Predicting sports outcomes, or more plainly, investing in sports, is a craft.
Wikipedia describes craft as meaning "A 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?