A sporting chance

When I try to explain Australian values to those in the UK, one of the main things that hits home is that in Victoria, there are two public holidays a year for sporting events.

It would be incomprehensible for Britain to declare a holiday for the Grand National or the Friday before the FA Cup Final.

I love sport – both playing and watching it.

I also love a good crack at a Fantasy Sports competition. For those unfamiliar, you are typically given an imaginary budget of $100m, a list of players in a sports league, each with varying values and the chance to build a squad.

How your players perform over the season scores you points, 1 point for a successful pass, 8 points for a goal etc. etc.

In early 2017, before we’d moved to Australia, I thought it would be fun to join the families AFL Supercoach fantasy league. I’d watched maybe half a dozen games of AFL in my life. It seemed fun and I thought it would be good training for coming to live in Australia permanently.

My father-in-law and brothers-in-law happily accepted this patsy to the league.

I started with little to go on. I found out the Western Bulldogs had won the Grand Final the year before so a couple of their players went in. I’d heard of Buddy Franklin at the Swans and stuck him in my forward line.

This ate up a chunk of my budget being more expensive players.

I started looking at the Stats. I found a few players who’d done well previously but had a poor 2016, so were a bit cheaper. A few of those guys went in.

Another few players were injured in 2016 so cheaper this year. I took those onboard.

I would watch the one televised match in the UK on the Saturday morning and made my trades based on just the stats and official team announcements rather than what I’d seen in games.

By season end, I’d ended up ranked 1028 in the overall competition out of 100,000+ teams and won the family league. I think I was in the top ten of non-Australian based players.

Dissecting the season over the family dinner table a few things became apparent. The family would never pick Collingwood players as they were Carlton fans. The players they’d held in their teams in previous years, that had let them down through injury or form were never picked again.

Emotion, such an important part of sports, was clearing to the detriment of being successful in a statistics based game.

Since moving over permanently, my year end rankings have fallen steadily

2017: 1,028

2018: 2,979

2019: 8,273

2020: 1,017 (an anomaly I think – lots of player matches cancelled due to covid, meaning players got zero scores, which I missed through luck rather than skill)

2021: 19,962

So where have I gone wrong?

This to me is a classic case of allowing information and bias to affect my judgements.

In the relative vacuum of the UK, I had little to go on but numbers. No news reports, speculation or opinion to bias my views.

Now an Australian resident, I watch a few games a week and have my favoured teams and players. My fantasy selection was a mess and my biases are now very hard to shake.

I’m not going to select a Collingwood player unless I really must (currently this isn’t a bad thing.)

Investing runs along a similar theme.

If you pick your investments based on the weekend money newspaper pullouts or the business news, you’ll end up going crazy and probably losing a lot of money.

People who’ve been burnt but a bad investment may never invest again for fear of getting burnt again.

But if we look purely at the data, Global stocks go up over 60% of their trading days. We will always end up with more, the longer we hold.

The market can be beaten in the short term by luck but can’t be beaten consistently over the long term.

We buy a diversified selection of the world’s companies, offset this with enough bonds or cash to help us sleep and get on with our lives.

When you’re next at a barbecue (remember those?) and someone starts bragging about their investment or fund manager, they’re likely confusing skill with luck. They’ll just keep quiet on the other investments that didn’t go as well.

A well-informed investor will shut out the noise and stick to the facts and a consistent investing process.

To end with one of my favourite quotes from W. Edwards Deming:

'Without data, you’re just another person with an opinion',