1 Comment

A great follow-up to my just posted comment. This feels so smart to me. Understand where you realistically are vis-a-vis the World Series and proceed accordingly instead of placating the merchants of false hope.

The Rays are nothing if not shrewd stock options traders - selling option calls for their entire roster to desperate delusional buyers who are overly bullish on the future for a high strike price and with the trade deadline acting as the time to maturity. If they get their price and the option is called (a trade) - great. They had a nice ride up with the asset and are exiting the security at a very good price to invest elsewhere.

To my last comment on the trade deadline, options investors use algorithms (e.g. Black-Scholes) to analytically look at a security's performance and figure out buying, selling and on what terms. No reason that baseball shouldn't be doing the same with trades instead of making calls at the deadline and seeing what they can get.

At a higher level, what Tampa Bay seems to be doing is viewing their players as securities on the stock market and building their portfolio as investments over a specified time horizon. This is a terrific way to analyze at these deals and way more than I see with other teams who have no strategy or philosophy at all other than "gosh, ESPN says we should be buyers."

Now, just like the stock market, you need to make sure your next securities are good ones with growth, or you'll end up with a portfolio looking like the Oakland A's.

Expand full comment