Tailing Aaron Rodgers

First, the New England Patriots pre-season win totals…

“If you forced me to make a play I’m circling the under at 9.5 (wins) at -120. I think there is a longer tail to the under here; if they stick with Cam Newton a little too long, if Mac Jones is a little farther away than people realize, if there are injuries in this relatively aging defense, if the offensive line isn’t quite as good, if the offensive weapons don’t really make a contribution. There are a lot of ifs that are potentially negatives for the Patriots and I am perfectly fine playing the win total under.” – Drew Dinsick, Deep Dive Podcast, July 2021

During the 20/21 NFL season we ‘Tracked Tom‘ to see if Tom Brady would hit the over on his passing yards for the year. The theory at the time was the same that Drew describes: more can go wrong than go right. The question wasn’t about how well Brady played, per se, but rather what big events might happen and which way would they break? For Tom, everything was terrific and he hit the over.

It’s Plus EV Analytics who thinks this way, in part from reading Nassim Taleb. And from him we’ve got another for the 21/22 NFL season!

There’s a chance Aaron Rodgers says chuck-it, and goes on to host a game show and he throws 0 touchdowns, a 100% decrease from the line of 38.5. There is no chance he Proves them All Wrong™️ and has a 100% increase to 77 touchdowns (the league record is fifty-five, only three players have thrown more than fifty).

Visually the idea looks like this:
Graphically

Take the under on Rodgers.

But not all systems are like this. Sports can be under on the idea of injury alone. Financials can be under too. Cryptocurrencies, for instance, can be hacked, regulated, or fall out of fashion. If someone put the over/under line of Bitcoin at $38,500 at the end of the NFL season, a similar set of arguments and conclusions flow.

To a point.

Unlike Rodgers, Bitcoin could double. It’s a different system. Businesses are more like Bitcoin than NFL lines. Most of the Amazon services started out as bets: will this thing work? Amazon’s wager was the outlay in resources but Amazon’s winnings, unlike Aaron’s TDs, could easily double, triple or more. Here’s how Jeff Bezos put it.

“We all know that if you swing for the fences, you’re going to strike out a lot, but you’re also going to hit some home runs. The difference between baseball and business, however, is that baseball has a truncated outcome distribution. When you swing, no matter how well you connect with the ball, the most runs you can get is four. In business, every once in a while, when you step up to the plate, you can score 1,000 runs. This long-tailed distribution of returns is why it’s important to be bold. Big winners pay for so many experiments.” – Jeff Bezos, Invent and Wander

Fat bottom tails make the complex world go ’round and a basic understanding of distributions, curves, and areas helps.

Football ’21 favorites or field?

“Between the Chiefs, Bucs, Packers and Bills there’s a fifty percent chance of one of those four teams winning the Super Bowl. In other words, you can have those four teams or the other twenty-eight in the league.” – Cade Massey, Wharton Moneyball, August 2021

Take the other twenty-eight! This idea holds in both sports and investing.

One potential bit of mental muck is what we can call Visibility. It is easy to imagine a specific thing happening rather than a range of things happening. Visibility is part-of-the-reason counterfactuals and postmortems are difficult to conduct. That three of the four quarterbacks have in fact won a Super Bowl makes this effect more so. I can ‘see’ one of these quarterbacks winning the big one, but that doesn’t provide helpful information.

Not so fast though.

What is ‘the field’? As Tim Harford wrote, it is as often the words as the numbers which cause confusion (life expectancy for instance). In the case of the NFL, it’s the twenty-eight other teams that might win the Super Bowl.

But is that right? Can every other team win the Super Bowl? While on “any given Sunday” any team might win, stringing together a group of wins to be champion is far less likely.

The central point to Zeckhauser’s Maxims is that reframing a situation may cause our conclusions to change. We used this framework to ask: Was the Ohio Vaccine Lotta a Good Idea? What if we reframe the question around Super Bowl favorites then?

Roughly speaking there are three groups: the Favorites (4 teams), the Chasers (X), and the No Chancers (Y). Now how many Chasers and No Chancers there are is questionable, but the framing changes our thinking. If this is the structure then the relevant idea isn’t the field but a subset of the field: the Chasers. If there are 4 Favorites, 4 Chasers, and 24 No Chancers then the choice changes. Take the favorites. What if there are 4 Favorites, 8 Chasers, and 20 No Chancers? The top twelve preseason favorites have won 85% of the previous 20 Super Bowls.

