By James Virgo, CFA, CFP, MBA
Vice-President and National Lead, MD Private Investment Counsel
Earlier this week, the Chicago Cubs won the World Series of baseball in a dramatic 7 game series and ended the longest championship drought in professional sports history – 108 years!
As a CFA Charterholder, I’m trained to look at history and make educated predictions about the future. Previously as a fixed income analyst, I spent much of my time analyzing data trying to predict the direction of interest rates. When the analyst in me sees a monumental event, 108 years in the making, I wonder if there are any meaningful connections.
I’m not alone:
- Of the 27 World Series played during a U.S. presidential election year, the winning team’s home state voted for the president elect 21 times. Currently, Illinois is projected to vote Democrat.1
- In World Series decided in game 7 during an election year, the league of the winning team correlates to the political party that wins. The Cubs are in the National League which is correlated with the Democrats.2
- Following the last Cubs championship in 1908, the Dow Jones Industrial Average was up 20.3% over the next 12 months.3
While it is fun to consider what the Cubs winning the World Series could mean for the election or markets, my training in statistics reminds me that correlation does not imply causation. To me, the lesson here is what the Cubs did to find success.
No fluke, just people, process and hard work
While nothing in sports is guaranteed, ending the season with the best record and a World Series title did not happen by chance. Baseball is a game of strategy and consistency. The Cubs owners recognized that in order to win it all, they needed the right people and the right processes.
They hired Theo Epstein, a proven baseball executive who helped the Boston Red Sox end their 86 year drought. Focused on winning a World Series, he concentrated on every element that could lead to success, from selecting managers and players, to the food in the clubhouse or the equipment in the training room. He simply followed the same process that brought triumph in Boston.
Epstein did his homework and the results followed, steadily improving the team’s record each year, culminating in this year’s thrilling championship.
So why am I writing about baseball? To win the World Series, the Cubs brought in the right people and followed a proven process. MD’s approach to investment management is similar in many ways.
At MD, we know that success, achieving your financial goals, is no fluke. Our approach, MD PrecisionTM, constructs portfolios specifically to accomplish the personal financial objectives of physicians and their families. To do this, we bring in proven expertise, a combination of the world’s top asset managers to improve the probability of success with disciplined, repeatable processes.
The Chicago Cubs can teach us a lot about finding success. With that being said, I can’t wait to see the election results.