Fooled by Randomness

Quick Pick:
Kansas City +6 - No comment

Currently, I am reading a very interesting book called Fooled by Randomness written by Nassim Taleb. The book is about "how we perceive and deal with luck in life and business". It contains a story about two people, one who got lucky in the stock market and 'explained' why his move was a 'smart' one after the fact. The other character who recognized randomness in the market, played it safe, and although never made huge amounts of money, never lost it all as the first character did once randomness kicked in. One got lucky period and the other had some knowledge, played it safe, and was well in the long run.

The same can be said with NFL gambling.

Say I create a methodology that is tested for 10 years to be 65% successful (which I have). I can then create a story behind the methodology explaining why it is a good strategy (something like the spread is overreacting to recent games or giving too many points to home favorites) to back up this strategy. Reality is that things change and so does the NFL. One should always play safe and not overreact to success. A method (even one very hard to replicate) that gives 65% for 10 years may yield 40% in the next 2 years, at which point anyone would go broke if they gamble at the same rate. In general, one can find even simpler methodologies that may be profitable like betting home underdogs, or betting against the line movement but you may have to wait 2,5, 10, or even 20 years to hit above 53%.

Part of the reason I liked having a computer make the picks is because there is no BS in why a pick is so good, it's good because the data says so. Explaining why a pick is such a good one is all boloni and if you hear an expert on the radio or the internet explaining why Kansas City is a great pick on week 17 over the 6-point favorite Jets, block your ears and bet with your instinct. The best part I have read from the book so far is when people try to explain why such a decision was a mistake. It is only a mistake if you catch it before making the decision, after the fact is too late. It's like the senators who voted for the war and are now campaigning on how the president made such a mistake in going to war. There is a saying in Puerto Rico: "It is easy to guess a dog is male after you have seen it's testicles", but can you guess with certainty before?

This is not a goodbye speech nor I am giving up. I still believe that a statistician of my caliber can beat the less-educated bookies in Vegas. All I am saying is that I will not be "fooled by randomness" by explaining why my Tampa Bay or Denver pick last week was a mistake. I will also not try to convince anyone that a pick is a gimme or certain, at most it would only be 65% certain. I will also continue my search for better predictors of the spread and superior NFL betting strategies.

I only have 1 pick for this week since most predictions from the model are not applicable due to teams that have already clinched the playoffs. In the past 10 years, this strategy has earned 62% and it only applies to one game in week 17. That is, Kansas City +6.

Until the playoffs,