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Sam Hinkie Letter


eclecticvalue
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Admiring greats like warren and seth is fine. But execution matters.  Results matter. Even progress matters. No talent and admiring the greats gets you nothing. Your record matters. I see a ton of people quoting greats ( marketing) and producing no results.  Get results.  Stop marketing and produce a product ( track record).

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Hey guys,

 

You might be wondering why I am posting this letter. Well he references many of the Value Investing greats. Especially Charlie and Warren. And he mentions about topics that value investors look into. It is a good read and I can't wait to read it again.

 

http://espn.go.com/pdf/2016/0406/nba_hinkie_redact.pdf

 

You're rereading a letter from a GM that helped produce the worst three year record in nba history ( fact check me on this). Just because he mentioned value investors! Wow maybe a case study of fastenals and balchem's history would be a better allocation of time.

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Yes I know it's about results. I just find it interesting he makes references to value investing and references to people like tetlock. The reason why I will read it again is I don't mind studying from failures. I hope he has success elsewhere.

 

I respect that. Chamath palihapitiya owner of the golden state warriors was a early facebook executive that helped lead a team when he arrived to 30ish million users to 750 million when he left.  He started a partnership and mentions Berkshire as a model. I study winners.  I study the local successful  real estate investor not the high school janitor that quotes elon, seth, warren, and Bezos ( nothing wrong with janitor work just using this example in a business context).

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I think at the end of the day. He should have accelerated the process. Instead of waiting to turn around in 5 years. He should have done it in 3 years. Also he isn't the owner, so he couldn't execute the 5 turnaround that he envisioned.

 

I would like to chat with him and pick his brain.

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He may not have won many games but he invested in his teams future. He left the team loaded with draft picks. He may or may not have been successful in the long run, but I respect what he was trying to accomplish, I see a turnaround in the near future.

 

2016

•1st round pick – 76ers or Kings (Sixers get better of their own pick or Kings pick, assuming Kings pick falls in top-10).

•1st round pick – Lakers (unless it falls in the top 3)

•1st round pick – Heat (unless it falls in the top 10. Can swap with GSW if GSW pick is better)

•1st round pick – Thunder (unless it falls in top 15. Can swap with GSW if GSW pick is better)

2017

•1st round pick – 76ers or Kings (Sixers get better of their own pick or Kings pick).

2018

•1st round pick – 76ers

•1st round pick – Kings (top-10 protected, has to be 2 years after Kings pick to Chicago conveys)

•2nd round pick – 76ers

•2nd round pick – Nets or Cavs (whichever is better)

•2nd round pick – Clippers or Knicks (whichever is better)

2019

•1st round pick – 76ers

•2nd round pick – 76ers

•2nd round pick – Bucks or Kings (whichever is better)

•2nd round pick – Knicks

2020

•1st round pick – 76ers

•2nd round pick – 76ers

•2nd round pick – Nets

•2nd round pick – Knicks

2021

•1st round pick – 76ers

•2nd round pick – 76ers

•2nd round pick – Knicks

 

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He may not have won many games but he invested in his teams future. He left the team loaded with draft picks. He may or may not have been successful in the long run, but I respect what he was trying to accomplish, I see a turnaround in the near future.

 

2016

•1st round pick – 76ers or Kings (Sixers get better of their own pick or Kings pick, assuming Kings pick falls in top-10).

•1st round pick – Lakers (unless it falls in the top 3)

•1st round pick – Heat (unless it falls in the top 10. Can swap with GSW if GSW pick is better)

•1st round pick – Thunder (unless it falls in top 15. Can swap with GSW if GSW pick is better)

2017

•1st round pick – 76ers or Kings (Sixers get better of their own pick or Kings pick).

2018

•1st round pick – 76ers

•1st round pick – Kings (top-10 protected, has to be 2 years after Kings pick to Chicago conveys)

•2nd round pick – 76ers

•2nd round pick – Nets or Cavs (whichever is better)

•2nd round pick – Clippers or Knicks (whichever is better)

2019

•1st round pick – 76ers

•2nd round pick – 76ers

•2nd round pick – Bucks or Kings (whichever is better)

•2nd round pick – Knicks

2020

•1st round pick – 76ers

•2nd round pick – 76ers

•2nd round pick – Nets

•2nd round pick – Knicks

2021

•1st round pick – 76ers

•2nd round pick – 76ers

•2nd round pick – Knicks

 

Thanks for sharing this data.  To use this data in a business context. This company( team) has a lot of assets that aren't earning a return. A activist would salivate to take control of this company and increase the earning power of the business. So this company (team) is a cigar butt. Time is its enemy.

