NBA teams overlooked Jeremy Lin for the same reason so-called experts first ignore stocks, business pioneers and anything else that defies expectations.
"We are just not as smart as we think we are," said Bill James, the statistician and author who inspired Billy Beane of "Moneyball" fame to choose baseball players by new standards.
Lin's rise from scrub to a Knicks savior has provided a lesson in valuation far beyond sports. He went undrafted after college and was cut twice before the season. Yet he scored more points in his first five starts than any player in NBA history while leading the Knicks to seven straight victories.
How could this have happened?
Those paid to secure the top talent missed the signs of Lin's worth for years. But if Apple could fire Steve Jobs, then it makes sense that the metrics by which we measure a basketball player could fail as well, experts told The Huffington Post.
"The human tendency is to think in terms of a model," said Andrew Lo, a professor of finance at the MIT Sloan School of Management. "We have a model for what a basketball player should look like, be like and act like. It's the same for what a good firm model or stock might look like. Occasionally, our preconceived notions are shattered."
Lo said that evaluators in any field develop a diagnostic short-hand to make many decisions quickly, and success that deviates from those standards should force evaluators to adopt a more sophisticated scale. In basketball terms, the short-sighted scouts who pored over statistics and video of Lin will have to eventually alter their paradigm to fit more players like him, Lo said. There was objective data that somewhat predicted Lin's success years ago, the professor pointed out. For instance, Lin guided his high school team to the California state championship over one of the country's strongest basketball programs. At Harvard, he scored 30 points against a 13th-ranked Connecticut team.
Lo equated Lin's ascent to the index fund Vanguard in the 1970s. No one saw it coming. Back then, observers thought picking 500 companies based on market cap was absurd. "It's become a multi-trillion dollar industry that has provided tremendous value for all investors," Lo said.
There were a few obscure fans who spotted Lin, including a vegan FedEx delivery guy who Wall Street Journal sports columnist Jason Gay wrote about on Wednesday. Ed Weiland's "eerily prescient" 2010 post on Lin is now making the rounds online.
Economist Jeremy Siegel, a professor at the University of Pennsylvania's Wharton School, said Lin's fairy tale debunks conventional wisdom in valuation. "Sometimes what we think are the best characteristics don't prove to be," he said. "In the stock market, most people think about growth, growth, growth, and don't think about price. They often buy overpriced stocks that don't do well."
It's the unseen that will ultimately determine true value, said Jeff Sica, the president of SICA Wealth Management. A company will often pick a new CEO who was the CEO of another successful company, or a prestigious investment firm will likely pluck its new talent from only the best schools, Sica said. Factors like a candidate's enterprise or temperament often take a back seat. In Lin's case, Sica said, "You can't measure someone's desire and intensity to succeed. The same holds for business leaders."
Sica, a sports buff, points to the folly of the annual NFL Combine (starting Feb. 22) to assess talent before the league draft. Players sprint, bench press, jump and run agility drills before all 32 teams. None of the activities comes close to playing 11-on-11 tackle football. Yet a prospect's 40-yard dash time can elevate or drop him several notches in the draft.
"Tom Brady didn't look like a superstar," he said, referring to the infamous dossier photo of a pasty, undefined Brady at the 2000 combine. Brady, eventually drafted by the New England Patriots in the sixth round, also ran a turtle-like 5.2 40-yard dash. But it didn't get in the way of him reaching five Super Bowls and winning three of them.
"You're turning the evaluation product into a computation mode, trying to oversimplify a complicated process," Sica said.
Author Bill James, who gained fame for his "Baseball Abstract" books, has made a career of overhauling the statistics that baseball holds sacred in assessing talent. Basketball isn't his game, but the lesson of Lin is the same. "We buy into simplifications of the universe which give us the illusion of understanding," he wrote in an email. "Those simplifications -- computer models, adages, homilies, religions, philosophies, experience, etc. -- are very often just dead wrong."
In Lin's case, about as wrong as they can get.