Thursday, April 30, 2009

What is the purpose of my blog?

I just read a great passage in War and Peace. It was about Pierre Bolkonsky, a Prince in Russia. Here is the quote in full:

"How horrified he wuold have been if, seven years ago, when he had just come from abroad, someone had told him that there was no need to seek or invent anything, that his rut had long been carved out for him and determined from all eternity, and that, however he twisted and turned, he would be that which everybody was in his position".

Pierre is sad with his life. He is no longer trying to achieve anything, invent anything, or do anything. He just drinks, talks, discusses, etc. But he doesn't do anything.

That part really resonated with me. I don't feel like a failure or a wash-out. But maybe thats why I blog and write articles for Bleacher Report. I have a need to feel like I'm contributing or working towards something. I don't like to feel like I'm doing nothing.

Do all young men feel a need to contribute? Its an interesting topic. I want to discover or create something.

Wednesday, April 29, 2009

General Research Goals

My preliminary investigation for the Martingale Expectation system didn't reveal much good data.  Although it is still a small sample size (only the Eastern Conference in the 2008-2009 season) I already have seen streaks of length 9, 10, 11.  

Here is a graph of 1 game streaks.  The data is arranged with the team with the highest record on the left (the Cavaliers) and the worst record on the right (the Wizards).  This is the only interesting graph I've produced so far.  

Writing and Research Notes

I've crossed the 4,000 article reads on Bleacher Report and set a personal record with over 1,000 reads on a single article in Bleacher Report.  I've written nine articles overall.  

Also I'm almost at 100 comments received.  My most popular article was about how the Cavaliers wouldn't win the title and what a debacle it was!  So many people wrote negative things about it.  But it was good to read them and learn about how to write a more informative article.  I was a bit rushed because I wanted to go to sleep when I wrote it.  

I also think that no amount of data or theories can really change the minds of most people, especially ardent fans.  I'm not a big Cavs basher or anything or an ardent Lakers supporter, although I do follow both teams.  I just don't think that Cavs are that good this year, but I also haven't watched many of their games.  So who knows?

Also my data research is going well.  I've been analyzing point spreads and looking for trends.  And I've found a few but nothing spectacular.  

Monday, April 27, 2009

Note on Injuries

In the NBA, knee ligament injuries are much harder to come back from than broken bones.  Bones can fracture and heal very quickly and the player returns without concern.

Knee and ligament injuries take a long time to heal, and the player is more tentative to say the least.  I don't have statistical data on it but that is definitely what I've seen from a small sample size.  Players can break their hand and return fine, or break a leg and be back in action.  The more worrisome injury is the ligament injury.  

Cognitive Bias potentially discovered

I was thinking about the concept of upsets.  Of teams being either better or worse than their record.  Essentially, teams taking days off and giving up a game.  

As far as I know only really good or really bad teams take games off.  Everyone else is scrabbling for everything they can.

But I've never studied the playoffs and seeding to see how many lower-seed upsetting higher-seed situations there are.  The NBA is uniquely suited among the major sports to see how match-ups effect playoff results because of the linearity of scoring, and the seven game series format.  This allows for a LOT of basketball to be played between two teams in an effort to sort out who is the best.  

One of the problems with analyzing it is the seeding.  The NBA uses a 1 vs 8, 2 vs 7, 3vs 6, and 4 vs 5 seeding.  An alternative seeding could be 1 vs 2, 3 vs 4, 5 vs 6, and 7 vs 8 format.  This would let the 1 and 2 seeds duke it out right away, without risk of players getting injured while getting the scrubs out of the way.  The winner would likely face a moderate test in the 3 vs 4 winner, and then celebrate the title early as they beat the winner of the 5 vs 6 vs 7 vs 8 scrum.  

The last series would be akin to a victory lap.  

If we used that seeding, we'd have lots of instances of teams with very close records playing seven games series and we'd see what sort of strength there is to a W-L record, i.e. how accurately it predicts the outcome.  

Just a random thought I had about seeding.  

Also, when I research seeding upsets, check to see the expected wins and losses because of the disparity in homecourt advantage for the higher seeded team.  What I mean is that if two identical teams played, and one had home court advantage in a seven game series in the current format, what percentage of the time would they win.  And what percentage of the time does that actually happen.  

Darling Du Jour

The "darling du jour" is a play on the term soup du jour, meaning the soup of the day.

The darling du jour is whichever player on whichever team is being hyped and promoted at the moment.  

Because some player, on some team, is going to be hyped at some time today.  Somewhere an interview is taking place, an editor is reviewing some article, and someone will be hyped.  

There is no minimum criteria for being hyped.  Someone could hype the best player in a pick-up game.  They could write a glowing article about him.  

So the next time I read a glowing article about some player, stick to the numbers and the truth, don't just accept that he is the greatest around and a dominant force.  

LeBron and the Cavs: How Good Are They?

I was reading an article about the Cavs today.  It was obviously designed to hype the Cavaliers and LeBron.  He is the media's darling du jour.  Speaking of which, that is a great term.  

Anyways, the article spoke about their focus and commitment to defense.  

Focus and commitment are great things.  They help one maximize one's potential.  Always a good thing.  

I also think long-term focus and commitment can improve a teams cohesiveness.  They can learn and practice more defensive schemes and perhaps  impove their offensive schemes. 

Basketball is also a game of one-on-one situations.  One-on-one defense and one-on-one offense.  In a seven game series what happens?  Well I think in a seven game series (if it is evenly matched) it comes down to role players contributing more.  

In the playoffs teams can scheme and practice consistently to stop one player or one method of attack.  In an 82 game season teams can get blindsided or be unfocused.  

So I think in an evenly matched seven games series bench and role players come up bigger.  For example, in the Houston/Portland series, Yao Ming beat the Blazers so badly (9-9 from the field) that they had to resort to double teaming him the rest of the series.  

