“Yes!” When John Harbaugh asked him, “Do you want to go for it?”, That was Lamar Jackson’s answer. The fourth down in a declining second of recent break-in with Kansas City Chiefs, led by Patrick Mahomes, the highest quarterback of consensus. But despite the question, the course of action was by no means suspicious. Ravens was one of several teams applying a more analytical approach to the sport of football, so he was aiming for it in 4th and 1st place.
I know, I know … As soon as you start reading this, I extend this post post-game celebration after Ravens overcame many headwinds and probably defeated them. You’ll assume you’re using it as an excuse to anoint Kansas City Chiefs. It’s an opportunistic justification to glorify the vulnerable as he rubbed Lamar Jackson’s disliked nose on the Bermudagrass mountain kicked up by LJ and won a huge quarter. You’ll think it’s a dive in the last few seconds of the game.
But I’m not the only Ravens enthusiast to talk about this. Soccer is not the only thing we are talking about. Instead, we’re talking about math and probabilities, so this topic is being talked about in an unknown corridor on Monday morning’s quarterbacking. This is the type of logic used for even more investment than football. Let’s take a look at a single analysis that played a huge role in this game. Next, we provide one of the most important analyzes to work on in pursuit of the right investment.
Force and One
The common sense of the National Football League is that after reaching 4 downs, if you are not within the field goal, you need to punt the ball against your opponent. It’s much easier for the opposition itself to score.
But Ravens is one of several teams that no longer succumb to customs or even just an educated gut sensation. They use ruthless probabilities to make these decisions.according to Next generation statistics, Ravens said, “There was a 75% chance of converting at 4.NS-And account for Lamar Jackson in QB. ”
If they are converted, they have a 99% chance of winning. If they fail, the chances of winning plummeted to 33%. But if they punt, will they return the ball to Patrick Mahomes? The odds of winning would have been only 58% (and believe me, it felt much lower at that point in the game). If you connect all of these to your NGS calculator, you’ll get the “expected win rate”:
・ Please do your best: 82.4%
・ Punt: 57.6%
Go for it, they did. And win, they did well.
There are so many analyzes that can be considered regarding an investment that they are often referred to as quantitative, premium, factor, or factor-based investments. Hordes have been identified and far fewer are considered to be beta, small, value, profitable, momentum, etc., persistent enough to get our attention. But there are some that are better than the rest. Instead of trying to get in and out of the market at your convenience, you choose to stay in the market and do nothing, even in difficult times.
Below is a chart showing the virtual growth of the market, tracked by the S & P 500 over the last 30 years (and don’t miss the exciting disclaimer *).
Expressed as a percentage, investing in the market over the last 30 years has virtually provided investors with a combined return of 10.23% per year. Don’t look too dirty. If you miss the best performing day, your returns will drop to 9.84% per year. The annual rate of return drops to 8.60% if you miss the best 5 days, 6.52% if you miss the best 15 days, and 4.88% if you miss the best 25 trading days (only). The last 30 years! (One month US T-Bills gave you 2.64%.)
What is the lesson here? There are many ways to adjust and improve your investment portfolio. (There are a few here.) But it makes sense, but it’s a slight improvement over the simple (but not easy) discipline of sticking to a strategy in difficult times.
Of course, it assumes that you have a clear and cohesive strategy, not a collection of various miscellaneous investments and strategies that tend to accumulate over a lifetime.
What are the other lessons? Go for it 4th and 1st.
If you have Lamar Jackson.
And you will punt it to Patrick Mahomes.
It doesn’t always work (and there is no guarantee that the market will work), but it puts odds in your favor.
So why did Harbaugh ask Jackson if he wanted to do it, even if he knew it was a decision he and the attack coordinator had already made, based on probability? Because, as Daniel Pink taught me in a great book, drive, Autonomy is a powerful motive.
Ravens can rely on cold statistics to make certain decisions, but Jackson is playing with infectious joy, so by involving him in the decision, he gets him involved and is confident. Infused him. 10 other players. That decision alone needed to increase the chances of a successful outcome. At least it’s just a fun and wonderful story.
Similarly, financial advisors, we should never ask our clients. We can educate, fine-tune and teach, but ultimately the decisions, and ultimately the results must be theirs. Because they are more likely than us to stick to the decisions they make.