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And every story ends
But we could still pretend
Every single moment will be just as we planned
It was some type of love

In the beginning, I wasn’t a Philadelphia sports fan. I rooted for the Chicago Bulls, because when you grow up in the Midwest in the mid-90’s, that’s what you do (thank you WGN). But in an appeal by the left side of my brain, I also picked the San Francisco 49ers. Before I knew that Stanford was a good school (being Asian, this didn’t take long) or what was a QB rating, there was something fascinating about a team constructed by Professor Bill Walsh and a brainy looking Mormon quarterback beating down the brutes from Dallas and the cowboy from Green Bay.

And then in 1996, my parents moved us from the backwaters of rural Ohio to the slightly less rural suburbs of the Tri-State Area. That was also the year that the local professional basketball team drafted a skinny guard from Georgetown with the first overall pick.

By 2001, I was a hardcore Philadelphia fan. I screamed at the dink-and-dunk Eagles every Sunday afternoon and listened to WIP sports radio hosts scream at each other on weekday nights. I wore a Desjardins jersey to play street hockey in the neighborhood, and while my friends copied Jay-Z, my ballcap of choice was always red with a curved white P on it. But for a tall skinny kid who couldn’t jump very high at all, I was most transfixed by the short skinny blur that was #3 on the Sixers. In the days of 56k modems, I spent a few dozen nights a year tracking stats on loose-leaf paper while following Tom McGinnis call games on the radio and cutting standings out of the Philadelphia Inquirer. When our misunderstood and inefficient superstar dragged the team into the NBA Finals that year, I was on an overnight school field trip to study horseshoe crabs at the beach. Luckily the chaperones allowed the students to stay pass bedtime to hear that famous call and from that moment on, I was a Philly fan phan to death.

Unfortunately, as soon as I dived head first into fandom of the 3rd winningest team in NBA history, the nomadic coach nomaded off, the league realized 30 points a game on 40% shooting was easily guardable, and the Bubbachuck-led iteration of the Sixers team peaked. While the rest of the major teams all made a finals appearance in the intervening years, the Sixers finished between 6th and 10th in the conference 9 out of 11 years after the Finals year – a collection of washed up ex-All Stars and mid-first round draft picks hovering in no-man’s land for a decade. There was random dagger moments like an Iguodala game winner against the Finals-bound Magic in 2009 and (sadly) Rose’s torn ACL opening the doors for a run to Game 7 of semi-finals against an on-their-last-legs Celtics team. Not quite good enough. On the flip-side, sitting in last place 7 months before the Oden-Durant 2007 draft, the 5-19 traded Iverson…for veterans that helped the team finish in 12th from last place. The one year the team did actually grab some lottery luck, it jumped from 7th (0.053% of top pick)…to 2nd, in a draft with just one sure thing and one knucklehead. Not quite bad enough. So like Iggy’s weird celebration after that 2009 shot, the team would just randomly get lucky, but never had any follow-thru, and just ended up looking silly with no future plan.

Then on May 14, 2013, the Sixers hired some guy named Sam Hinkie.

Capture

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To support Philadelphia sports means accepting that there will a lifetime of doubt. The facts would state that the 5th largest urban center in America is as large as any sports market outside of LA and NY. But whether its the hangover from losing the US capital in 1789 or having an owner call the city “a small market”, we always doubted if successes were real and if saviors were true.

That’s why, when the Phillies made the 2007 playoffs for the first time in 14 years, I skipped on a couple dinners in order to scrounge up $300 for nosebleed tickets – telling my friend, “we have to go, it might be an once-in-a-lifetime chance.” (I was wrong, but still). And it’s why I knew the aforementioned 2002-2013 Sixers were most likely stuck in purgatory and the 1999-2009 five-time NFC finalist Eagles couldn’t win a Super Bowl with Donovan McNabb aiming for the ground 2 yards in front of the receiver each time. (I was right).

So the hiring of an unknown general manager caused nothing more than a few raised eyebrows in the Delaware Valley that May. But then the 2013 draft happened (see comment section starting around 8:20pm), and everything changed.

Rather than rehash what’s happened over the last 1,013 days. I’ll just point to our roster/draft picks before and after. I’ll also point to the extreme disgust with the strategy from national media.

To me, it was the first time that a Philadelphia team deserved my trust because instead of trying to believe that a square peg would fit into a round hole if you pushed it hard enough, someone at the team decided to throw out all the square peg and just search for a round one instead.

That idea of a perfect fit especially spoke to me because I just had watched what happened when the glove didn’t quite fit. While Boston stumbled into Brady in 2000, we drafted Donovan 8-yards-instead-of-10 McNabb in 1999. While LA found Kobe in 1996, we drafted Allen 40% Iverson 12 picks earlier. Even when we had success, the post-2008 Phillies fell as quickly as it rose because the championship core was composed of 29- and 30-year-olds instead of 23- and 24-year-olds.