There’s no definite answer to this Favorites, Chasers, and No Chancers structure but the framing does change how we think about it.

Another mental model is the same mindset we used “Tracking Tom“. The idea there was that there’s more downward variance than upward variance. The same idea holds for the Bucs, Chiefs, Bills, and Packers: those teams are more likely to underachieve. Put another way, it’s more likely that something goes wrong (someone’s quarterback underperforms) than right. The Chiefs and Bills, for instance, both notably outperformed their 2020 Pythagorean figures.
“Uncertainty is generally underestimated,” said Adi Wyner, “and that means that the field collectively have a little bit more probability than you might assign to four teams.” The data agrees. Take the field.

Inverting Punting Questions

Typical analytic situation have three potentials for improvement (or, competition).

  1. Better data, think motion tracking in football or hockey.
  2. Better models, think the shift from batting average to on-base-percentage.
  3. Better people, think the 1980’s shift when Edward Thorpe began competing with other Ph.D.

However, the largest potential gain in analytics (at least sports, circa 2020) is the implementation. It’s no use coming up with a good idea if you can’t get it into the portfolio.

Richard Sherman and Chris Collinsworth offer a stopgap solution. Talking about the Pittsburgh Steelers decision to punt on fourth and one from the forty-six, “If you’re the Cleveland Browns you’re definitely relieved,” said Sherman, “shoot you only needed a yard, you can fall for a yard on most defenses.”

This idea has been around a long time in sports, Bill Simmons has spoken about it often on his podcast; what does my opponent fear the most? I’ll do that.

Some NFL teams have solved the implementation obstruction with a direct line from the analytics department to the coach. Teams slower to adopt and adapt can take the idea of inversion and just ask one of their coaches. It would be great to see a head coach ask his defensive coordinator if the offense should stay on the field, or indeed if they should punt.

Note, I listened to Thorpe’s A Man for All Markets and while long, it was good particularly because it was read by him!

An easy way to change your mind.

This idea is related to Tyler Cowen’s idea of ‘meta-rationality’ which you read about in this pay-what-you want pdf.

Perhaps there’s no better time to see, sort, and participate in over reactions than week one of the NFL. Though I only watch a full game or two a year, there are a lot of lessons from the likes of Mike Lombardi, Bill Belichick, and questions like, should running backs run the forty-yard-dash? (Narrators: meh).

So, after week one of the NFL, how much should someone change their mind?

There were two comments from Wharton Moneyball related this this exact question.

First, the hosts wondered why the small but powerful vitamin D study wasn’t getting more attention. Their guess was a combination of things including excessive dosing, strong priors, sample size, and general application (the participants were already hospitalized but went to the ICU at a much lower rate with treatment).

While people may have strong beliefs about the efficacy of vitamin D it doesn’t hurt to go for more walks, while the weather holds at least. Whether or not someone believes in vitamin D, walking can’t hurt.

Late in the episode, Cade Massey and Josh Hermsmeyer noted the impressive week one play of Gardner Minshew. While both are rooting for his success, there’s no ‘go-for-a-walk’ equivalent for updating beliefs. Base rates suggest we stay closer to home until Mr. Minshew racks up some road wins.

Lastly is this study about teacher expectations. “(U)nbiased (i.e., accurate) beliefs can be counterproductive if there are positive returns to optimism or if there are socio-demographic gaps in the degree of teachers’ over-optimism, both of which we find evidence of.” Want better results from students? Have higher expectations than the data suggests.

The easiest way to change your mind is to make changing your mind inexpensive.

The hardest way to change your mind is to attach ideas to yourself. Jason Zweig calls this thinking “identity protective cognition,” and said, “If you are not judging the validity of ideas by long-term, objective, peer-reviewed evidence then you are just protecting your own identity and it’s foolish.” 

If vitamin doesn’t affect covid health, it still doesn’t hurt. If high expectations don’t affect student results, it still doesn’t hurt. If extrapolation from week one of the NFL doesn’t predict season success it does hurt.

Related: Make small poker bets.