Trading Bases: A Story About Wall Street, Gambling, and Baseball (Not Necessarily in That Order)
“An ex-Wall Street trader improved on Moneyball’s famed sabermetrics to place bets that would beat the Vegas odds on Major League Baseball games—with a 41 percent return in his first year. Trading Bases explains how he did it.”
When Lehman Brothers fell, Joe Peta did, too.
Mr. Peta’s 15-year career as an equity trader with Lehman Brothers came to an abrupt end when an ambulance mowed him down and crushed his leg. Unable to walk for months and separated from his family on the West Coast, Mr. Peta was relegated to watching baseball in his wheelchair—his favorite thing to do as a child.
Now armed with skills in investment, risk analysis, and portfolio management, he was inspired to use his financial training and skills for baseball betting.
It struck him that he could possibly improve upon sabermetrics, the methodology made famous in Moneyball. Why not look at professional baseball teams and Vegas betting lines in the same way a financial analyst looks at the S&P 500 index?
In Trading Bases, Mr. Peta describes a system for betting on baseball and how he began the process to turn it into a business enterprise. Building on the work of predecessors from the sabermetrics school of baseball statistical analysis, Bill James and Nate Silver, Mr. Peta developed statistical indicators designed to give him an edge in the 2011 season.
His work shows how to take luck out of a team’s statistics to predict its performance in the next game and over the course of a season. Mr. Peta applied the idea of separating acquired skills from chance or accident to assess a portfolio manager’s performance to the world of baseball betting.
Mr. Peta’s system was ready for application by the beginning of the 2011 season. By August, his “hedge fund” yielded a handsome return of 41 percent with a daily volatility similar to the funds for which he traded. In case you are wondering if Mr. Peta’s model was a “one hit wonder,” it was applied to the 2012 season and returned a more modest, but still respectable, 14.01 percent.
Joe Peta takes readers to the ballpark in San Francisco, to trading floors and baseball bars in New York, and to sports books in Vegas—all while tracking the progress of his wagers.
Often humorous and occasionally touching, Trading Bases is all about wringing out useful information from “Big Data” through critical reasoning, risk assessment, and an undeniable passion for baseball.
And not necessarily in that order.