Have you ever been to a football game and never seen a punt? Yeah, me neither. You would probably think that coach was crazy. I would have thought so too, but the numbers say otherwise.
It seems like most of the comparisons between advanced statistical metrics in sports and investing have revolved around baseball. This is the first example I have seen of a football coach really thinking outside of the box to give his team a statistical advantage every game. Sure, football coaches have used statistics to game plan and find tendencies, but what this coach is doing goes way beyond that.
How does this relate to investing? This coach has found an edge and relentless exploits the edge no matter what the cost. He knows that statistically he is better off never giving the ball to the other team. He never punts the ball to them. When he kicks off, it is always an onside kick. If the other team wants the ball they have to earn it. He readily admits they only have a 50% fourth down conversion rate so it isn’t like this is some sort of offensive juggernaut that can never be stopped. This coach is wrong a lot. He no doubt looks like a fool quite often. But he has done the math and knows his methods give him a clear statistical advantage to win games over time. It might not work on any given play, series, quarter, or half. Winning investment strategies don’t work every day, week, quarter, or even every year. But over time they do, and the only thing preventing you from realizing those gains buckling under the pressure and failing to execute the strategy. The edges are small, but they add up over time.