Football season is officially underway! In honor of that, here's a look at each position's composite player!
As you might expect, different sports have a different ratio of ethnicities. For example, you might expect more Pacific Islanders in Rugby or Asians in Badminton.
The same is true for different positions on a football team. Apparently, offensive linemen are more likely to be white while running backs are more likely to be black.
Here is a visualization that shows what happens when you average the top players' faces in various positions?
osmutiar via Reddit
Composites are interesting.
While you may be thinking "this player must be unstoppable" ... statistically, he's average.
The "composite" NFL player would be the 848th best player in the league. He's not a starter, and he plays on an average team.
We found the same thing with our trading bots. The ones that made it through most filters weren't star performers. They were the average bots that did enough not to fail (but failed to make the list as top performers in any of the categories). The survivors were generalists, not specialists.
In an ideal world, with no roster limits, you'd want the perfect lineup for each granular situation. You'd want to evaluate players on how they perform under pressure, on different downs, against other players, and with different schemes.
That's what technology lets you do with algorithms. You can have a library of systems that communicate with each other ... and you don't even have to pay their salary (but you will need data scientists, researchers, machines, data, alternative data, electricity, disaster recovery, and a testing platform).
You won't find exceptional specialists if your focus is on generalized safety. Generalists are great, but you also have to be able to respond to specific conditions.
Onwards.
Super Bowl 2020
It's not just the fans that are excited about the matchup, it's also the bookies. Two years ago, gamblers set a record by placing $158.6 million in Super Bowl bets. Expect more of the same with gambling now legalized in an additional 13 states beyond Nevada.
The theory is that a Super Bowl win for a team from the AFC foretells a decline in the stock market and a win for the NFC means the stock market will rise in the coming year. So, if you're hoping for a strong S&P you'd be rooting for 49ers.
There's one big caveat ... it counts the Pittsburgh Steelers as NFC because that's where they got their start (or as a data scientist would caution ... they did that to fit the data better).
With that "adjustment," at one point the SBI was "right" 33 years out of 41 - an 80% success rate. Sounds good, right?
Come on ... you know better. It's been wrong four of the last four years ... another sign of spurious correlation if you weren't sure.
Here are some other "fun" stock market fallacies:
Back to Reality
Rationally, we understand that football and the stock market have little in common, and we probably intuitively understand that correlation ≠ causation. Yet, we crave order and look for signs that make markets seem a little bit more predictable.
The problem with randomness is that it can appear meaningful.
Wall Street is, unfortunately, inundated with theories that attempt to predict the performance of the stock market and the economy. The only difference between this and other theories is that we openly recognize the ridiculousness of this indicator. More people than you would hope, or guess, attempt to forecast the market based on gut, ancient wisdom, and prayers.
While hope and prayer are good things ... they aren’t good trading strategies.
As goofy as it sounds, some of these "far-fetched" theories perform better than professional money managers with immense capital, research teams, and decades of experience...
I have a thought experiment I sometimes ask people.
What percentage of active managers beat the S&P 500 any given year?
... Now, what percentage beat the S&P 500 over 15 years?
Recently, the answer is about 5% (and that's in a predominantly bull market). For the record, that's significantly worse than chance. Perhaps that means something they're doing is hurting, not helping.
via Gaping Void
There's simply too much information out there for us to digest, process, rank, and use appropriately.
Every second you spend looking at a market is a second wasted.
There are people beating the markets — not by using the Super Bowl Indicator ... they're doing it with more algorithms and better technology.
There will never be less data or slower markets. A good reminder that if you don't know what your edge is ... you don't have one!
Onwards.
Posted at 04:07 PM in Business, Current Affairs, Games, Ideas, Just for Fun, Market Commentary, Science, Sports, Television, Trading, Trading Tools | Permalink | Comments (0)
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