World Cup time. Time for one of my favourite subjects. Media outlets and other very clever computer scientists generating their predictions for a teams chances of achieving World Cup glory.
I was sent this one by someone who knew I would be interested in it. It is from a company called Decision Technology and I believe they are the statisticians behind the Fink Tank column in the Times newspaper. They look at football data and have done since 2002. Before I reveal the numbers I had to delve a little deeper because I wanted to find out more about the people behind it. The Fink Tank was set up by Lord Daniel Finkelstein. He is clearly someone very well respected within the journalism industry. Where it gets interesting is that he is now on the board of directors at Chelsea. To quote; “The Athletic report today of Boehly’s strong use of data to buy smart in the transfer market, and they go as far as to say that Finkelstein would make sure statistical analysis is state-of-the-art at Stamford Bridge”. So it is clear he is held in very high esteem by Boehly, Chelsea and The Times.
Whilst I highly doubt he himself will have conducted the analysis to come up with the predictions, its also safe to assume he will have had a large part to play behind the scenes. At this point Chelsea are either getting a maverick way ahead of the footballing curve or someone whose own statisticians are pretty arrogant to think they are so much better than the betting markets. They are showing zero respect for them. One mantra I always say is to respect the markets. An awful lot of money and intelligence has gone into arriving at the current prices. The World Cup can be bit of an outlier as the amount of data isnt nearly as much as it would be for other football markets.
So let’s get to the data itself. I am not sure how easy the data will be to see. The market price they use is based on an average bookmaker price. They are fully aware of the bookmaker prices but believe they are much better than them.
So they have Brazil to win at 37.3% (17.9% mkt price). France 4.6% (10.1%). Germany 2% (7.3%). Let’s convert those probabilities into decimal prices. Brazil 37.3% (2.68 against mkt price of 5.59). France (21.7 vs 9.9). Germany (50 vs 13.7). On Betfair they are 4.8, 8.2 and 13.
It would be safe to say that since they did this analysis that the price of Brazil and France have come in. Who knows what the reason was. It doesn’t matter. We are left in a position where they think the price of Brazil should be 2.68 compared to the 4.8 on Betfair. That is just a monumental difference for such a big event. If you had such an edge on these markets you wouldn’t be shouting it in public. You would be buying Chelsea instead. It’s why I am so fascinated by it. The guys who are creating these models are ridiculously intelligent. They are up against others though who are also incredibly intelligent.
I just get frustrated by the lack of respect shown towards the betting markets. The big difference is that those placing bets have genuine skin in the game. Putting their money where their mouths are. If Finkelstein/Boehly or others are that confident in their stats teams/models they can have as much on Brazil as they want at 3.5 (implies a 28.6% chance) with me. Of course they aren’t going to take the bet. Everyone is an expert in this game until it comes to actually backing up an opinion with financial consequences. Chelsea fans should be either very excited or very alarmed. Take your pick.
ProPunting 