The Moneyball Portfolio: Finding Overlooked Value

Beating the Market with Data-Driven Decisions

The film Moneyball, based on Michael Lewis’ book, tells the story of the Oakland A’s and their revolutionary approach to baseball. General Manager Billy Beane and his assistant Peter Brand used advanced statistical analysis to identify undervalued players and build a competitive team on a limited budget. Rather than relying on traditional scouting biases—such as appearance, personality, or conventional metrics—they focused on hard data to maximize value. As Peter puts it:

"It's about getting things down to one number. Using stats to reread them, we'll find the value of players that nobody else can see. People are overlooked for a variety of biased reasons and perceived flaws. Age, appearance, personality."

This concept is directly applicable to investing, where psychological biases often lead to mispriced assets. By using a Moneyball approach, investors can avoid overhyped stocks, focus on intrinsic value, and make strategic decisions based on economic fundamentals rather than market sentiment.

*Below are some of our previous articles and analysis from Golden Coast Consultants who had some previous great market calls that are playing today:

Nvidia Overvalued at $150

Tesla Earnings Warn of a Stock Crash

Inflation has the US as Modern Day Rome Burning

Overview

The 2025 Moneyball Investment Strategy was developed by Greg Crennan of Golden Coast Consultants, who has successfully implemented it for his clients. In 2024 Crennan strategy was dubbed the “Carpe Diem” strategy (which can be found HERE) where his Gold call paid out massively in 2024. This approach (Moneyball), applies the principles of Behavioral Game Theory to investing, leveraging market psychology and economic fundamentals to mitigate risk and maximize returns.

With weakening economic indicators, high stock valuations, stagnant earnings growth, and increasing geopolitical risks—particularly the onset of new tariffs and trade tensions in April—traditional stock-heavy portfolios carry heightened risks. (which was previously written about here at the Coastal Journal) Crennan’s strategy tailors investment approaches for two categories of investors:

1. Investors focused on wealth accumulation and long-term asset appreciation

2. High-net-worth investors seeking to preserve and grow wealth

Moneyball Strategy for Wealth Accumulators: Inflation-Proof Asset Growth

For investors who view a 4.25% bond yield as insufficient for long-term wealth accumulation, this strategy prioritizes portfolio growth while managing significant market risks. According to Greg Crennan’s analysis, the likelihood of a broad economic downturn sits at 75%, aligning with other major financial voices. Jeffrey Gundlach, known as the “Bond King,” places recession odds above 50%, while Federal Reserve Chair Jerome Powell just this week (March 19, 2025) recently acknowledged a 25% chance of recession. Wall Street firms have also increased their recession projections, reinforcing the likelihood of lower asset prices in the near term. This significant market risk suggests that the following assets could decline another 20%-50% from today’s prices over the course of the next 12 months, particularly high-flying AI stocks, with a potential correction akin to those of 2008 and 2001. Even gold could experience a pullback of 15-20% before resuming long-term appreciation.

Much like the Moneyball philosophy of finding overlooked value, this strategy focuses on assets that offer the best long-term return potential while minimizing risk. As the Moneyball strategy goes, “It’s about getting things down to one number. Using stats to reread them, we’ll find the value of players that nobody else can see.” Similarly, this investment approach seeks to identify assets with real, long-term value that others may overlook, avoiding speculative hype in favor of sustainable, data-driven growth.

If you’re already invested and willing to take the risk of another drawdown in the market, all you do is sit back and wait for buying opportunities. For those employing a dollar-cost-averaging strategy, it’s important to recognize that volatility is a certainty in the coming months. As market conditions fluctuate, the strategic approach is to wait for those key buying opportunities to arise when prices dip significantly, as they inevitably will.

Key Rationale:

• Bonds lack the appreciation potential needed for wealth accumulation.

• Gold and silver offer long-term protection in an inflationary monetary system.

• Stocks remain essential for compounding returns but require selective exposure.

Building Your Team on Market Drawdowns:

• Index Investing (50%):

  • S&P 500 & NASDAQ ETFs (Dollar-cost averaging into market dips).

• Precious Metals (20%):

  • Gold & Silver ETFs and physical holdings as a hedge against guarantee currency debasement.

• Individual Stocks (30%):

  • The Core Four (AAPL, MSFT, AMZN, GOOGL, selectively on pullbacks and lowered Price to Earnings ratios).

  • Avoid speculative tech stocks and sky high Price to earnings ratios and focus on companies with strong balance sheets and proven earnings resilience.

Game Theory Insight:

This strategy recognizes that investors often chase high-flying stocks at the wrong time. By systematically accumulating undervalued or stable assets, wealth accumulators benefit from compounding returns over decades while minimizing downside risks during periods of bubbles. Like Moneyball’s approach to finding undervalued players, this strategy focuses on identifying the best assets for long-term success, ignoring market noise and short-term hype.

It is crucial to note that this approach is for investors who are not reliant on monthly income, such as bond interest payments, and who do not need immediate liquidity. This is a long-term investment and savings strategy, designed to capitalize on eventual market appreciation.

Additionally, for those investing in individual stocks within the tech sector, it is advisable to prioritize companies with lower price-to-earnings (P/E) ratios. Stocks with lower P/E ratios have greater upside potential if they successfully grow earnings and outperform expectations. In contrast, high P/E stocks such as Tesla and Nvidia have valuations that already price in significant future growth, making additional stock price appreciation more difficult and less likely.

Moneyball Strategy for High-Net-Worth Investors: Investing in Undervalue

For high-net-worth individuals, preserving accumulated wealth becomes just as important as seeking growth. As the economic environment grows more uncertain, the focus shifts from aggressive capital appreciation to avoiding substantial downside risk. In this phase of wealth management, the risk of losing value—especially when the potential for recovery may take years—is far more concerning than chasing speculative gains. This strategy, grounded in the principles of value investing, aligns with the Moneyball approach: finding value where others may overlook it. It’s not about hitting a home run; it’s about consistently getting on base—minimizing risk and setting up long-term sustainable returns. By applying this methodology, high-net-worth investors can avoid catastrophic losses and preserve their wealth in the face of a potentially challenging economy.