The result now is that Luis Scola is shooting a lot of outside shots (and making them) because his defender is rotating off of him.  

But that fact is that Luis Scola is not even close to the best player in the series.  Its funny how a series can hinge (they've had three very close games) on the skills of someone who didn't even make the Spurs (he was cut by San Antonio).

And when I think of some of the San Antonio Spurs vs Phoenix Suns series' that I've seen, I keep thinking about Bruce Bowen.  He wasn't nearly the best player on his own team (maybe fourth best?) but it was his ability to add that extra bit of performance that brought them over the top.  He was always there when Duncan was covered, Tony Parker couldn't get in the lane, and Manu was immediately covered.  Waiting in the corner, patiently preparing to take his one shot.

Reflecting on this, it shows that the Suns could cover up to three really good players.  Three great players, all potential hall of fame players, and that was good enough.  If Bruce Bowen were worse than he was they wouldn't have won.  

So my point is who wins the one-on-one matchups at all five positions?

That was quite a tangent.  My reaction to reading the article on ESPN, found here, was that focus and commitment don't make you better.  They make you play harder, which gets you more wins, but it doesn't make you better.  

Does that make sense?

If I play harder, and really sprint around and play till I'm out of breath, I'll win more pickup basketball games.  But it doesn't mean I'm better.  I can't shoot more accurately, I can't jump higher, I don't have more basketball IQ.  

So the article brags about how good the Cavs are.  They have a superb record against bad teams.  They had an incredible record at home.  The quote they use is "they beat the teams they were supposed to beat".  

This is the same group of guys who won only forty five games last year.  FORTY FIVE games!  

And this year, against the Lakers, Celtics, and Magic (the other good teams in the league) they were three and six.  Three and six?  They aren't the best team in the league.  And one of those wins was against a Celtics team in disarray and without Garnett.  

Garnett won't be back this season.  But Orlando should really worry Cleveland.  And so should one other team.

Consider this thought experiment:  which of the following teams is better?  And by that I mean, when the chips are down and they had to play, who would win?  Who would win a playoff matchup?  

Team A has .750 winning percentage for the season.  They occasionally take nights off, losing to bad teams.  They have a winning record against the other division leaders in the league, and have won on the road at Team B's arena.

Team B has a .795 winning percentage.  They have the higher +/- differential.  They play tough, tenacious D, never take a game or opponent for granted.  They lost close games both at home and on the road to other division leaders.  There home record is great but their road record is mediocre for such a good team.  

I think it is Team A.  Team A looks like a good team that is slacking off.  Team B looks like a good team that is dialed in.  

Team B may be more fatigued for the playoffs.  Also, Team A will not be slacking off during a playoff meeting.  They'll be coming full-force.  However their defense sets may not be as good as needed.  

Sunday, April 26, 2009

The purpose of the Ads

The purpose of the ads really isn't to make money.  It takes thousands of views and people clicking on the ads to get me even a dollar.  And I simply don't have thousands of readers.

The real reason is it gives me a small amount of data about whether or not anyone is viewing my website.

And on Thursday and Friday of last week, I wasn't near the internet and couldn't go to my blog; however, nine other people (at most) viewed it.  So there is hope!

And its been viewed a total of fifty times in the last week (at least half by myself).

And my BR articles have a total of 3,200 reads.

So my  message is reaching a few people at least.


Predicting sports outcomes and the weather have many similarities.  Both have lots and lots of previous data; both are frequently wrong; are they both craft?

Predicting sports outcomes, or more plainly, investing in sports, is a craft.  

Wikipedia describes craft as meaning "craft is a skill, especially involving practical arts. It may refer to a trade or particular art".  Craft shall be the focus of my further studies.  Essentially, what I am doing is trying to create a craft.

Knowledge of the history of the craft is important.  To know whats going to happen, it really helps to know what has happened before.  Because of the amnesia of crowds, one can outwit a crowd by knowing history well and being able to converse about the many aspects of history.

The Black Swan taught me that not only is it important to know history; it is important to know past events as they occured to people during that time.  What people of any given time expected to happen, what actually happened, and how they reacted to what happened.  

This distinction is what makes sports investing a craft.

I also read in the papers about the stock market crash a report on the stock of the company which makes "Crocs".  Its stocks were selling at as high as seventy two dollars a share.  Apparently they continued to expand their production facilities by taking on loans.  

Predictably, crocs aren't that cool and the market is super-saturated.  Nobody wants to buy more pairs and their stock has plummeted to two dollars a share.  

That bubble has burst.

So maybe this new niche I am investigating of "bubbles" emerging in sports betting behavior is related closely to the concept of "bubbles" and mania in general.  

Essentially, find something trendy and bet on its bubble to burst.  Not all stocks go up; but every stock will go down.  The reason the dow jones goes up is because it constantly drops stocks that suck and includes stocks that are "on the rise".  So the DJIA increases while individual stocks drop.  

It seems the best strategy is to sell high first; then buy low.  

I don't know when Crocs will go out of fashion.  But I only had to take one look at them to know they were gay and I would never wear one.  I also knew they were a fad.  They aren't the a new mainstay of footwear where EVERYONE has at least one pair and goes through them quickly, requiring the purchase of more pairs.  

I was taking the red-eye flight from West Coast to East Coast and it really hit me hard.  Investing in a company that I knew nothing about and hoping it would go up was foolish.  But selling the stocks of companies that I know will crash is not.  Bubbles constantly emerge as fads spread and experience enormous growth before burning out shortly thereafter. 

 The list goes on and on:  hush puppies, beanie babies, magic cards, baseball cards, crocs, just to name a few.  And it stretches back throughout history.  I know because I've read books about it.  The Dutch tulip mania, the South Sea company, etc., etc., etc.  This is a repeatable event.  

