Jan
13
Some Things We Can Learn From Basketball About the Markets, from Victor Niederhoffer
January 13, 2013 | Leave a Comment
The public has no right to lose as much as they do. It's the system not the public. Antoni losing 6 in a row at LA as he tries to get the Lakers to play speed ball with 100 year old players. The public following a system of buying the crosses in the moving averages or seasonality in the market as they get front run or trying to take out 1/2 a point in stocks in an hour when the high frequency boys are ahead of them in a hundred ways and can afford to lose infinite amounts with their interest free loans from the partners in high places.
Luck is a big factor in results. The skill stays constant (except for the other team keying in on it) but the results are random. The Knicks were guaranteed to lose 10 in a row after Smith, one of the worst eyes in the league won 2 games with non-percentage threes and became their go to man. After a run of success in performance, do expect the subsequent performance not only to revert back to the mean but to go below as the other team plays harder. After a streak of wins in a row, a team is likely to start losing. The Knicks won their first 10 home games, and then lost 3 in a row as they got over confident and got off to down 25 points in the first half in a few games because they weren't hungry enough. After 6 up days in a row in spu's the expectation is for -0.5% the next day.
A team that relies on one player to make it for all is likely to lose. Melo made 30 points 5 or 6 games in a row and the Knicks were able to pull off some lucky wins as a consequence. But as Deng said, "Melo's one of the toughest scorers in the NBA. The shots that he makes are the shots that you want the other team to take but those are shots he makes … Carmelo is the ultimate scorer" the coach Thibodeau said. Note how they encourage the opposing team to continue in their guaranteed to losing ways. The market always leaves enough on the table for the public to lose more, and encourages them to keep in the game until the huge killing day when it gets them all out like the day before Christmas in stocks when it's ready to turn.
It's not the trades its the system. Antoni making his team lose wherever he goes as he tries to force the system on his players and smiles complacently on the sidelines as if it's his players fault rather than his. The market player trying to take out a 1/2 point in 30 minutes because they have to go to work or take care of the business or kid, with a real vig of some 50%.
A one horse team is likely to lose as Kobe and Anthony show. If all markets are going down and one or two are going up, trouble is in the air. Slow and steady wins the race. The thunder make all their recruits become part of the community and memorial before they play. No night life but respect for everyone is their key. They got rid of the bearded high falutin player who wanted too much money for their low media community and have the best record now. The market that goes up with a little volatility is a better reward to risk than the highly volatile high profile one.
Okay. Considering I don't know anything about basketball as my uncle Howie likes to remind me (" you said it "), what should I have said or what biggies have I missed. In my defense the same things are true in racket sports which I do know about and how loathsome it is to see the three worst sports in the game now held in such veneration. Time heals all wounds and in 10 years, I can be expected to receive many "legendary" awards in my field (albeit I was never a bad sport I think).
Anatoly Veltman writes:
There was a lot in there. But I'm wondering about just one thing: "getting them all out" Xmas…And the reason I'm wondering is that the current actions are "getting them all in"; while the well-forgotten idea was to be getting out on approach to records, once all of the election props go used up. So there goes public again…
"Uncle" Howie Eisenberg writes in:
Your analogies to the market may be right-on but once again you demonstrate your proclivity for creation of "facts" to support your premises. J.R. Smith's career and 2012/2013 3-point percentage are .368 and .346, respectively. Using the latter, his expected value on a 3-point attempt is .346 X 3 = 1.04 which is equivalent to better than 50% shooting from 2-point range (expected value = 1), a very good percentage. Thus having Smith shoot 3-pointers is not a bad gambit. Of course it would be a lot better for Novak, # 4 in the league in 3 -point percentage to be shooting more of those 3s.
There have been many winning teams that relied on 1 player for the bulk of their offense, e.g., Minneapolis Lakers: Mikan, Phila Warriors:Chamberlain, UCLA: Alcindor. Of course it's best when there are several major options. In the NBA these days, winners usually have 2 superstars. The Lakers have 3, plus Pau Gasol, the acquisition of whom led to the Lakers getting to 3 NBA finals in a row, winning 2. That leads to your point about D'Antoni.
I readily acknowledge that whether it's because of players not getting back for fast breaks off failed 3s as you quoted Felton, or other inadequacies of his coaching, there is no "D" in Antoni despite the correct spelling of his name. You are absolutely correct in noting that D'Antoni is insistent on his teams playing his style no matter what the particular makeup of the team is. Yes, the current Lakers don't fit with the type of running game he espouses. Not only does he not maximize the potential production of each player's talents like Gasol's greatness in the post and superior passing ability, but he insists on using novices with limited ability like Darius Morris because he's fast and leaving 14 year veteran, Jameson, who has a career average of 18+ points a game on the bench. Jim Buss should have listened to your warning when he bypassed the greatest coach or manager who ever lived to save a mere 16 million dollars over 2 years. D'Antoni is the greatest disaster to befall LA since the Northridge earthquake and may even rival LA falling into the sea in Superman I. Christopher Reeves is no longer here to save us and although Jeanie Buss just received a ring from Phil Jackson, unfortunately the Lakers cannot expect a similar gift resultant from Phil's genius. He may be marrying Jim Buss's sister but Jackson is now forever estranged from the Lakers because of Buss's stupidity. Woe is us!
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