When I think of a Leading Indicator I think of something that changes ahead of a change in results. Like when a player reports to spring training in the best shape of his life. Kidding, at least some of the time.
One of the first of these I looked at was Batting Eye, which measures the ratio of bases on balls to strikeouts. Batting Eye does a good job of identifying good hitters, but a hitter who improves his Batting Eye immediately improves his hitting. It isn’t a good leading indicator, because you don’t know when the improvement will come. What it is a good indicator of is whether a high batting average is a freak event or sustainable.
The same is true of HR per Fly Ball rate. Good HR hitters tend to hit a lot of flies for homers. Some freak home run hitters, however, just hit more fly balls to get their additional homers. In both instances, a change in the number doesn’t foretell a change, it is a change.
One of my favorite leading indicators has nothing to do with baseball. Economists look for signs that the economy is flagging or surging. One of the best leading indicators that foretell a growing economy is an increase in the production of cardboard boxes by box companies. Orders surge before the demand hits, when boxes are needed to satisfy an increase in orders, making cardboard box production a leading indicator.
One old baseball leading indicator was the HR+Doubles total. If a hitter suffered a dropoff in Home Runs, but added Doubles, he could be expected to bounce back in the future. Unless he was old.
Speaking of old, youth is a leading indicator, too. And more important than movies, if you can believe Ellen Degeneres. The average major league player at each age up until age 28 gets better each year. By less than you’d expect, but they do get better as a group.
In recent years, some other leading indicators have emerged. BABIP in particular, but also FIP and the various modified ERA numbers, like xERA and Siera, all claim to do a better job of showing how a player is doing than his ERA and BA. If they do, they should have predictive powers.
In our next episode we’ll delve a little into just how meaningful they are and how much you should rely on them to be a leading indicator going into this season.