I get so pumped up thinking about this new investment strategy.  I want to FIND bubbles and take advantage of them.    Bet against them and just hold until it drops.  Every bubble, by definition, must burst.  A bubble is an overinflation and over-evaluation.  It will be corrected sooner or later, and when it happens it happens fast.  

This seems to me like a great idea.  It takes balls to do it.  To sell all my stocks and start investing the money on my own, selling the stocks of companies that are rocketing to the sky, betting on fads to flop, of companies and fortunes to crash and burn.  

If you want what everyone else has, just do what everyone else is doing.  

Is that all I want?  

Saturday, April 25, 2009

Marcus Aurelius

The purpose of this blog is similar to the purpose of Meditations was for Marcus Aurelius.  

Marcus Aurelius was a Roman emperor from 161 to 180 of this era.  He wrote Meditations while on campaign as a source for his own guidance and self-improvement.  The purpose of this blog is my own guidance and improvement in the areas of sports analysis, prediction, investing, etc.   

As sports investing is a craft, anything can come into play.  I value the scientific method and want to create rules and observations based on real data.  I want my conclusions and predictions to be based on reality and be verifiable when possible.  I always want existing data to support my methods and conclusions.  

I read parts of Meditations in high school and have read further portions of it in college.  He preached stoicism, rationality and clear-mindedness.  

Wins Produced in the NBA

I was reading the recent posts at Wages of Win.  That is a very informative website and I recommend it for anyone who wants to learn more about basketball and basketball analysis. 

These last two days I was in Half Moon Bay at a bed and breakfast.  In the mornings I would read the sports section of the newspaper and was surprised at how limited the coverage was and how uninformed it was.  

The newspaper summarizes the game.  And thats it.

Wages of Wins on the other hand, discusses what happened and how it happened.  That is very important and the statistics that they produce help one understand what is happening in the league throughout the season.  

The statistic wins produced measures how helpful someone is at making his team win.  It doesn't measure how easily he can rain in thirty foot shots, if he can tomahawk jam while driving the lane, or if he can get ten steals a game.  

It measures the "whole player" and if what he is doing on the court helps his team win.  

Wins produced measures the importance of playing good defense, getting offensive rebounds, shooting efficiency, drawing fouls, not fouling, etc.  

Its really a wonderful statistic.  While there is debate over which players are most skilled, fastest, best on-ball defenders, or have the highest combination of all skills possible in the NBA, there is little doubt about who is producing the most wins.  

A good analogy is me playing basketball.  I'm tall (6'4") and can't dribble well or shoot well.  But because of wages of wins, I focus on rebounding, shooting easy shots, and not making mistakes.  

After all, not making a mistake is as valuable as making a good play.  It allows someone else to try to make a play.  

It also clarifies who the Least Productive Players are.  Read this article here.   It is very informative.  You will find a certain type of player here.  The high volume shooter who doesn't play defense very well.  Its really an interesting list of players.  And some of them make MILLIONS of dollars.  

Tuesday, April 21, 2009

Further Advice from Warren Buffet

I've spent the last thirty minutes reading articles about Warren Buffet, his investment philosophy, and some quotes from him.

This includes reading his Wikipedia page, and various articles about the man.  

To summarize he believes the main skills in picking a stock correctly are correctly valuing the company (either above or below current appraisals) and being detached from the opinions of others, which will influence your thinking.  

The following six paragraphs are all from the article cited above:

"[It] comes about from having an investment philosophy grounded in the idea that a stock is a piece of a business. If you look at it that way, there's no reason to get excited whether some analyst is recommending it or the company is splitting the shares two-for-one, or whatever. The only way to drive the extraneous thoughts out of your mind is to have a philosophy. And for us that philosophy comes from Benjamin Graham and The Intelligent Investor, especially chapters 8 and 20. It's not very complicated stuff."

"It doesn't make any difference what other people think of a stock. What matters is whether you know enough to evaluate the business," he opined.

You should be able to write down on a yellow sheet of paper, 'I'm buying General Motors at $22, and GM has [566] million shares for a total market value of $13 billion, and GM is worth a lot more than $13 billion because _______________." And if you can't finish that sentence, then you don't buy the stock.

The key is not to be seduced by crazy ideas, but instead just stick to the fundamentals year after year. Academia doesn't get too interested in us -- we're too simple. What would the professors do? A great many of the formulas [they use to analyze securities and markets] are dead wrong. They exist purely to give the intellectual class something to do. We don't do anything just exercise our intellectual proclivity for mathematical formulas.

Instead, if you are a true investor, you should shop for stocks the same way you shop for anything else: Look for sale prices, and never regard falling prices as inherently bad news. Instead, falling prices create the opportunity to buy even more of something that was already worth owning.

In that single sentence Buffett captured the difference between investing and speculating: An investor, like Buffett, wants the price of a stock to fall below the value of its underlying business so he can buy even more and hold for as long as possible.

So to summarize, one wants teams to perform poorly, to have their "stock drop" below their true levels. 

Smart man, a lot to learn from him.

Sunday, April 19, 2009

What Can I Learn From Warren Buffet?

What can I learn from Warren Buffet?  Warren Buffet has been the world's most successful investor of the last half century.  But rather than simply list his biography, which can be found here, I want to focus on which of his teachings can be transferred to sports analysis.  

1)  Are the fundamentals of the company strong?
Warren Buffet emphasizes buying the stocks of companies that have had a run of bad luck but for whom the fundamentals are still strong.  They have assets, a market, and advantages, etc.  He tries to buy companies that have value but are struggling to work in the market.  

The transfer to sports analysis is to find teams that have good players, a good coach, a good system, but for whatever reason they have been playing poorly.  Maybe they have not had the energy.  Or they have had some bad bounces.  They've been the victim of the other teams extraordinary plays or catches.  

