WHAT IPL-2025 CAN TEACH EQUITY INVESTORS ABOUT PORTFOLIO MANAGEMENT

In other words, player selection/stock-picking is only half the job.

- Arihant Panagariya

Michael Lewis, the acclaimed financial writer, may not have had the stock-market in mind when he wrote the bestseller-Moneyball. The book tracks the journey of Billy Beane, a baseball team manager, who employs innovative methods (mostly statistics and data) to assemble a team of highly competent players ignored by the traditional scouting system. Beane is often described by investors as someone who used a “value-investing” strategy to “identify players whose output on the field was being dramatically underpriced by the market”.

For the uninitiated, value-investing’s greatest practitioner is the legendary Warren Buffett who has championed the cause of investing in good companies trading at a fair price. In many ways, what Billy Beane and Warren Buffett were trying to achieve is not different from what teams in the Indian Premier League (IPL) aim for: ascertain the value of a player, assign the right price for them, and ideally buy them below it. And ultimately, investors and IPL owners must combine these set of players/stocks into a team/portfolio that outperforms every other team/the overall market.