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I actually think this letter is a great example (and there have been others recently) of how hedge fund guys are extremely susceptible to non hedge fund guys who "talk the talk" regardless of whether they walk the walk long term.  More than anything else, I think it explains how Hinkie was able to convince them to do the "process" for years and years.

 

The walking the walk of being an NBA GM is actually drafting/acquiring good players. Hinkie has totally failed at that. Only Embiid, arguably, has potential but seems almost certainly headed down the Greg Oden path.

 

I thought comparing himself to Buffett was particularly rich.  Buffett shut down the partnership after over a decade of amazing returns. So far, Hinkie has lost a ton of games and acquired potentially 2 very high draft picks and that's it.

 

 

 

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  • 2 years later...

He may not have won many games but he invested in his teams future. He left the team loaded with draft picks. He may or may not have been successful in the long run, but I respect what he was trying to accomplish, I see a turnaround in the near future.

 

2016

•1st round pick – 76ers or Kings (Sixers get better of their own pick or Kings pick, assuming Kings pick falls in top-10).

•1st round pick – Lakers (unless it falls in the top 3)

•1st round pick – Heat (unless it falls in the top 10. Can swap with GSW if GSW pick is better)

•1st round pick – Thunder (unless it falls in top 15. Can swap with GSW if GSW pick is better)

2017

•1st round pick – 76ers or Kings (Sixers get better of their own pick or Kings pick).

2018

•1st round pick – 76ers

•1st round pick – Kings (top-10 protected, has to be 2 years after Kings pick to Chicago conveys)

•2nd round pick – 76ers

•2nd round pick – Nets or Cavs (whichever is better)

•2nd round pick – Clippers or Knicks (whichever is better)

2019

•1st round pick – 76ers

•2nd round pick – 76ers

•2nd round pick – Bucks or Kings (whichever is better)

•2nd round pick – Knicks

2020

•1st round pick – 76ers

•2nd round pick – 76ers

•2nd round pick – Nets

•2nd round pick – Knicks

2021

•1st round pick – 76ers

•2nd round pick – 76ers

•2nd round pick – Knicks

 

Thanks for sharing this data.  To use this data in a business context. This company( team) has a lot of assets that aren't earning a return. A activist would salivate to take control of this company and increase the earning power of the business. So this company (team) is a cigar butt. Time is its enemy.

 

Except the assets that aren't earning have a hard catalyst (the draft) when they will convert into valuable players.

 

I think a better analogy is a company that had done a bunch of capital spending on something (new plant, real estate development whatever) that hasn't started earning yet.

 

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  • 1 month later...

He may not have won many games but he invested in his teams future. He left the team loaded with draft picks. He may or may not have been successful in the long run, but I respect what he was trying to accomplish, I see a turnaround in the near future.

 

2016

•1st round pick – 76ers or Kings (Sixers get better of their own pick or Kings pick, assuming Kings pick falls in top-10).

•1st round pick – Lakers (unless it falls in the top 3)

•1st round pick – Heat (unless it falls in the top 10. Can swap with GSW if GSW pick is better)

•1st round pick – Thunder (unless it falls in top 15. Can swap with GSW if GSW pick is better)

2017

•1st round pick – 76ers or Kings (Sixers get better of their own pick or Kings pick).

2018

•1st round pick – 76ers

•1st round pick – Kings (top-10 protected, has to be 2 years after Kings pick to Chicago conveys)

•2nd round pick – 76ers

•2nd round pick – Nets or Cavs (whichever is better)

•2nd round pick – Clippers or Knicks (whichever is better)

2019

•1st round pick – 76ers

•2nd round pick – 76ers

•2nd round pick – Bucks or Kings (whichever is better)

•2nd round pick – Knicks

2020

•1st round pick – 76ers

•2nd round pick – 76ers

•2nd round pick – Nets

•2nd round pick – Knicks

2021

•1st round pick – 76ers

•2nd round pick – 76ers

•2nd round pick – Knicks

 

Thanks for sharing this data.  To use this data in a business context. This company( team) has a lot of assets that aren't earning a return. A activist would salivate to take control of this company and increase the earning power of the business. So this company (team) is a cigar butt. Time is its enemy.

 

Except the assets that aren't earning have a hard catalyst (the draft) when they will convert into valuable players.

 

I think a better analogy is a company that had done a bunch of capital spending on something (new plant, real estate development whatever) that hasn't started earning yet.

 

Yeah, complete opposite of a cigar butt...

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