A Brief Book Review of “A Man for All Markets” by Edward O. Thorp and “The Education of a Coach” by David Halberstam
“The museum has mustered an anthology of fragments, a heap of austere evidence for a truth we keep forgetting: that genius demands labour. Bronzino’s brilliant fancies didn’t leap fully fledged from his brain but crawled through a series of studies. Each time he homed in on the ridges of a fist, the hollows between toes or the bulges of fat at the top of a thigh, he refined his imagination and tempered it through technique.” – Ariella Budick (2010)
“I never brag how real I keep it, cause it’s the best secret / I rock a vest, prestigious, Cuban-link flooded Jesus / In a Lex watching Kathie Lee and Regis, my actions are one with the seasons” – Nas (1996)
It was halfway through reading mathematician Edward O. Thorp’s wonderful memoir a couple weeks ago that it dawned on me that when I was done, I should restart a book I had begun reading roughly a decade ago but never finished. That book was the late David Halberstam’s excellent biography of the sometime boy-genius-made-good Bill Belichick. The Super Bowl was about to be played, and while the bungling ownership of the NFL has through its deep ineptitude diminished the league the last few years, as a long-time fan of the New England Patriots gearing up to support the team in their 10th Super Bowl in my sports-viewing lifetime, I wanted to deepen my knowledge of their head coach. But beyond that topicality, I found much in Thorp’s narrative that sparked thoughts of Belichick. While a memoir of a life that revolved around academia, Las Vegas, and Wall Street could on the surface seem very different than a biography of a professional football coach, I found the lessons in both highly complementary. These lessons were only strengthened by the common work ethic, competitiveness, and love of learning the subjects of the two books seem to share.
Both books featured the trials and inventions of original, creative, and cerebral men at the top of highly competitive industries. To be sure, there are marked differences in personality. While Belichick is famously taciturn publicly, distrustful of modern sports media, and unwilling to play along with them on their terms, Thorp has always shown an understated showmanship for marketing his groundbreaking ideas, titling symposiums, papers, and books in ways that always draw an audience. It speaks to Halberstam’s esteem and remarkable abilities as a reporter—as well as their being Nantucket neighbors—to get Belichick to sit down in the summer of 2005 and open up for this book. I have previously read Halberstam’s incredible book The Breaks of the Game (1981) about the 1979–1980 season of the Portland Trail Blazers, which like this book is also a fascinating history of a sport and America, not just a team or a person.
While Thorp and Belichick have taken very different paths in their approaches to sharing the findings of their work, those closest to them seem to consider both innately pensive and private, great teachers, and highly deliberate in building adaptive organizations and learning systems that have earned them and their partners remarkable success. Both Thorp and Belichick are essentially concerned with the economic processes at the core of all decision making; namely the allocation of scarce resources among competing ends, whether those scarce resources be one’s purse at a casino table, the assets under management in one’s portfolio, the endowment of a university, a franchise’s salary cap, a team’s roster and lineup, or one’s own attention span. They are at their hearts hobbyists and amateur theorists who led the professionalization of their passions and became highly successful businessmen. Their similarities are more profound than their differences. In many ways, this speaks to the influence that the older of the two, Thorp, has had on decision theory in the last fifty years.
Coming from families deeply scarred by the Great Depression and that slogged through volatile and low-paying work coming out of it, both men seemed to intimately learn the value of frugality and resourcefulness from an early age. Belichick had the good fortune of being the son of probably the first great scout in football history, Steve Belichick. And in many ways, Halberstam’s book is also a biography of the father. The son of Croatian immigrants, Steve Belichick spent hard-scrabble years as a football player and assistant coach bouncing from frustration to frustration navigating the petty politics and narrow-mindedness of football before finding stability on staff at the Naval Academy in Annapolis, Maryland.
From an early age, Bill was drawn to the game his father loved. He learned quickly how to view and “break down” film of football games and to learn the strengths and weaknesses of opposing teams and players. It was a foundational skill that would serve him well his entire football life, helping him survive the short-tenured jobs of a coach’s career. He turned this exceptional skill at watching game tape into a serious competitive advantage, preparing his teams better than any other in the league and learning his opposition better than they knew themselves. Rather than try to exploit the weaknesses of his opponents, his goal was always to find their strengths and try to take them away, making them uncomfortable and in a position of having to do things they weren’t as used to doing.
This strategy led him to his first major assistant coaching position when he formed partnerships with coach Bill Parcells and linebacker Lawrence Taylor; those partnerships resulted in the New York Giants winning two Super Bowls. It also led him to his first head coaching gig and a few years with the hapless, bumbling Cleveland Browns, where he made the mistakes he would need to learn from to enable his future success. That success would come in his partnership with the Kraft family of the New England Patriots and the quarterback Tom Brady. In Foxboro, MA, they created a system that has so far led to nine Super Bowl appearances and six championships. Belichick is without a doubt the greatest football coach of all time, and arguably the greatest coach or manager in the history of sports (other contenders in my opinion: Red Auerbach, John Wooden, and Sir Alex Ferguson).
Thorp grew up poor near Chicago and in Southern California and demonstrated a love of learning from an early age. He had an impressive curiosity and drive for scientific knowledge, entertaining family friends and relatives by making “rapid approximate calculations” whenever asked or recalling impressive and arcane facts from books he had read seemingly without much trouble. To make his knowledge of physics and chemistry more intuitive, and because to him it was fun, he conducted scientific experiments and pranks at home as a way to test and prove the theories he found in books. Entire textbooks he could devour cover-to-cover and then would mentally review nightly before bed, a habit he has practiced his entire life.
From this early mental hygiene, which privileged experimentation and thoughtful, patient deliberation, Thorp would become a college professor and then go on to invent a profitable system for beating Las Vegas casinos at blackjack, roulette, and baccarat. He would also in time make a fortune inventing highly profitable processes for pricing and trading options. This led to years of outsized success for his hedge funds, most notably Princeton/Newport Partners, before he, like Belichick, faced his own mid-career hiccup. Though for Thorp, that came in the Cleveland Browns personified, then U.S. Attorney Rudy Giuliani.
Whether dealing with casinos or the volatility of Mr. Market, like Belichick, Thorp prioritized the first principal of focusing on understanding his opposition’s strengths as a way to minimize their powers and maximize his advantage. Thorp too comes across as a very thorough thinker, eager than most to turn over more stones in search of understanding. We see this in how he independently discovered that Bernie Madoff was running a Ponzi scheme several decades before the financial crisis and the rest of the world found out. Thorp sat side-by-side with winners of the Nobel Prize, whether in Economics (Myron Scholes) or Physics (Richard Feynman), and was able to solve things they thought they could not or before they did. This came from his willingness, honed first as a child and mastered throughout his life, to test the hypotheses of conventional wisdom even if it meant laborious and repetitive trials.
The insights I gained from these books could be grouped into seven principle themes. Those center around the importance and power of (1) actively embracing a probabilistic view of the world, (2) continuously trying to identify and capture “edge” in competitive environments, (3) building repeatable, adjustable, self-reinforcing systems, (4) privileging the advantages of calm rationality over those of ego, (5) self-studying with the help of technology (i.e., preparation, organization, detail-orientation, and diligence; in the case of Belichick that’s game tape, whereas with Thorp that’s miniature models and computational statistical analysis), (6) playing for long-term survival over near-term success, and (7) making an enemy of complacency.
The stories of both Thorp and Belichick prove that you can, with the slightest edge stretched out over enough hands, downs, plays, seasons, years, or what have you, find the advantage in what seem like brutal games of chance and occasionally turn them into games of skill.