Monday, February 20, 2012

Linsanity: there's gold in them thar benches

Jeremy Lin is the hottest ticket in NY right. You know the story, this guy was undrafted, cut from 2 teams this year, sitting the bench, got a chance and has been averaging over 20 points a game every since.  The Knicks have only lost once in their last 10 games, prior to that their record was 8-15.  Now the question everyone is asking is "how did so many teams miss that he was that good?"  I'll tell you how. The same reason coaches flock to the NFL Combine every year looking for the next great talent, but miss on pretty much 90% of their picks. Here's an article on the top 100 worst NFL picks. Granted, it's just someone's opinion on how bad these picks are in the realm of badness, but there's no disputing none of these guys set the world on fire. Yet they all went to the Combine and they all did well in it. 

Coaches missed Jeremy Lin because instead of looking for talent they played it safe. They had certain players that were highly paid so they went with them.   The Knicks had Carmelo Anthony and Amare Stoudemire but could only win 8 of 22 games. This guy comes off the bench and leads them to 7 out 7, including a 38 point performance against the Lakers.  Is he all that special?  Not really, there have been many players who have led their teams to a string of victories. But how many people have dropped 38 points on Kobe Bryant's Lakers?   Every team has their 7 man rotation, meaning unless the game is a straight up blow out, these are the only guys who will get any meaningful minutes. How do you evaluate a performer who's getting 4 minutes a week out of a possible 240?  You don't. You pick your 7 and let the rest of the team get scraps, garbage minutes.  You focus on your starting 5 against your opponent's starting 5 instead of using all 10-12 of your players to attack his 5.  You can't tell me a fresh, hungry Troy Murphy is not better than a tired Pau Gasol.  If not, why is he on the team? When the Dallas Cowboys had their last great Superbowl run (2 of 3) it was mostly because Jimmy Johnson was rotating players every down. As a result, they were always pretty fresh, facing guys who had been pounded on for the last 6-7 straight plays.

My point is that if more coaches coached instead of "giving the fans what they want" (newsflash: fans want wins.) more coaches would probably find more gems on their benches.  Guys who could change the team for the better if given the opportunity.  Had it not been for fluke injuries, Jeremy Lin would still be sitting at the end of the bench, or at home, and the Knicks would be looking at yet another really, really bad season.  Instead, the word "Playoffs" is being not whispered, but yelled in MSG.

Why is this important to investors? Because it's easy as an investor to have this same play it safe mentality..  Pick one or two stocks and let the rest of your portfolio languish. Remember, every stock has the opportunity to be a star.  Watch them all, and act accordingly.

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