Why Contrarian Sports Investing Works
Yesterday, one of SportInsights’ analysts highlighted the Colts-Titans game on the SportsInsights.com blog. In addition, SportsInsights made the Titans an NFL Square Play.
Although the Colts dominated much of the game, the Titans made a game out of it. Very late in the game, while the Titans were not seriously threatening to win, they succeeded in a “backdoor cover” against the spread.
SportsInsights put together an article on “why contrarian sports investing” works. We take a closer look at the fundamental reasons why contrarian methods work — as well as the research, numbers, and data that backs these methods.
Below are some highlights of the article. Please visit the article for more details.
How can “David beat Goliath?” Points Matter!
- Oftentimes, the “favorite” completely demolishes the “underdog.” Please see this blog post on another potential play that looked “ugly” — http://blog.sportsinsights.com/2010/10/a-look-at-monday-night-football/. Here, one of SportsInsights’ analysts commented that: “… Truth be told: if we played this game 100 times, we’d probably see 30 blowout victories for the (favorite). They are still a strong team…” Indeed, the favorite (New England in a Monday Night Football game), crushed Miami by a score of 41-14 in that lopsided-bet game.
- On the other hand, in the same blog post, the analyst commented that this underdog would probably cover “against the spread” about 55% of the time.
- Public perceptions can often push pricing out of line with actual value. In the case of sports betting, the betting lines are impacted by public perceptions and betting syndicates.
- Line value: The sports marketplace is very efficient. Take the Colts-Titan game that we mentioned above. The point spread opened at Titans +2, which is exactly where the game ended! However, the constant pounding of betting on the Colts pushed the line all the way up to Titans +3.5. This extra bit helped contrarian sports investors squeak out a win — and allows bettors who “bet against the Public” achieve a measurable edge against the spread.