The Zen of Manny Ramirez & Joe Torre

I'm a huge baseball fan. Anyone that knows me, knows this. So, how does Manny & Torre fir into a financial blog? This is how.



Manny Ramirez


Everyone has heard by now that Manny stated if the Red Sox lose and are out of the playoffs, "There's always next year. It's not like it's the end of the world." Some people got upset. Ramirez must not care by saying this. Some people resorted to the , "Manny being Manny," catch-all excuse. And others thought, like I do...Manny actually had it right.

It's not like he doesn't care. He works hard at his job and is good at it. He is going to go out and play the way he always does. If they win, they win and they keep playing. If they lose, well, we will try again.

Isn't that what investing is about? We try our hardest to make the best decisions that we can. Sometimes we succeed and pat ourselves on the back and think we are great. But when we make a mistake? It can shake our confidence and make us want to pull all of our money out of the markets and never come back. But remember, "It's not the end of the world." Manny said. Friday and this week in general, frankly stunk for the market but it's not the end of the world. Yes, you probably lost money this week, no matter where you had it. You probably lost more if you owned financials in your portfolio. "There is always next year," said the prophet Manny. Monday the stock market will open and we will try again. And if that doesn't work there is always Tuesday. But you stick with it. You don't let one day define you. There is always another chance in the market. You just have to have the confidence and coolness that it will turn in your direction.

Joe Torre

So Joe Torre turned down an offer that would have paid him a base salary less than what he was currently getting. The contract was laiden with team performance incentives and if the team reached the world series his next year was guaranteed for a much higher amount. And no matter how you looked at the contract Joe Torre was to remain the highest paid manager in baseball. But Torre turned it down and walked away. Why?

For one, it was a major paycut of $2.5 million. The incentives were based on the team reaching the playoffs, winning the division, and championship series, and reaching the world series. All of which, Joe Torre has only an indirect effect on. Torre does not throw a pitch, field a ball, swing a bat, or run the bases. He puts the lineup together and manages the game. Injuries, age, and players having a down season, he can't control. That is why the contract was insulting. But it was even more than just that. Ownership is changing hands. It's not just George now. It's George, his sons, Brian Cashman, and others calling the shots. The Yankees have changed.

How does this relate to the stock market? Say you have a stock that you have loved for years, like 12 years. And the stock has underperformed comparable to it's past performance for the last few years. And now image that management of your favorite stock is changing, and you're not sure that the change is positive. It's probably time to sell.

A future example of this would be when Steve Jobs plans on leaving Apple. How much premium does the fact Steve Jobs works there does the stock have? I would say at least 10%. That is why the option back-dating issues at Apple last year was a big deal. Remember how much the company tried to separate Jobs from that issue?

Torre left the Yankees for the same reason you may have to leave one of your favorite stock picks. It isn't what it used to be and the future isn't so great either.