2)  Understand what you are investing in.
Warren Buffet only invests in companies, markets, and geographical regions that he understands.  He doesn't invest in things that confuse him.

The transfer here is that one should never invest in teams that one has not followed.  Foreign teams with their own struggles, competing interests, goals and expectations are difficult to gauge, track, and predict.  

3) Make accurate comparisons.

The transfer here is to compare the units of teams accurately.  In basketball, compare each team's players at each position and determine who has the "3 out of 5" advantage.  Then also check the coach's time management skills, and various bench players, whose sum is maybe only equal to one or two starting player's value.  

4)  Be a historian of the market.
Warren Buffet knows more about the future of the market because he knows so much about the past of the market.  He is a prolific reader.  He listens first, talks second.

The transfer here is to not only watch sports unfold, but go back and re-read sports analysis, observe team's seasons in the totality, with the knowledge of what happened but re-living the feelings of the moment.

Saturday, April 18, 2009

Clippers Season Recap

I posted an article on Bleacher Report about the Clippers' remaining games and which games I thought they would be blown-out in.  A blow-out to me is losing by 15 or more points and definitely not covering even the largest NBA point spreads.

The article can be found here.

I made six picks about the Clippers.  

Clippers hosting Cleveland.  Lost 83-87.  DID cover spread.

Clippers playing at Detroit.  Lost 108-90.  DID NOT cover spread.

Clippers playing at Boston.  Lost 90-77.  DID NOT cover spread (was 8.5).

Clippers playing at Denver.  Lost 120-104.  Did not cover spread (was 14).

Clippers playing at Utah.  Lost 106-85.  Did not cover spread.

Clippers hosting Oklahoma City.  Lost 126-85.  Did not cover spread.

So for five of the six games they failed to surpass expectations and lost badly.  

They lost all four road games badly.

The first home game was very close, the last home game was against the fourth-worst team in the league.  

Anyways, I was 5-1 for that article.  The predictability of losers?  

I think that when teams that have quit play good, focused teams they really struggle and will give up, especially against the better defensive teams.  

Sunday, April 12, 2009

Reading a Book about Day Trading

I've been reading a book about day trading and its really gotten me thinking about sports betting as a market, the spread as a "price", etc.  

I also had a very intriguing conversation with my Dad and we happened upon a great idea.  

Essentially my theory (which is not backed up with data yet) is that a team won't cover the point spread for ever.  A team might under-perform a long time if everyone is quitting or they are disorganized (applies more to football).  Now a team in college basketball might win 30 in a row (Memphis 2007-2008) but I can be damn sure they didn't cover the spread thirty games in a row.  
Because the spread relates to expectations instead of skill, the spread will grow and grow (what kind of growth?  interesting question) until it surpasses even the best performance of a good team having its luckiest night.  The Patriots went 16-0 bit didn't go 16-0 against the spread.  

So essentially, a Martingale style system betting against a team to cover the spread could very well make consistent money long term because of the impossibility of a long, long losing streak.  A team might go 30-0 but they won't cover the spread nearly that many times.  And the advantage of the Martingale system is that it doesn't require you to win more than you lose, it merely requires that you win before you run out of money.

Now even ten iterations of the Martingale system (starting on a ten dollar bet ) exceeds $1,000.  That is a pretty steep climb.  But I would love to see what the chances are of a team pulling off a ten game spread-beating run. 

I tried the Martingale system in roulette when I was younger.  Obviously, my results were mixed.  

But the Martingale system applied in a human-expectation system will have a natural counter built in because its humans who make the spread and they will over-expect.  Turning the behavior of bettors against themselves.  

Likewise, with enough statistical data, one could wait for a three or four game covering streak to start betting against that team to cover as a means of decreasing instances bet and decreasing the preceding "tail" of a run.  

Friday, April 10, 2009

APBR metrics board

I think these guys do valuable stats work but jeez....they are way to obsessed with numbers.  Basketball isn't a science with verifiable mathematics and elegant formulas.  Its a craft.  There is a huge difference, with Nassim Taleb discusses in his book Black Swan.  But they want  more and more numbers and quantifiable ways to discuss who is a "great passer" and who is an "elite passer" . 

It makes no sense to me.  They are obsessed with numbers and don't understand that its a craft to play and a craft to analyze.  Anecdotes and stories count just as much as numbers do.  

Thursday, April 9, 2009

Are there certain situations where a team always wins?

I was wondering if there were situations where a team always wins.  Essentially, I mean where a strong team is at home against a very weak team.  A team with a winning percentage of over .800?  Playing a cellar-dwelling team?  Celtics vs. Clippers at home? 

Certainly road games are any less than predictable wins for the visiting team.  Most major upsets occur on the road (in the NBA).  In football I'd assume that is likely as well, but there is a lot of difficulty in determining a team's true skill.  

but perhaps there are instances where a good team hosting a really bad team on the end of a road trip has virtually no chance to win.  This would require some research but is very interesting.  

Conversely, perhaps really bad teams have a better chance of upsetting or covering the spread against a *really* good team than just a good or above average team.  

Why I Can't take picks from someone else- or give my picks away?

I was reading a stock market analysis paper today.  It was about Elliot Wave theory (my current subject of interest) and the writer seemed so asinine.  He was just parroting what he heard in a re-packaged form. 

It got me thinking about the value of original research and the herd mentality, which is a very powerful human instinct.  And I realized that if I searched long enough, I could fine people betting on both sides of any issue.  People predicting opposite outcomes.  And I realized that taking any advice from anyone meant that I was pre-filtering the advice.  

There is simply so much advice out there.  It is impossible to avoid.  And the over-abundance of advice and re-packaged advice and rumors and parrotings means that it is impossible to determine who the researchers are.  Who the people actually making the picks are.  

