Initial Lessons from Arsenal's Title Triumph | Cleveland Cavaliers | Roster and Lineup Construction Limitations |Utilizing Base Rates
Investment Wisdom from Warren Buffett
The Key to Investing is determining the competitive advantage of any given company and, above all, the durability of that advantage.
The Products and Services that have wide, sustainable moats around them are the ones that deliver rewards to investors.
Initial Lessons from Arsenal’s Title Triumph
After 22 Years, Arsenal have Won the Premier League. That Success is Well-Deserved and provides Lessons for Football Clubs and Sports Franchises everywhere.
Lesson 1
In Replacing Unai Emery, Arsenal Cast a Wide Net in Finding their Next Head Coach. Mikel Arteta wasn't a Head Coach with previous experience. Arteta was Pep Guardiola’s Assistant for 3.5 Years. This isn’t to suggest that Football Clubs should hire Assistant Coaches. This is to say that Football Clubs should Cast a Wider Net in the Coach Recruitment Process on a Continuous Basis.
Lesson 2
Arsenal maintained High-Conviction around Mikel Arteta through the Peaks and Valley of Managing a Football Club. Over the Last 18 Months or So, there’s been a real narrative around Mikel Arteta has to Win Something to justify his continued appointment as Arsenal Manager. The Idea that the Grass is Greener on the Other Side is one of Sports and in Particular Football’s Greatest Misnomer. Arsenal’s Ownership and Executive Management Team deserves Immense Credit for never wavering around Mikel Arteta’s Job.
Lesson 3
Not only did Arsenal never waver around Mikel Arteta’s Job, they empowered him from Day One. If you Recall, the Arsenal Squad Mikel Arteta inherited was Talented but Poorly Constructed. It also had Superstars on a Downhill Trajectory. Arteta had High Conviction around escorting Players like Mesut Ozil and Pierre-Emerick Aubameyang Out the Door. While that Process wasn't Clean, it was certainly necessary.
Lesson 4
Arteta is a High-Conviction Head Coach. Arteta has been unwavering in Integrating Young Players, Developing those Young Players, and Re-Establishing Existing Ones. For Example, Grant Xhaka was thought to be Part of the Problem at Arsenal. Arteta turned him into a Solution. Arteta also had High-Conviction around the Goalkeeper Position. Remember, Arsenal Acquired Aaron Ramsdale from Sheffield United. Yet, both Arteta and Arsenal went back into the market to acquire David Raya from Brentford. David Raya eventually replaced Ramsdale.
Lesson 5
Arsenal is Close to Perfect Alignment. The combination of Josh Kroenke, Richard Garlick, a Director of Football, and Mikel Arteta is a reminder Good Alignment both Structurally and Functionally. The vast majority of Clubs are unable to achieve this or maintain it.
Finally, there are Lots of Other Lessons from Mikel and Arsenal. For Example, Mikel Built an Incredibly Strong Defense. That Included Playing Specialist Center Backs as Full Backs and Never Wavering. Mikel was also Open to Changing. Remember, Mikel Arteta Started by Pressing High and Playing Silky Football. He Won a Title by being Slightly More Pragmatic without going full Mourinho or Sam Allardyce.
Another Thing, Mikel Never Copied Pep.
Cleveland Cavaliers Roster and Lineup Construction Limitations
Unlike the Other Major Sports, the NBA can be simple. The Team with the Best Player and the Higher-Volume of Talent Wins. In the Eastern Conference that Team has been the New York Knicks. The Cleveland Cavaliers had an opportunity in Game 1 to slightly change the calculus and put pressure on the Knicks. Instead they blew a lead in the 4th Quarter, and are unlikely to Win this Series.
Cleveland has Multiple Roster Construction Problems. For this Series, the Cleveland Cavaliers don’t have a Player on their Roster who matches up 1 on 1 against Jalen Brunson. That’s a Pre-Requisite to Beating this New York Knicks Team. One of the Reasons Detroit had Success against the Knicks during the Regular Season was the presence of Ausar Thompson and his ability to Slow Down Brunson. The Cleveland Cavaliers don’t have that Type of Player on their Roster.
When faced with that Question, the Cleveland Cavaliers changed their Starting Lineup by Re-Inserting Dean Wade. Wade was Re-Inserted with the Task of Guarding Jalen Brunson. Therein Lies one of Cleveland’s Biggest Problems. The Cleveland Cavaliers are a Better Offensive Team when they start Max Strus. Strus’ Ability to Stretch the Floor Theoretically Elevates the Combination of Harden, Mitchell, Mobley, and Allen.
When you combine that with the Harden Thing, the Clunkiness of the Two-Bigs, and Donovan Mitchell’s inconsistency in Controlling the Pace with his Decision-Making, you have an Uphill Battle.
One Solution
One Potential Solution for Kenny Atkinson is Replacing Dean Wade with Dennis Schroder. Starting Schroder and Corresponding his Minutes with Jalen Brunson could be an Answer. He’s certainly someone who would take the Challenge and Bring different possibly more outsized dynamic to the Series. He certainly brings Added Toughness.
Base Rates
I was going through some Old Archives when I came across this interview from Michael Mauboussin about Base Rates. That Interview Contains Excerpts Essential for Every Front Office.
Excerpt 1: Yeah, thanks for slowing that down a little bit. So, as I mentioned, rather than thinking about your problem as unique to you, what you want to ask is, what happened when other people were in this situation before? So, you’re gonna now draw from a distribution of experiences versus your own experience. So let me give you an example. I’ll do one from my world that’s actually quite simple to articulate.
Excerpt 2: And alternatively, and I guess what you’d want to also do to come up with a robust forecast, is you might look at the history of all companies of that size. And simply ask what is the distribution of growth rates for companies of that size? And you’ll see, it’s not a perfectly normal distribution, but you’ll see something like a normal distribution. And that will allow you to calibrate where your forecast resides within a historical distribution.
Excerpt 3: Now, the one thing I should say about base rates is the application varies across various domains. So some base rate distributions are fairly well behaved, things like sales growth rates for companies and the heights of people. There is another part where it’s vastly more complicated where you have these distributions that are much more skewed, much more power law-like, or where there are lots of small observations or very few large observations.
Utilizing Base Rates are a Low-Hanging Fruit in Building Sustainable Championship Teams and Organizations.


That base rates discussion is golden