Book review: Trading Bases: How a Wall Street Trader Made a Fortune Betting on Baseball, by Joe Peta

originally posted elsewhere: March 4, 2014

tl;dr: A very good bet to succeed...

Certainly the thought has probably occurred to many avid fans, especially the statistically inclined ones, who intently follow a single major sport: I wonder if I could make a living betting on my favorite sport? Due to circumstances beyond his control that leave him with a lot of time on his hand, author Joe Peta decides to answer that question. One result (I won’t provide a spoiler by saying what happens to his bank account) is the thoroughly enjoyable book Trading Bases. If you like baseball and also have interest in the world of finance, you will find yourself eagerly turning the pages, anxious to learn more about Peta’s methods and his results.

Football, or more precisely betting on football, may be the current national pastime, but by analyzing the differences in the house’s take and the lack of motivation of football teams to beat the spread, Peta presents compelling arguments that betting on baseball is the better value for the serious bettor. The challenge is to develop a method that can, over many games, deliver a winning edge, because (as any serious baseball fan knows) any individual baseball game is highly unpredictable, regardless of who is pitching. Only over the course of many games do the good teams rise to the top; the same is presumably true with baseball betting strategies.

Peta does develop a betting strategy, using some of the key analytical tools from the sabermetric community plus a major insight he claims is his own. To his credit he describes his methodology in a high degree of detail: perhaps enough to attempt to duplicate, if the reader is so interested. He also describes his results, both in quantitative terms as well as the emotional highs and lows he experiences over the course of a full season. Peta comes across as a likeable guy (especially for a Wall Streeter), and the reader can’t help but root for him to succeed.

Trading Bases held my interest right through to the end, even though several times Peta drew extended analogies between his baseball betting activities and certain characteristics of Wall Street. Some of these rang true, some did not. There is supposed to be one big difference between Wall Street and gambling: gambling is a less-than-zero sum game (after the house gets its cut), as the winning gambler is effectively taking money away from the losing gambler (even though Peta continually talks about beating the oddsmakers). That, plus the challenges of beating the odds, is what has kept me from ever attempting to answer the question I posed at the top. But I found it very interesting to read of someone who did.