Moneyball is not just the title of the movie but it is a phrase that spun into existence because of Oakland Athletics general manager, Billy Beane and the use of analytics to turn baseball on it’s head.
The movie tells the true story of the Oakland As who realized they needed to do something a little different to try and make any kind of decent sized dent in Major League Baseball.
Once again math is the answer to it all, you could use averages, on base percentage and any number of other things to produce wins simply by a player producing based on past behavior. In addition if you could teach him percentages to increase those numbers you looked for, even better. It’s a cold, calculating practice that leads to trades that leave fan bases scratching their heads.
If you are not familiar with the story feel free to watch the movie, and if you have you’ll already know all this stuff and a lot more detail, so there’s not too much point laboring the point here, unless you’re into sports betting.
If you are trying to make it pay betting on baseball, then the principles applied in “Moneyball” are highly relevant to your efforts.
If two dice were thrown and you were given odds of 36-1 on snake eyes, (double one) you’d be a fool not to take the bet. That’s because the odds of a coin landing on one side or another are exactly even money, whilst the odds of a double one when two dice are thrown is 1 in 36, or 35-1 against. The laws of probability state that you’d gradually come out ahead over time.
Let’s imagine the Oakland As are about to play the Cleveland Indians in the World Series final. Let’s also assume that you think the As have two chances out of three whilst the Indians have a one in three chance. So in other words, having weighed everything you can up about the series, you think that if it was played three times, the Oakland As would tend to win two of them as an overall mean average whilst the Cleveland Indians would be likely to win one out of three – all as a hypothesis obviously.
Now let’s say you look at the odds and the Indians, who you’ve deemed to have a one in three are actually 5-2. In this case, you’d take the bet. Similarly, if you saw that the As were actually odds of 4/6 rather than the 1-2 you thought was a fair assessment you’d take that bet.
Now quite how you arrived at your own assessment of value is your affair – and that’s where the stats analysis comes in. But what’s crucial here is that you arrive at that individual assessment in complete ignorance of the actual odds. Then you take the bet if the odds are a decent proportion better than you have deemed they “ought” to be. In practice, of course, the same applies to the points spread . You come up with your own independent assessment of where the points spread “should” be and act on your own analysis if they’re out by a substantial percentage in practice.
Remember, it’s only by using your own judgement and going against the market at times that you can possibly make money here. If the market was always right you’d have no chance.