And even the people making the predictions aren't insulated from other people making picks.  They have reputations, friends, track records, histories, and critics.  It is one gigantic, incestuous loop.  

So much so, with so many reactions and counteractions, that no data I receive is untainted, is unbiased.  When people get more information, it rarely changes their view.  It simply makes them more certain.  They give less weight to contradicting data and more weight to affirmative data.  

We are all bodily creatures, unable to escape our brain, our chemical dependent hardware, swimming in a sea of chemicals and lights and sounds.  There are too many variables to filter out.  
The solution is to simply not take advice from anyone.  All I can do is take as pure of data as I can and never read a sports column or analysis column again.  Unfortunately that will likely never happen.  

So much of the valuable data out there comes in the form of John Hollinger's numbers, and insights that I pick up from reading articles.  Its all so confusing.  

Elliot Wave Theory Part Deuce

The attractiveness of Elliott Wave Analysis is : Three impulse wave forms and six corrective wave forms are conclusive. All we have to do is to identify which wave form is going to unfold in order to predict future market actions. This is a bold statement, needless to say, knowledge of market historical wave patterns and experiences in wave count are of paramount importance. 

I've had musings about the important of lag between bettors knowledge ofa  team and its actual skill.  Wave theory could replace all that.  Instead of analyzing the teams, I simply am analyzing the bettors.  Instead of watching the games, I'm watching the people watching the games.  This means that there is no team.  There is no game.  There is only a market of people watching the game.  This stuff could be truly ground breaking in nature.  

I really think this stuff is dead on and I need to analyze it stat.  This taps into the greatest weakness of the sports betting market that I've bemoaned repeatedly.  Namely, there is no historical data available.  As soon as the game happens the spread disappears and never comes back.  One has to record the spread or lose it forever.  Maybe if I wrote a casino I could get the answers from them.  Who knows?

Wednesday, April 8, 2009

Fibonacci sequence and Elliot Wave Theory

I just read an interesting article about the Fibonacci sequence and Elliot Wave Theory.  These are some very interesting subjects.  They may pertain to sports betting.

Here is a quote from Wikipedia:  "Elliott argued that because humans are themselves rhythmical, their activities and decisions could be predicted in rhythms, too. Critics argue that the Elliott wave principle is pseudoscientific and contradicts the efficient market hypothesis."

Now I couldn't agree more with Elliot's premise that human beings are rhythmical.  In fact that is basis of a lot of my observations and research so far.  That indicates to me that there may be some useful information in Elliots Wave Principle techniques.  Also, the criticism that it contradicts the efficient market hypothesis is easily discarded when applied to NBA betting.  I don't think anyone else is researching this so no one else takes it into account.  the efficient market hypothesis implies that everyone knows the information available and can take advantage of it.  

I've been reading about fractals in the Black Swan and have a limited knowledge of them.  Essentially, Elliots Wave theory finds graphs of stock market prices to be fractal in nature and similar patterns can be observed on any timescale.  

Applying what I learned in the Black Swan, scoring in the NBA is from mediocristan.  A player may score 1000 points in a season.  That would correspond to roughly 12 points a game for an 82 game season.  However, he will not play in all 82 games, score 1000 points in one night, and score 0 the rest of the season.  

Same applies to all statistics.  Cumulative totals increase fairly linearly.  

Another quote from Wikipedia:
"Elliott Wave analysts (or "Elliotticians") hold that it is not necessary to look at a price chart to judge where a market is in its wave pattern. Each wave has its own "signature" which often reflects the psychology of the moment. Understanding how and why the waves develop is key to the application of the Wave Principle; that understanding includes recognizing the characteristics described below.[2]"

Interesting.  This material is really right up my alley.  It talks about how psychology affects behavior and motivation is a subset of psychology.  

Where do I go from here?

I need to get serious and rigorous in my hypothesizing and testing.  I have no database.  I have no knowledge of data-searching programs.  I have limited skills.  I have limited knowledge of NBA history and all the data I get is from secondary sources.  I can review blogs, websites, and watch videos all I want.  I have no primary source information.  There are many reasons why I will fail.  

I've studied football (both Pro and College) for several seasons and watched closely this year's NBA season.  I've been following point spreads closely for some time now.  So where do I go from here?  I have ideas that seem to be right.  I'm able (I think) to identify factors after the fact.  I need to make a database.  And I have no idea how to do that.  

Come to think of it, do I even need a statistical database?  The book Black Swan says that with more information I will be more confident in my picks but no less accurate.  Maybe I just need to keep observing and let my brain and its neural network do the work?

Tuesday, April 7, 2009

Lakers at SacTown

As I write this I this the Lakers are winning 86-72 at Sacramento.  They are only two point favorites on the road.  That seems a little silly to me.  Perhaps oddsmakers are thinking their motivation has wavered and they have lost focus.  

However, two nights ago the Lakers nearly lost to the Clippers after blowing a big lead.  The only thing better for tonight would have been if they'd lost to the Clippers.  Then they would have been very focused and vengeful.  

As it is they will still likely blowout the Kings.  The question is why was the spread so low?  

I think it was because of their near defeat to the Clippers.  But remember the lag factor.  By the time everyone has profiled the Lakers as losing focus, they have switched gears and become focused and wary.  By the time everyone thinks they are focused and playing hard, they will be slipping back into mediocre habits.  And so the pendulum swings, back and forth, back and forth.

The important lesson is that one needs to anticipate.  A close loss to a bad team will spur greater effort the next time a bad team is played.  A dominant win over a bad team will encourage less effort and focus the next time it is played.  There is the back and forth between expectations and effort.  Strong effort yields results and overkill which encourages less effort.  Rarely do players play hard for no reason.  A series of dominant wins will usually provoke less effort from the top team, steadily dropping until a bad loss wakes them up and spurs greater effort.  

