The Navigational Chart
Moneyball Book Review Analysis #4
On July 26, 2025, Forbes published a book review written by John Tamny of my book, The Moneyball Method. That review was also published on July 18, 2025, at RealClearMarkets.com. This brief essay begins with an excerpt from the fifth paragraph of the Forbes review:
Shupe chooses reality and aims to convey it to his readers. He tells them to “replace the stress and errors of predicting the future and beating the market with the resilience of objective data.” From there, he notes that “the objective investor chooses the destination and uses historical data for the navigational chart.”
While the previous essay mentioned the defined objectives of the investor as the destination, this essay will focus on the navigational chart. That is because reliable data is needed to illustrate the uncertainty and risks of market performance. Otherwise, strategy decisions will be as unreliable as macroeconomic forecasts and market predictions. For historical perspective from Chapter Five,
The exchange of information fostered by Lloyd expanded to a network of correspondents in shipping centers all over the world . . . Each variable had countless factors affecting their likelihood and successful traders had to eliminate sloppy data.
Ultimately, all relevant inputs add to price discovery by traders: “By pricing risk, Lloyd’s of London accelerated the pace of peaceful human progress.” And for today’s investors, the chart is written by the vast network of traders that are the price mechanism for each distinct asset class of securities (stocks, bonds, cash and their subsectors). In fact, historical price behavior becomes the defining attributes for them.
Qualitatively, each asset class may be defined by certain contractual elements with the corporate and government institutions that issue securities (equity, fixed income, hybrid) or other descriptors (size, style, tax status). But Modern Portfolio Theory (MPT) defines them objectively and quantitatively by their range of historical returns (median return and standard deviation) and their relative price movements among each other (correlation).
Combined, those become the signature for each asset class. More specifically, from Chapter Six,
A goal-oriented middle-class investor can learn their location in the world of personal finance with cash flow and confidence coordinates plotted on their Funding Status report. To continue the navigational metaphor, longitude is internal – the investor’s spending capacity; latitude is external – the market-driven sequence of investment returns over the charted course of their lifetime.
That is reality. To learn more, please click the link below:
https://www.amazon.com/Moneyball-Method-Middle-Class-Manifesto-Objective/dp/1696009111/