Has it ever struck you the similarities between playing Championship Manager (circa late 1990’s) and asset management? Today, I noticed how alike the two activities are: first of all in the modus operandi: essentially, you take large amounts of data, both in the form of written news reports and analysts’ reports (or advice from coaches and scouts) as well as large arrays of numbers, which include the basics of the income statement and the balance sheet (in addition to the almost infinite number of ratios and metrics that people have devised) on the financial side and the players’ attributes (both shown and hidden), form and average rating on the football side.
And what about the purpose of the exercise: in asset management you pick a portfolio of stocks and then you adjust that portfolio over a given investment horizon: in Championship Manager, you assemble a squad of player, and then change your starting lineup as the season progresses. The two fields even share some terminology: rotation, for example, can be applied to football (as in squad rotation: changing your team to ensure that the players don’t get overly tired) and sector rotation (where some sectors increase in value relative to others).
So, are there any lessons to be learnt by one side from the other. Well, I would certainly not be surprised to find out that many of today’s fund managers first learnt the numerical skills that they use in their job embarking on a cup run or wining the league and I certainly think the makers of the Bloomberg terminal could learn a thing or two from the game designers. And what about the other direction? Well, maybe you might say that the gamers should take on some of the fund managers’ seriousness, but rest assured, if you’ve ever played one of these games, you’ll know that after a few virtual weeks you’ll be taking it quite seriously enough!