So in Hinkie, we finally had someone who treated the fans like adults who wouldn’t be tricked with short-term gains that belied a long-term goal. After all, everyone loves the mantra about no medals for 2nd place, right? Now here was someone who had carefully considered and analyzed the steps needed to have the highest probability of reaching 1st place. Is that the sexiest thing to say? No. But you know what is sexy? Rings. Not bold proclamations that immediately fail.

Maybe I’m too different from the average fan, but I fell for the logical, practical, approach to a decidedly emotional sport. Every time Hinkie spoke, I could see how he was making smart, rational decisions, gathering more facts than anyone else, and then just picking the one with the greatest odds of helping to bring a parade to Broad Street. He dealt with uncertainty in the most coherent manner that I had seen from a sports executive in a while. It wasn’t just a manifesto on sports, but life itself.

When before, I was too poor to afford brand new sneakers that I dislocated my kneecap wearing worn down signature AI shoes, now I tried to go to as many games possible from 150 miles away. I defended the team at social and professional gatherings – everyone seemed to have a hot take, especially as the losses piled up. And did they ever – 200 losses in 3 seasons, a loss every 5 calendar day. And yet I watched the majority of them. So what never made sense to me was that the most hardcore fans were more dedicated than ever, while the vitriol came from the not-even-paying-attention crowd who wanted answers to questions that I didn’t even care to ask (when will it stop? why so many losses today? why not get some veterans? not, does this help us get closer to a championship?). (True to form, the top complaints from national observers – the fans hate this and the team isn’t developing a winning culture – were not grounded in fact, but make logical sense if you just used heuristics.) But no matter. I tuned out all the noise because when you have the smartest guy in the room, my logic said that good process will lead to good results, with the timeline determined just by uncontrollable luck.

Then on April 6, 2016, Sam Hinkie tendered his resignation from the Sixers.

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Look, I get it. I’ve worked in finance for my entire (albeit short) career and have had 4 different business cards in 5 years. Finance, like professional sports, has asymmetrical risks and rewards – there are few winners each year, there is a cadre at the top with all the power/money and a turnstile of workers who can only complain about not getting to the top. There always too much talk about culture and unfounded references to military toughness and attention to detail, but at the end of the day everyone is judged on profit-and-losses win and losses. And, the judging is often unfair and arbitrary due to the vastly different incentives for those giving orders and those taking orders. The fact that Hinkie and the owners both came from this background is not a coincidence. Nor is the fact that Hinkie was told to proceed in pursuit of a single long-term goal and then abruptly told to stop because the short-term results – which the team had decided to ignore in order to provide their greatest competitive advantage – were too bad to the people who didn’t matter (the media outside of Philly).

But I also invest in the stock market for a living. The market is a river that flows in cycles, sometimes overflowing with riches, sometimes stubbornly miserly, but never discriminating between who’s upstream or downstream. The key to surviving then is preparation and a consistent process because research has shown that over the long-run no one can consistently time the market (that is, predicting the ups and downs, not saying it’s impossible to beat the market over a long period of time). But you can get rich by capitalizing when the market is hot and pulling back when the market is not. Well, think about sitting at the blackjack table playing Basic Strategy but never varying your bet or investing your paychecks in a 2% bonds or picking in the middle the of the NBA draft every year. Is it possible that you run into an epic run of Aces or witness bond yields explode or find 5 Draymond Green’s? Sure. But that’s just luck. Eventually, the house/inflation/Lakers always win – the casino taking their 0.5% edge even with Basic Strategy Blackjack or 1% advantage that 2% bonds lose to 3% inflation or the Lakers getting free agents over smaller markets. George Clooney said it better than I. The better way only way to win is to load up the chips when the odds are in your favor and buy stocks when the market is in a 20-year trough in 2009. In other words, stock up on draft picks, young players, cap space, and great practice facilities while the rest of the league is busy losing to the Warriors/Spurs/LeBrons. And that is what I don’t get – that our finance-background owners gave up on simple math after a sample size of two.

So where do I go from here? Hinkie always said, if you think something is going to happen, and it happens, the result shouldn’t impact your view on the situation – ie, put a good player in a bad situation, he’s still a good player. So, if I knew that a bunch of owners that amassed their wealth by buying assets low and selling high had just made 3x their investment in the Sixers and then happened to lose patience with a process that was causing much teeth-gnashing in public, I shouldn’t be all that surprised that this happened. And if I knew that our fund likes to take a long-term view on our stock picks but our owners like to judge us on daily wins and losses, I shouldn’t be all that surprised that a dislocation in the market has us seeing pink, instead of seeing opportunities. In the end, the Process didn’t fail, Sam Hinkie didn’t fail, and our fund didn’t fail, the owners just had different incentives and forgot to tell their manager that short-term uncertainty was actually intolerable. And that’s okay, because humans are ultimately governed by emotions, no matter how irrational those might be. John Maynard Keynes said, “a market can stay irrational longer than you can stay stay solvent” – but Sam Hinkie said if you long science and facts, stay intellectually humble, and keep a long-term view, you have the highest probability of winning. I will find somewhere else. Sam will find somewhere else. What’s happened this year doesn’t mean that we can’t win in that somewhere else if we follow the same Process.