Of course, I am biased toward my alma mater George Mason, but their recent Final Four run in the NCAA tournament brought forward some interesting analogies – wholly relevant to my typical writings. Consider this story from GMU.edu:
“Economics at Mason a Lot Like Basketball The success of the men’s basketball team has allowed many of Mason’s academic departments to explore their own achievements. Recently, in an article on Slate.com, economic professors Alexander Tabarrok and Peter Boettke compared the Patriots to their department’s own surprising successes. “The George Mason economics department – which didn’t even award PhDs until 1983 – has two Nobel Prize winners on its faculty. What’s remarkable is that Mason’s freewheeling basketball team and its free-market academic teams owe their successes to very similar, market-beating strategies,” they wrote. “George Mason University has excelled on the court and in the classroom by daring to be different. Its basketball team and academic programs began with the (correct) assumption that they couldn’t hope to compete against the top schools in their fields – say, Harvard Law School or the Duke Blue Devils – by directly imitating their methods.” The professors say Mason’s free-market-oriented economics department got started “with a heretical premise: The academic market is inefficient, so how can we exploit it? George Mason University knew it couldn’t afford to be a first-class MIT and didn’t want to be a second-class MIT, so successive chairs of the department, backed by entrepreneurial university presidents George Johnson and Alan Merten, looked for unexploited opportunities.” Some of those opportunities included recruiting world-class, but unconventional, academics. “James Buchanan, George Mason University’s first Nobel Prize winner, has never had an Ivy League position … Gordon Tullock, a potential future Nobelist, has no degree in economics and took only one class in the subject. [Nobel Prize winner] Vernon Smith, who moved his team from the University of Arizona (again, no Harvard) to George Mason University in 2001, had to fight to get people to treat experimental economics as more than a cute parlor game.” The professors concluded, “The odds are still against George Mason University on the court and in classrooms … Building with the odds stacked against you is difficult, but George Mason University proves it can be done. Look for undervalued assets, eschew political correctness and take the long view…”
Trend following is still an undervalued asset!