The Sports Investing Index was down -14.1% during July, with all of the sports marketplace action coming in Major League Baseball (MLB). After several months of gains in baseball, the contrarian approach used in the Index — and Sports Insights Square Plays — had a difficult month. Similar to other investments, there are risks as well as returns. In a recent blog post about the index, we highlighted some financial marketplace risk disclosures:
An investment can result in losses as well as gains.
Past performance is not necessarily indicative of future performance.
- After reaching a new monthly all-time high at the end of June, the Index now finds itself in a drawdown.
- Although July was a difficult month, the Index is still up +4.1% for the year.
- MLB continues to dominate Index performance, but college football and the NFL will be contributing to the Index shortly. Sports Insights will be updating its annual research on “betting against the public” in college football and the NFL in a few weeks.
Sports Insights publishes a Sports Investing Index to reflect the performance of applying contrarian value approaches to the major US sports marketplaces. The origins of the Sports Investing Index were published in our book, “Sports Investing: Profiting from Point Spreads.”
Sports Investing Index Details
- The Sports Investing Index is based on Sports Insights Square Plays. (Square Plays are the day’s most lopsided games in terms of the public betting trends)
- Additional indexes and benchmarks may be developed over time.
- Inception: 2003
- Index performance will be published monthly.
- Sports Covered: NFL, College Football, NBA, College Basketball, MLB, NHL
Figure 1: Sports Investing Index (August 2003-July 2011)
Below is recent performance for the Sports Investing Index — along with other financial index benchmarks, including the S&P 500 and long-term US government bonds.
Table 1: Index Performance (2011)
|Sports Investing Index||-14.1%||+4.1%||+3.3%||+4.1%|
Other Index Features
- Investable – Sports Insights Members are able to invest in the index by following Sports Insights Square Plays. Sports Insights generally publishes its Square Plays at least one hour before sporting events.
- Each Square Play will represent a play made while risking 1% (each unit represents 1% at risk, per play).
- Represents a strategy of investing in the US sports marketplace using a contrarian value approach.
- Inherent return — based on research, there appears to be an inherent return in the sports marketplace based on a systematic, contrarian approach to the sports marketplace.
- The Index can be reconstructed by reviewing Sports Insights Square Plays.
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We do not guarantee that the trends and biases we’ve found will continue to exist. It is impossible to predict the future. Any serious academic research in the field of “market efficiencies” recognizes that inefficiencies may disappear over time. Once inefficiencies are discovered, it is only a matter of time before the market corrects itself. We do not guarantee our data is error-free. However, we’ve tried our best to make sure every score and percentage is correct.