Applying the Moneyball Method to goods and services outside baseball, and to secondary market securities like stocks and bonds, is a noble venture. But it does not transfer to everything with equal efficiency and to some things not at all. On the plus side, statistical analysis is essential for casinos, prediction markets and other games of chance – and it has also proven its value in biology, engineering and chess.
Conversely, the two services I described in a previous essay – child care for infants and toddlers plus state-mandated childhood education – are not compatible with Moneyball. But because they are highly localized and personal services that are heavily taxed and regulated, I made the comparison anyway. Child care and education deserve better than the emotional rants of the collectivist and altruistic voices of the State who dominate academia and media.
Compounding the problem, “working families” and “improving lives” are the sacred trust that both major parties have assumed for themselves. But none of that is sacred or the duty of a legitimate government. Those catchphrases are ambiguous, meaningless terms that sound good only to a culture trained in the morality of good intentions.
But this is election season in America, and the wizards of wastage have driven their “affordability crisis” bandwagon through primary elections on their road to serfdom – for you. Accordingly, I will use this space to describe the application of The Moneyball Method to two more sets of goods and services in high demand. And to be consistent, I will apply the same premise as before:
For goods and services that do not lend themselves to quantitative analysis, the first step is to find ways to reject the established bureaucracy. Second is to acquire competitive intelligence, find cheap and reliable talent, and save money. And third is to take back ownership of our lives from the “well-intentioned” bureaucrats lining their own pockets.
Home Ownership
In the case of purchasing a home, it not only lends itself to quantitative analysis, but there was an active business model that rejected the established bureaucracy, offered competitive intelligence, and provided access to cheap and reliable talent. The company was REX (Real Estate Exchange), and it was founded by Jack Ryan in 2015. REX charged sellers about 2.5% - and to keep costs down, it used predictive analytics and digital technology that rendered the established bureaucracy obsolete.
Sound familiar? For perspective, the standard 6% commission on the purchase/sale of a $300,000 home totals $18,000 - and is roughly equivalent to one year of child care at a licensed day care facility or an entry-level full-time job paying $9 per hour. Naturally, a $600,000 residential transaction will cost the buyer/seller $36,000.
For the sake of argument, that fee may have been reasonable when it was first established in 1939, but there have been a few technological advancements since then. More specifically, finance journalist John Tamny reported this in his 2024 book, Bringing Adam Smith into the American Home:
Real estate brokers were essentially the last expensive intermediaries standing. The widespread adoption of internet technology dramatically lowered the buying and selling costs of nearly every asset in the US – except for homes. The stock and bond markets are possibly the most obvious form of the movement toward direct-to-consumer platforms . . . empowering the consumer with information at low costs.
Bypassing the agent/broker, REX did not list their properties on the National Association of Realtors Multiple Listing Service (MLS) database. Instead, its listings appeared on the Zillow, Trulia, Google, Facebook, and Instagram platforms. As Jack Ryan tells it:
Lynley Sides and I founded REX . . . to bring the shareholder revolution and consumer-first orientation to the largest industry in the U. S., which had successfully and supernaturally kept competition out for decades.”
That deserves some explanation. The shareholder revolution to which Ryan refers is the value released from the dormant assets of inefficient companies serving their entrenched bureaucracies. By the 1970s, publicly traded companies were managed by corporate bureaucracies that owned little stock and controlled the board members who were more friendly to senior management than investors.
Frequently, these conglomerates were not innovative, had become stagnant, and their underlying asset values attracted the attention of corporate raiders who acquired enough stock to obtain a controlling interest. It was such a healthy development that was demonized by Hollywood with the 1987 hit movie titled Wall Street starring Michael Douglas and Charlie Sheen.
Specifically, it featured leveraged buyouts during the 1980s and 90s for the long-term benefit of stockholders and customers. Yes, the interests of investors and customers are aligned – despite what we hear from the nattering nabobs in politics and media.
Regarding REX, it ran afoul of one of the top two lobbying groups in America. The National Association of Realtors (NAR) and the US Chamber of Commerce have traded spots for years - and with the acquisition of Zillow and its integration into the MLS system in 2021, REX was relegated to nearly invisible status and forced out of business.
Medical Tourism
Not surprisingly, and as reported by InvestmentBank, the buyout of medical doctors’ practices in America by Physician Practice Management Companies (PPMC) was also a phenomenon during the same period:
During the 1990s, competition to consolidate physician practices reached a feverish pitch with the emergence of Health Maintenance Organizations (HMOs), and the resulting joint ventures formed to integrate and operate acquisitions while adhering to federal and state regulations.
But compliance with federal and state regulations is not aligned with the interests of shareholders and customers – and the PPMC business model eventually collapsed. Inevitably, the next wave of physician practice buyouts coincided with the Affordable Care Act (ACA) scam:
Several factors are attributed to the most recent surge in physician practice acquisitions by hospitals. In 2009, healthcare costs consumed 17.3% of GDP or $2.5 trillion according to the Center for Medicare and Medicaid Services (CMS), and since then healthcare spending has increased to $3.5 trillion, accounting for 17.9% of GDP.
Clearly, this trend is the opposite of The Moneyball Method, but there is another promising trend in favor of cheap talent trained at the best medical schools in America. These are professionals who deliver high-quality medical procedures and treatment at a fraction of the cost of state-sponsored “affordable” care.
Also known as “medical tourism,” patients must travel to another country to gain access to the substantial cost savings. And because medical procedures may involve many days or weeks, there are opportunities to experience other cities, cultures, and climates. One such business is MedEscape (not Medscape) that caters to customers from the United States and Canada.
Accordingly, they have vetted and partnered with professionals in Mexico City, Costa Rica, and Panama. But make no mistake, I have no experience with MedEscape or any other medical tourism agent. This reference is not any kind of recommendation or endorsement.
The Moneyball Method
What it does is illustrate an expanding new business model for objective data on high-quality providers at highly discounted prices that avoid the entrenched bureaucracy promoting collectivized, single-payer systems.
And with the assistance of your favorite AI agent, you should be able to search for any procedure that interests you and discover where in the world the greatest values are to be found. The same was true for traditional home buying when REX was able to compete on the power of prices and information instead of the power of political pull.
However, the REX reduction in the cost of buying a home by 3.5% may have been a significant cost savings, but the price of real estate must be understood in the context of existing assets. Hard assets like homes and precious metals are not wealth-producing. Their dollar price appreciation is largely due to the devaluation of the dollar, and their historic increase in dollar price is the market giving us valuable information: economic intrusion by the force of government is destructive, and value is most likely to be discovered where State regulation is least.
That includes direct exchange with government agencies and with private companies that are subsidized by or that endorse government agencies. Ultimately, the only closed economy is the global economy; dental, cosmetic, and surgical needs may be better treated in locations outside the United States, and owning a home may restrict your ability to seize opportunities out of state. That is The Moneyball Method.