Broyhill Letter Highlights XIV: A Good Ball to Hit

This is the fourteenth and final piece in our Broyhill Letter Highlight series, highlighting our thoughts on good balls to hit.  You can access other posts in the series here.

For those who would like to revisit our letters in full, we will continue gradually sharing them to our Research Studio.

XIV: A Good Ball to Hit

Ted Williams was lucky to get an important piece of advice from Rogers Hornsby early in his career. Hornsby’s advice was simple: “The single most important thing for a hitter is to get a good ball to hit.” One would think this would be incredibly obvious. It’s completely intuitive. Yet it’s incredibly difficult in practice.

As Williams said, “Everybody knows how to hit. But very few really do.” To understand why, we need to consider human psychology. Until you’re standing at the plate in the big game, it’s impossible to know how frustrating it is to watch good pitches blow by you.

It’s extremely hard to hold back on pitches you know you can hit. Sometimes a high ball over the strike zone can be hit hard if it’s in tight. In a year like last, most of these balls were hit out of the park. It’s no fun taking strikes or even a base on balls when everyone around you is swinging for the fences.

A lot of mediocre balls are hit into the stands. But more often than not, when you swing at a mediocre pitch, you get a mediocre result.

Occasionally, you can turn a decent pitch into a blooper for a base hit, but most of the time, nothing happens. Worse, you can get into real trouble when you start fishing for pitches outside your sweet spot. You might start with something that’s an inch off the plate. On a good day, you might be able to drive that ball into the gap. But, then, at your next at bat, you take a stab at something two inches off. Then three. And, before you know it, you’re striking out on pitches you had no business swinging at in the first place!

Standing there, with a bat on your shoulder, day after day, is not fun. It’s downright torture when you’re playing in a little league park and hitting on the equivalent of a tee-ball stand.

A bull market hides many mistakes. Those who take the biggest swings drive in the most runs. But those big swingers also tend to strike out a lot. Those who wait for a good ball to hit risk severe boredom standing at the plate. But we’d rather be bored than strike out on pitches we had no business swinging at. Particularly when this game is already well into extra innings.

A good hitter can hit a pitch that is over the plate three times better than a great hitter with a questionable ball in a tough spot. But the greatest hitter living can’t hit bad balls well. With so much capital invested without any consideration for fundamentals (index investors) or completely on short-term autopilot (program traders), this is a wonderful time to be a long-term value investor.

We are not sitting on the bench, picking our noses and scratching our bottoms. We are observing the game carefully. Looking for patterns. Watching for every opening. As Ted Williams said, “The observant guy will get the edge.” We are revisiting and testing our assumptions on a regular basis so that we can be quick with the bat when we see a good ball to hit. We’ve learned, over time, where are happy zones are.