About the Author
Prior to writing Trading Bases, author Joseph Peta spent fifteen years trading stocks at one of the biggest banks on Wall Street. One day, while crossing a downtown Manhattan street on foot, Peta was hit by an NYC ambulance. Confined to a wheelchair and his apartment, with his family on the other side of the country, Peta began watching baseball again to cheer himself up. One day, Peta had an epiphany of sorts and decided to apply his Wall Street honed risk-analysis skills and the methods of sabermetrics to gain an advantage against Vegas betting lines.
Peta’s book Trading Bases: A Story about Wall Street, Gambling, and Baseball is a fantastic description of how the author took the betting world by storm to the tune of 41% returns on his self-managed baseball “hedge fund.” At its core, Trading Bases is about the “love of critical reasoning, risk management, and baseball,” but not necessarily in that order. Currently, Peta is the Managing Director of the San Francisco branch of Novus Partners, Inc. While perhaps not what most would classify as a “sports analytics” book, Peta’s aptly interweaves a love of critical reasoning with baseball, gambling, Wall Street, and analytics.
Wall Street, Gambling, and Baseball
One of the more unique aspects of Trading Bases is its structure, which is broken down into three parts: (1) The Model; (2) The Launch: and (3) Success. This structure makes Trading Bases read more like a story than an informative breakdown of numbers and finance. While the timeline is based on the development, implementation, and results of Peta’s baseball gambling model, Peta intercuts his main story with chapters on his own Wall Street experiences, his love of baseball, and a few basic primers on sports betting. The structure is similar to how Michael Lewis intercut the personal history of GM Billy Beane with the Oakland Athletics 2002 season in his national best-seller Moneyball.
About one-third of Trading Bases is devoted to explaining how Peta developed a model for predicting the outcome of baseball games based on daily matchups. During this time, the author dives into the works of analytical icons Bill James and Nate Silver, while also explaining how he developed his own method for stripping luck out of past team performances. By removing what Peta termed “Cluster Luck” from the equation, Peta believed he could more accurately predict how teams would perform [over a season and daily] than Vegas line makers. This model resulted in a 41% return on the author’s investment during the 2011 season, with daily volatility ratings nearly identical to that of stock index funds. You will have to read the book for more details, but Peta does a wonderful job of using dialogue to explain his numbers and the model as a whole. The model is where you will find the majority of analytical discussions in this book, but the author’s dialogue is so strong and cleverly interwoven that the material is easy to digest.
While more skewed to baseball and gambling fans alike, those who share the sports analytics industry’s love of critical reasoning will enjoy the book as well. Much of the author’s dialogue is devoted to instructing readers on how to “manage risk,” and to trust that numbers and logic will usually win out in the end. Peta brings readers to ballparks in San Francisco, trading floors and baseball bars in New York, and sports books in Las Vegas all while tracking the progress of his model and wagers. The dialogue has been described as “often humorous and occasionally touching,” while providing lessons that anyone from the novice baseball fan to the esteemed stock broker can appreciate and use to enhance their everyday lives.