No slam dunk– Why most professional basketballers would make terrible value investors


Nick Kirrage

Nick Kirrage

Fund Manager, Equity Value

Wilt Chamberlain stands among the all-time greats of US basketball. We will not list every National Basketball Association (NBA) record he still holds from a career that began in 1959 with the Philadelphia Warriors and finished in 1973 with the LA Lakers – mainly because there are 71 – but the following handful should offer you an idea of just how good he was.

Chamberlain is the only NBA player to have averaged more than 50 points a game over a season – a feat he managed in 1961/2 – and indeed the only person to have averaged more than 40 points a game over a season, which he did the following year. Of the 65 occasions an NBA player has scored more than 60 points in a game, Chamberlain is responsible for 32.

The most famous instance – and arguably the most celebrated feat in NBA history – came in March 1962 when he scored 100 points against the New York Knicks. Since the next highest-ever individual scores in the NBA are 81 (Kobe Bryant in 2006), 78 (Chamberlain in 1961) and 73 (David Thompson in 1978 and you-know-who, twice more in 1962), this record seems unlikely ever to be beaten.

Chamberlain did, however, have one weakness – as Malcolm Gladwell’s excellent ‘Revisionist history’ podcast The big man can’t shoot recently reminded us, he was really, really bad at taking free throws. And given that free throws are a huge part of basketball – the equivalent of being awarded multiple penalties all the way through a football match – this was a significant and glaring Achilles Heel.

After two seasons of scoring around 50% of his free-throws, Chamberlain took a drastic course of action and, for the 1961/2 season, he threw his free shots ‘underhand’. This is something almost no NBA player – past or present – ever does but the record books show this to be the only season when Chamberlain took his free throw conversion average above 60%.

The sharper-eyed among our visitors will have spotted 1961/2 was also the season when Chamberlain averaged more than 50 points a game and recorded that historic 100-pointer, during which, incidentally, he shot 28 successful free throws – another individual record that, while matched once in 1989, has never been beaten.

Social stigma

And then, the next season, Chamberlain went back to shooting free throws the more traditional ‘overhand’ way. He simply could not take the social stigma associated with a throwing style known in the game as, among other things, ‘the granny shot’. His success percentage duly dropped – one season falling as low as 38% – but Chamberlain never shot free throws underhand again.

As it happens, at the time Chamberlain was setting records left right and ‘center’ – cunning basketball pun intended – the player with the highest free-throw percentage in the history of the game, Rick Barry, was also the only person who threw underhand the whole time. He was successful with 90% of all the free throws he ever took – a career percentage only bettered by three other players in the decades since.

Today, though, there are only two NBA players who take free throws underhand – Barry’s son Canyon and Chinanu Onuaku, who was having such a terrible time shooting from the foul line he figured he had nothing to lose. Perhaps he had also heard the advice Rick Barry was once given by his own father and then passed on to Canyon: “Son, they can’t make fun of you if you’re making it.”

Underhand throwing is no big secret or ‘unknown unknown’ and there is almost nobody in NBA basketball who would not score more free throws if they chose to shoot that way. But nobody does – because it is something you stop doing the moment you are strong enough to shoot overhand. Because it is embarrassing. Because it is seen as lacking in machismo. Because it is the granny shot.

The link with value investing, which you may well have spotted bounding towards you with all the subtlety of the 7ft 1in, 275-lb Chamberlain in his pomp, is that concerns about what other people might think of them can intrude on people’s thought processes and influence them so that they make poor buying and selling decisions.

Take the technology, media and telecoms bubble that burst in early 2000. Again, there was no big secret – it was obvious to anybody who cared to see that those three sectors were growing hugely expensive towards the end of the 1990s. But most investors felt unable to walk away because of what they thought it would mean for their performance. They could not play the granny shot.

Here on The Value Perspective, however, we shoot free throws underhand every day. And, yes, there are times when it can feel uncomfortable – doing something the crowd finds unusual or even laughs at always does. But we make a virtue of the granny shot, we have a whole team who are happy playing it and we are actually proud of what it helps us achieve. We may even adopt the Barry family motto.


Nick Kirrage

Nick Kirrage

Fund Manager, Equity Value

I joined Schroders in 2001, initially working as part of the Pan European research team providing insight and analysis on a broad range of sectors from Transport and Aerospace to Mining and Chemicals. In 2006, Kevin Murphy and I took over management of a fund that seeks to identify and exploit deeply out of favour investment opportunities. In 2010, Kevin and I also took over management of the team's flagship UK value fund seeking to offer income and capital growth.

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The views and opinions displayed are those of Nick Kirrage, Andrew Lyddon, Kevin Murphy, Andrew Williams, Andrew Evans, Simon Adler, Juan Torres Rodriguez, Liam Nunn, Vera German and Roberta Barr, members of the Schroder Global Value Equity Team (the Value Perspective Team), and other independent commentators where stated.

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