Wednesday, May 26, 1999

Red Sox, Yankees, the Market

by Bob Bobala (TMF Bobala)

It's summertime, and there's nothing more I want to do than stop paying attention to the daily performance of my stocks. Given my obsessive character traits, this has been proving easier said than done.

I've tried, though. At this time of year, I've come up with a potentially fitting substitute for portfolio obsession: baseball. Well, not just baseball, really. I'm from Massachusetts as luck would have it, so I'm genetically predisposed to root for the Red Sox. This is a heavy burden to bear, as anybody from New England will tell you. I tried to throw it off in 1978 after the Sox blew a 14-game lead to the Yankees, who eventually went on to win the World Series.

After that fiasco, I didn't watch another Red Sox game until they were in the American League Championship series in 1986. Of course, after being within one strike of winning the World Series that year, they lost it to the Mets. I should have sworn them off then and started following the stock market instead. I was a freshman in college at the time, and I'd just sold my souped-up 1969 Camaro for $6000. Imagine the possibilities. I could have invested in a long-shot software company named Microsoft that had just gone public that year. My $6000 would have grown to over $2 million. Even if I played it safe and put the money into soft drink stalwart Coca-Cola, it would have grown to a nice $180,000 with dividends reinvested.

Instead, I spent that money on pizza, beer, and a degree in English literature. Okay, okay, worthy causes -- and you can't very well look back and dream about what might have been, can you? While that money could have been compounding, the Red Sox got swept out of their next three playoff appearances over the course of a decade. Now here I am in the summer of 1999, trying to avoid looking at my stocks while I watch the Sox.

It's not so easy. In fact, I'm finding the two obsessions rather similar, especially because of the Internet. Every morning, instead of checking on my portfolio, I'm off to The Boston Globe's site to read the latest news coming out of the Red Sox clubhouse. I already know who won last night's game, because I followed along with it in real time on or I listened to it via on Major League Baseball's website.

I am less obsessed with the market now. Intel is down $3 today. I don't care. Nomar Garciaparra is batting .330. Cisco Systems is down $5 today? I don't care. Pedro Martinez's ERA is 1.98, and he just got his ninth win of the season.

Of course, a baseball fan needs the same temperament as a portfolio manager. It's a long season. You can't get too high during the winning streaks or too down during the losses. After their initial public offering in April, the Red Sox soared on a five-game winning streak. Then they missed earnings estimates and languished below .500 for a while. Then, after management announced that the team really could hit without the departed Mo Vaughn, the team's stock ran up again. They beat the vaunted World Champion Yankees and took first place. What a wild ride. It's been as bad as watching

Still, it's only May 26, and Boston is playing the Yankees again in New York this week. Anything could happen. Baseball is a lot like the stock market. I have to keep my eyes on the long term, just like with my portfolio. We'll see where the Red Sox are in October and where my portfolio is in 15 or 20 years. After all, if you bought one $40 share of Coca-Cola when it went public in 1919, one year after the Red Sox last won the World Series, it'd be worth over $5 million now with dividends reinvested.

There are no guarantees, but if historical trends continue, I think I have a pretty decent chance of being a millionaire during my retirement some 30 years from now. Will the Red Sox bring a championship to Boston during that time frame? Hey, past performance is not a guarantee of future results.

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