Too predictable?

I just read an article on Truehoop, found here, stating the Spurs were all business and getting ready for Oklahoma City.  If you hadn't heard, Manu Ginobili is out for the rest of the season with an ankle stress fracture.  

When a player goes down with injury on a sports team, it focuses everyone else.  They are all aware of how they have to step up and perform.  Media and friends say they have lost the season and can't compete anymore.  But when Manu goes down, there are still talented professional NBA-level players ready to take his place.  Its not that bad!

So it was a surprise to notice that the Spurs were only two point favorites against Oklahoma City tonight.  Oklahoma, the third worst team in the Western Conference!  I mean lets get serious here.  The Spurs lose Ginobili and they are only two point favorites?

Add this to the fact that the Spurs already lost once in OKC this year.  The result is the Spurs won by ten.  There is a pattern here with one supporting factor.   Team loses a key player to a surprise injury and focus and step up their game.  Supporting fact is the Spurs already lost once to Oklahoma and went through that embarassment once.  Fool me once, shame on you.  Fool me twice, ..... don't get fooled again. 

Especially consider that the Spurs were blown out at Cleveland and Tim Duncan had a horrible game.  I don't know how often he has back to back bad games, but he is a proven winner so it is doubtful.  Champions can bounce back from a bad performance.  

Another interesting thing to notice and observe in the coming days is the duration of their overachieving versus the spread.  There is a human limit to over-exertion and human tendencies to relax (as already discussed).  How long will the Spurs over-achieve?  Two games?  Three I'd assume at most before they return to their ways.  

Monday, April 6, 2009

CIA Analyses

I've spent more time reading the CIA book on the Psychology of Intelligence Analysis.  Its basically a how-to on how to dissect complex analytical problems where you have incomplete information and have to make inferences.  

Some of the key concepts translate to sports analysis as well.  There are several different areas of sports betting.  Lets take the NBA as the cornerstone for betting opportunties.  

You can bet on regular season games, who will win the Championship from the start of the season, and bet on playoff series, up to the championship.  

Edit: I never finished this post and will publish as is.  The CIA Intelligence Analysis book is old hat.  

Sunday, April 5, 2009

Thoughts on Spurs-Cavs game

The Cavs dominated the whole game today.  From start to finish it was never close and never really out of control.  I read in the game notes that LeBron arrived to the stadium three hours ahead of tip-off to prepare, which is what he does to prepare for big games.  He scored 28 in the first half and 38 overall.  Interestingly this is coming after a close loss to the Wizards (a rivalry game) and a blow-out loss at the Orlando Magic (playoff competitor).  

So the team came out focused, fired-up, etc.  The spread was six points and they won by twenty.  Easily won by twenty.  They are also the best home team in the league at this point.  Games like this are definitely predictable.  

It would be great to get information about if/when LeBron shows up three hours early to games.  What their winning percentage is?

Thoughts on the Final Four

I was watching UNC beat down on Villanova last night and appreciated how strong UNC's defense is.  They had so much size on their perimeter players that they completely clogged the lane and they completely flustered them into forcing up perimenter shots.  And of course, rushed perimeter shots rarely go in.  

It also got me thinking about some of the stats I see used for the pros being translated down to college basketball.  Does anyone measure defensive efficiency and offensive efficiency?  It seems like college basketball, with its diversity of players, fast turnover of players, etc., really can make it difficult to stay on top of like the pros.  

Also, college players only play forty minutes a game and roughly 35 games a season, so thats much fewer minutes that they play and it can muck up the statistical analysis because of a much smaller sample size.  

I should re-read the book on handicapping college basketball.  College basketball could definitely be an area of lucrative investment opportunities.  It would require sharper observation skills, but there is also more opportunity for players to quit if they have less to play for.  

Defensive rotations might be practiced less later in the season, etc., etc., etc. 

Also I heard the announcers discussing how UNC remembered their humiliating Final Four defeat last year and wanted to make sure they started strong in the Final Four.  I think that may have played a role in their focus and seriousness because they were definitely focused.   

Quick Update

Last night Denver hosted the Clippers.  In my Bleacher Report article on the Clippers, I predicted the Clippers would get blown out by the Nuggets.  They did, losing by sixteen points.  Also, the spread was fifteen points, so Denver covered despite a huge spread.  This prediction was made on the basis of the Clippers being a recent opponent of the Nuggets; the Clippers having no motivation for the game; and the Nuggets trying to maintain a high seed.  

Prediction Total:  10-6

Trying to be like the CIA

  More good information from the CIA book:

There are several modes of analysis by which one might infer cause and effect. In more formal analysis, inferences are made through procedures that collectively comprise the scientific method. The scientist advances a hypothesis, then tests this hypothesis by the collection and statistical analysis of data on many instances of the phenomenon in question. Even then, causality cannot be proved beyond all possible doubt. The scientist seeks to disprove a hypothesis, not to confirm it. A hypothesis is accepted only when it cannot be rejected.

Essentially I need to become more like the CIA when I develop a hypothesis and check it.  Also consider that in my case I'm never going to be able to find absolute rules.  The situation and factors I am judging will always be obscured because I will never have all the information available, and the information I do have will always be gathered second-hand, through a media report.  Actually, if I watch video directly then I could.  Either watching games or you-tube clips of players.  

First-hand information and observations would definitely help.  If I watch the games myself and receive little second-hand information (filtered) then I could study my own patterns of observation and see what I bias.  

What I don't want to do is get into the business of constructing narratives.  Narratives, I'm learning, are the cause of many cognitive biases and much confusion of the part of people everywhere.  They assume causality and order in what is generally a chaotic world and unruly world.  I need to get more scientific in my research, my formulation of hypotheses, and my testing to look for significicance. 

