The article below highlights how the right trend following algorithm can lead to excellence in various industries, from individual investing to professional sports. Trend following has even helped to produce the Red Sox Baseball Dynasty.
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John Henry and the Making of a Red Sox Baseball Dynasty
Joshua Green, 4/24/14
It’s Opening Day at Fenway Park, more than an hour before game time, and the seats are already jammed. No surprise here. Boston Red Sox fans feed on emotion. Today’s capacity crowd skipped work and school for the chance to mainline the best feeling of all: to celebrate as their team collects its championship rings for winning last fall’s World Series.
In Boston, they don’t skimp on pageantry. The ring ceremony features firefighters, Boston Marathon bombing victims, and a first pitch from the beloved, cancer-stricken former mayor, Tom Menino. The Boston Pops Orchestra materializes in right field to play A Hymn to New England. Colorfully plumed Irish step dancers leap and kick in both batting circles.
Amid all this, a man stands quietly at the end of a red carpet near first base and a table spread with jewelry. John Henry, 64, the principal owner, never says a word. No one really notices him or his partners, Larry Lucchino and Tom Werner, until the players emerge from the dugout to collect a ring and a handshake.
To Red Sox Nation, this is a glorious, weirdly familiar scene. When Henry’s ownership group beat out local bidders for the team in 2002, they were greeted as carpetbaggers. The Boston Herald ran a front-page mock-up of the Fenway scoreboard that read: “Visitors 1, Boston 0.” “Generally, if you aren’t born in New England,” says Henry, “New Englanders don’t ever consider you as locals.” But the hostility didn’t last. Henry won a place in the heart of every Red Sox fan in 2004 by breaking the “Curse of the Bambino”—the 86-year World Series title drought that had plagued the team ever since it sold Babe Ruth to the New York Yankees in 1919. A second title, in 2007, proved this was no fluke. This latest one suggests that Boston’s baseball saga has shifted from misery to dynasty. Along the way, flinty New Englanders have adopted Henry as one of their own. “When I bought the Boston Globe last year,” he says, “I kept hearing and reading that people felt it was great that a ‘local owner’ had purchased it.”
As sports saviors go, Henry cuts an unusual figure. He has a thatch of gray hair, parchment skin, and black-framed glasses. When he arrived in sparkling Fort Myers, Fla., for spring training, he floated through the Red Sox’s new $78 million facility in his customary dark jeans and blazer, beneath a giant black umbrella he carried to ward off the sun. With everyone else in golf wear, he looked like the Angel of Death. “A strange and wonderful man,” says Hall of Fame baseball writer Peter Gammons. “He don’t talk much,” says star slugger David Ortiz. “But we appreciate what he’s done for the team.”
For so prominent a figure, Henry is a bit of a mystery. He limits contact with the press and, when he does communicate, prefers e-mail. In person, he’s so reserved that it often appears as if he’s working out a difficult algebraic formula in his head. Which is what he may, in fact, be doing. “He’s the most mathematically talented person I’ve ever met,” says Lucchino, the team’s co-owner and chief executive officer. “I think that element of the game very much appeals to him. And he’s a competitive guy. He wants to win. He wants to measure his success. When you put it all together, he’s got more dimensions than most baseball owners.”
As different as he may seem, Henry captures baseball’s current era. A mathematical whiz who made a fortune as a pioneering trader of commodities futures, he’s part of a wave of owners from the financial world that’s sweeping professional sports. In baseball, this includes Tampa Bay Rays owner Stuart Sternberg, a former Goldman Sachs partner, and Milwaukee Brewers owner Mark Attanasio, founder of the investment firm Crescent Capital Group. All are keenly attuned to the statistical revolution that has upended the game and compete as vigorously against each other as anyone on Wall Street. Last year, Henry shut down his commodities trading firm to concentrate on his many other endeavors. In addition to the Globe (where I’m a contributor), he and his partners own the English Premier League soccer team Liverpool and a stake in Nascar’s Roush Fenway Racing team. But just as his trading algorithms did, baseball has furnished him with the most spectacular payoffs.
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