continue Reading on Page 2 to find out how it can be used in football . . .