Saturday, April 4, 2009

Phoenix vs SacTown

Phoenix played the Kings in the second of a Home and home (with a few other games in between).  The Kings upset Phoenix at Sacramento.  The result was a major blowout of the Kings at home for Phoenix.  I've seen this many times before.  If a good team gets upset on the road, and they play that team at home soon after, it very requently results in a blow-out win for the superior team, now playing at home.  These little sequences occur frequently in the NBA season and are a nifty little opportunity.  

Friday, April 3, 2009

The Intelligence Analysts Toolkit

I need to create a formal "toolkit" for analyzing games, schedules, and circumstances.  I'm reading a book that my friend sent me, that is one of the CIA's reference books for intelligence analysts.  That is essentially what a sports bettor is: an intelligence analyst.   It is titled Psychology of Intelligence Analysis and can be found here.

A theory is a generalization based on the study of many examples of some phenomenon. It specifies that when a given set of conditions arises, certain other conditions will follow either with certainty or with some degree of probability. In other words, conclusions are judged to follow from a set of conditions and a finding that these conditions apply in the specific case being analyzed.

An analyst seeks understanding of current events by comparing them with historical precedents in the same country, or with similar events in other countries

Objectivity is gained by making assumptions explicit so that they may be examined and challenged, not by vain efforts to eliminate them from analysis.

Failure To Consider Diagnosticity of Evidence. In the absence of a complete set of alternative hypotheses, it is not possible to evaluate the "diagnosticity" of evidence. Unfortunately, many analysts are unfamiliar with the concept of diagnosticity of evidence. It refers to the extent to which any item of evidence helps the analyst determine the relative likelihood of alternative hypotheses.  Evidence is diagnostic when it influences an analyst's judgment on the relativelikelihood of the various hypotheses

Scientific method is based on the principle of rejecting hypotheses, while tentatively accepting only those hypotheses that cannot be refuted. Intuitive analysis, by comparison, generally concentrates on confirming a hypothesis and commonly accords more weight to evidence supporting a hypothesis than to evidence that weakens it.  (I think I do this (although I am in the formative stage of hypothesizing)).

Stech notes that in each of these highly successful efforts, the analysts employed procedures that "... facilitated the formulation and testing against each other of alternative hypothetical estimates of enemy intentions. Each of the three accounts stressed this pitting of competing hypotheses against the evidence."

This is basically the summary from Chapter four.  Some very interesting material, for sure.  

A Formal Thesis

What is the thesis of my research?  What is the purpose, the point, the grand scheme?

I believe that certain situations and factors are repeated on an annual basis that lead to significant investment opportunities for the astute fan of sports. Without getting too specific, groups of humans suffer from cognitive biases when judging likely outcomes and assigning probabilities to those outcomes. These errors are frequently repeated and lead to significant reward opportunties with relatively low risk.  These biases are magnified in both long term (season predictions) and short term (in game trading).  

I believe that effort trumps talent in professional sports leagues.  I can look at teams with added motivation, and I can look for teams with less motivation than their opponents.  Essentially, a demotivated team is as un-effective as a motivated team is effective.  Both disparities, if unnoticed by the general population, create investment opportunities.  This also manifests itself in "mini-playoff" games between good teams and bad teams.  

I believe that macro level trends of energy take course throughout the professional athlete season, most extensively in the NBA.  These macro trends must be studied and analyzed to be properly understood.  I also believe they are not understood or studied currently, and if mastered can lead to significant investment opportunities.  

I believe some factors are not accurately gauged by the betting and watching public.  These factors repeat themselves.

Lastly, I believe that an astute, focused, and educated person can consistently win games and make money betting on sports.  

Summary of All Predictions so Far

With this blog post I want to summarize and categorize all my predictions that I've made in this blog so far.  Its time to be honest and get a little bit of accountability.  I need an accountabilabuddy, if you will.  

In no particular order:
2/19/09, I wrote that Tyson Chandler was back on the Hornets.  They had previously exploded on Orlando for a 32 point win; but then they discovered the trade was cancelled and I predicted they would be flat the next game or two.  Next two games: 111-115 OT loss at LA and a 14 point loss at Utah (second night of back to back).  
Total:  1-1

Lakers Watch series (six games).  They struggled at home against New Orleans and at Minnesota, not covering the spread.  Then they won big at Pheonix and at OKC.  Then they got demolished by Denver and lost at Pheonix.  They went 2-4 against the spread during that period.  I'm not sure hot much of it though is me fitting a curve to the data or the data to the curve.  I sort of arbitrarily picked the starting time.  But its a good observation to make and realize that teams to "step up" their intensity for a while but they have to pay the piper eventually.
Total: I don't know how to score this, so I'll leave it out.

3/4/09. I boldly predicted Dallas would win at San Antonio after being called out by Mark Cuban. They were 2 point underdogs.  They won outright.
Total:  2-1  

March 7th, 2009, Clippers article published on Bleacher Report.  I predict games I thinkt he Clippers will get blown out in.  Predictions in the article:
Clippers hosting Cleveland:  fail
Clippers at Detroit: Lost by 18.  Success. 
Clippers at Celtics: Lost by 13.  Success.  
Total:  4-2

Superbowl: I predicted (and bet 500) that the Cards would cover the spread.  They did.
Total: 5-2

Conference round: Eagles at Cardinals: I thought Cardinals would lose to the Eagles.  Failure!
Total: 5-3.

Divisional round: Ravens at Titans.  Center Mawae was out for Titans.  I thought that would swing it in the Ravens favor.  Result: Ravens win.  
Total: 6-3

Wildcard round: 1/9/09 post.  I thought Ravens would beat Dolphins (they did) and Colts would blow out Chargers.  Success, and failure.  

Total: 7-4

1/1/09: Predicted USC would beat Penn State handily.  They did.
Total: 8-4.  

