All this frenzy about choosing sides in the Yao debate is unnecessary. Yeah, you can be a blind Yao hater or a blind Yao lover. But there's a more sensible way to look at it. Think of Yao as a company you're considering investing in. Your job isn't to make a quick decision one way or the other. Your job is to study the company's books, resources, business model, and people as carefully as possible. Only then will you be able to make an informed judgment about its trajectory and at what price (not simply whether) it's worth buying stock in. We have the #1 pick. That's a high price to pay for a player. Our best analysts have gone over to China to check out Yao's books. We've assessed the key variables: his physical performance, his availability for games, his personality, and now his health. We all have friends -- Rocket fans and non-Rocket fans -- who think we'd be nuts to spend the #1 pick on Yao. But ask yourself how many of these friends have sufficient information to evaluate Yao. If they were talking about a company, given how little they really know about it (as opposed to the buzz or simplistic clumsy-big-guy analogies that drive their thinking), would you take their advice to buy or not buy stock in that company? You may have noticed that the buzz around the league about how crazy the Rockets would be to spend the #1 pick on Yao has diminished over the past few weeks. I think the reason should be clear to anyone familiar with the psychology of the stock market: People simply didn't know much about this Yao guy. When you don't know much, you discount heavily for risk. There are two ways to deal with risk. One is to accept it as it is and count it against the idea of buying the company. The other way is to research the company more carefully and determine whether the apparent risk is real. Risk is just a form of uncertainty. You can dissolve much of that uncertainty through investigation. The Rockets have investigated Yao. They have resolved much of the uncertainty. They have decided that the apparent risks of drafting him -- athletic, political, medical -- were exaggerated. The rest of the league sees that we have come to this conclusion and, realizing that we now know much more than they do about the key variables, they've largely stopped badmouthing Yao. Sure, there remains some risk in drafting Yao. But a lot of the risk that was originally part of the equation is just plain gone. Yao is a much surer bet today than he was a few weeks ago. Don't credit that to speculation or luck. Credit it to hard work.
What if, after researching all the said fundamentals and convincing yourself that you'll make a ton of money on the stock, your wife says she'll leave you if you spend the money? Let's say your wife looks like Cindy Crawford, (hold it, Crawford's too smart for this analogy. Let's go with Pamela Anderson) do you still buy the stock?
Hell yea! If your good enuff (or hung enuff) to get Pam Anderson in the first place...you could get another one just like her easy.
Originally posted by grummett What if, after researching all the said fundamentals and convincing yourself that you'll make a ton of money on the stock, your wife says she'll leave you if you spend the money? Let's say your wife looks like Cindy Crawford, (hold it, Crawford's too smart for this analogy. Let's go with Pamela Anderson) do you still buy the stock? You buy the stock!! You are more intelligent than your bimbo wife and you know that with your newfound wealth she will fall in love with you again. Even if she does leave you know that since you now have a “ton of money” there will be no shortage of beautiful women willing to take her place.
While the skank may play a good up and down, physical game, she's not the only one out there that can handle the ball(s).
I can't decide which of Will's posts I like more -- the one sentence pithy ones that destroy other posters in 10 words or less; or the multi-paragraph posts peppered with logic and/or on-point analogies. I'm going to trust our professional scouts. We sent one guy over there to follow Yao's team around! I think we have as good a feel for this investment as anyone in the league. We're ready to buy. The price is steep, but the return could potentially be greater than any other investment out there.
Good points about assessing risk, but I don't think that's the best analogy: comparing a draft pick to investing in a company. All companies and ALL draft picks have some inherent risk. My personal opinion is that Ming has more risk than others (to a degree, that's tempered by the fact that he's so damn tall). Regardless, the best way to cut down on risk in investing is to diversify. You can't exactly do that with draft picks...unless you could trade the first pick for say....the third, fourth, and fifth....which, needless to say, probably won't ever happen. Sorry, Will....I enjoy your posts as much as the next guy, but I'm not going to join in on the usual Will Stroke Fest....I don't think the analogy holds. And although I can't say that I always appreciate the way the Troy's and the Rocket!!!'s of this world express themselves, I'm pretty sure there is quite a bit of posturing going on by ALL sides. I'm anxiously awaiting draft night because I really don't have a strong feeling one way or the other as to what will actually happen. I'm pretty sure there's a big Rocket's jersey that's already made up with the name "Ming" (or is it "Yao") on it, but I won't be surprised if it never gets handed to the big guy. And if it does.....I won't be surprised either.
You diversify in order to maximize your reward/risk ratio. And indeed, a diversification strategy for the Rockets could lead to a great risk/reward ratio, which might lead to a long tradition of making regular play-off appearances at a reasonable budget. But the "financial" objectives for most fans here, I think, is different. In this case, maximizing reward is every bit as important as a good risk/reward ratio. *IF* winning the NBA championship is the ultimate goal, then the Rockets investment strategy has to take that into account... and in this case, that means betting.. uh, I mean investing... it all on number 1.