12/26/08: Three bowl games predicted.  Results: Cal failed to cover spread, CMU lost, FSU covered.  Results:  1-2
Total: 9-6

Thats all the ones off the top of my head.  If I include the results from Lakers watch I'm 13-8.  Otherwise 9-6. 

Its not bad.  I need to continue to refine my theories and get better at detecting certain games that are likely to be predictable.  

Wizards Cavs Part II

I read about how the Wizards were really flying around last night and really wanted a win.  The Cavs kept firing up three points and the Wizards kept driving to the rim to make contact.  The result:  the Wizards ekeing out a win.  The sports writer commented on how much more energetic the Wizards were compared to the Cavs.  This just shows that energy always trumps talent in the NBA.  At this level, whoever wants it more can still win the game if the other team is slacking off enough.  I suppose thats true at any level really.  

This definitely plays into the Effort Model.  

Thursday, April 2, 2009

"This is our playoffs"

I've heard this phrase many a time.  Athletes on a losing team refer to some upcoming game as "their superbowl" or "their playoffs".  Just off the top of my head I can remember Ray Lewis talking about the Patriots when the Patriots were undefeated; he said that his team was not making the playoffs and that this game (which was on MNF) was their Superbowl.  They were crushed when they lost on a controversial referee call.  

I heard Raja Bell refer to their upcoming game against the Lakers as it being a playoff game for them.  And I heard Gilbert Arenas refer to their game against Cleveland this year as their playoff game.  It happens a few times a year, when a team with a losing record plays a rival or big-time team that they match up well against and they play as hard as they can.  They really believe they can win.  

And they usually do.  And if not, they at least cover the spread. In the NBA especially, certain teams just match up well against superior teams.  Not every team, obviously, but against that one special team they match up well.  Like the Warriors and Mavericks in the 2007 playoffs.  

But this is usually a rare occurance and I don't think it is ever reflected in the spread for games.  Nevertheless, this is a major factor in the outcome of the game. It is a gametype I need to look out for.  Its not necessarily a cognitive bias but it is definitely a game type.  

I call it "the playoff".  

The Cavs were 12 point road favorites to the Wizards.  The Wizards arena was sold-out.  Considering they have less than twenty wins this season, that is indicative of how much it was rocking.  Also, when the Lakers visited Charlotte this year, the stadium had its largest crowd....ever.

My 100th Post!

Well here is my 100th post on my blog Insights into Sports.  Incredible that I've made so many posts.  I have 210 profile views.  On Bleacher Report I've written four articles with a cumulative 1,886 article reads as of this writing.  Awesome.  I've done a lot but there is so much more that I could do.

The reason for this post though is to note that Jay Cutler has been traded from his team (the Denver Broncos) to the Bears.  The Bears are in the NFC while the Broncos are in the AFC.  This continues the trend of sending coaching talent and quarterbacks to opposing conferences so that they can't come back to haunt them.  To me it indicates a suspicion that someone's detailed knowledge of scheme and personnel could really hurt a former team.  

I've seen this many times and will be curious to see if the Bears play the Broncos.  If so, it is likely that Cutler would tear up the Broncos defense because he has seen them in practice for three years.  

New Concept: Effort Model

This new concept I just thought up I will name the effort model.  Basically it asserts that if you watch a typical sports game, the athletes are playing at 75% of their maximum effort.  Maximum effort is designated as what?  I haven't decided yet.  It could be game 7 or the NBA finals, but players are usually worn down by then.  It could be the singular game in which they give max effort and are also able to give max effort because they are young, fresh, don't have nagging injuries, etc.  Perhaps then there is also a moving value of how much max effort they can give out.  Effort being hustle, energy, phyiscality, etc.  We all know that physical play wears down opponents, but it also wears down the people playing that way.  Look at Kevin Garnett this season, he has played very hard and very physical and is now suffering from a knee ailment.  So this effort model concept is something I will be developing in the future.  

Ready to blog again

Wow.  I haven't blogged in nearly two weeks and haven't had a meaningful blog post in about three weeks.  Thats the longest stretch since I started the blog.  However, I'm done with Halo and so I should pick up the blogging pace like I did earlier.  I think one contributing factor was that I simply wasn't watching any sports, and its tough to blog when you don't ever watch sports.   

I'm still interested in the same things though and have stored up a few topics in my mind. First off, an article I read on Truehoop: 
EW YORK -- This is how Mike D'Antoni tells me the story the morning after Kobe Bryant came into the Garden and dropped a merciless 61 on his Knicks in early February, with a catalog of spin moves and fadeaways that had the sold-out crowd cheering the visiting Lakers:

D'Antoni passed Bryant near center court, walking onto the floor minutes before the house lights were dimmed for pregame introductions, and said, "Hey, Kobe, what's going on?"

This is a phrase D'Antoni uses the way your mom greets company at the door, asking folks to come in, sit down and talk a spell. It's a West Virginia welcome between friends.

D'Antoni was one of Bryant's idols when the kid was growing up in Italy and D'Antoni was starring in the Italian Professional League. Kobe wore D'Antoni's No. 8 as a young Laker. The two became brothers in arms while spending three years as part of Team USA, too. They won gold together.

"And he won't even look at me," D'Antoni says, raising both eyebrows.

No "Whassup, Mike?" no quick head bob, no raise of the eyebrows, nothing. Pursed lips. Boxer's shoulder wiggle. Steely, faraway stare.

D'Antoni laughs. Shakes his head a little. As if to say, I tell you what, that Kobe Bryant, he's pretty damn good.

"I knew right then we were f---ed."

thats an interesting story.  It shows how Kobe was motivated and picked up his game for the game in MSG.  I think that certain top-caliber players do pick and choose which games to ratchet up their focus and their energy.  As I've written about before, rarely do players give 100% effort.  They start out at around 75% effort and can go up or down depending on associated factors.