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World Cup Prediction Failures

timothy posted more than 4 years ago | from the goal-oops-I-mean-nope dept.

Math 312

pdcull writes "We all read on Slashdot about the investment banks using their massive computer power and clever modeling techniques to predict the FIFA World Cup outcome. Now that Goldman Sachs's, UBS's and Danske Bank's favorite, Brazil, has been eliminated, and with JP Morgan's England long gone, the question that begs to be asked is: can we really trust these guys to predict the financial markets any better than they did World Cup?"

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We have to! (4, Interesting)

DWMorse (1816016) | more than 4 years ago | (#32788762)

We just bailed out the banks, so it's too late to start throwing in votes of no confidence!

Re:We have to! (5, Insightful)

NFN_NLN (633283) | more than 4 years ago | (#32788820)

"Goldman has published an exhaustive list of defences against the allegations that it acted illegally when it allowed hedge fund Paulson & Co to choose some of the sub-prime backed securities to be included in a product it sold to investors even though it knew the hedge fund was betting against them."

The financial giants don't predict the markets, they make them.

A better analogy would be if Goldman Sachs was allowed to pick the players for each team, and put all the worst players into Brazil. Then sell all their customers bets for Brazil to win while simultaneously betting against them.

Re:We have to! (1, Offtopic)

blind biker (1066130) | more than 4 years ago | (#32788994)

A better analogy would be if Goldman Sachs was allowed to pick the players for each team, and put all the worst players into Brazil. Then sell all their customers bets for Brazil to win while simultaneously betting against them.

Oh yeah, t hanks for reminding me: is anyone in GS going to federal pund-in-the-ass prison for that? The Gulf of Mexico oil spill (courtesy of BP) diverted the people's (including mine) attention from the GS crooks.

Re:We have to! (4, Informative)

malkir (1031750) | more than 4 years ago | (#32789452)

The owner of BP is part of GS.

Re:We have to! (2, Insightful)

Anonymous Coward | more than 4 years ago | (#32789072)

No, that is a terrible analogy. A better one:

Customer A comes to GS and says we have views on these pool of players, help us implement that view. Goldman tells Customer B they are interested in structuring a bet (that by necessity, must have another side) with the same pool. Customer B picks the players it likes, based on its own analysis and expertise. Customer A accepts the new list of players. Customer B is initially very happy, but soon the players, for which no entity involved has any influence, start performing poorly. Customer A loses. Customer B wins. Goldman, having retained some of Customer A's stake for itself, loses, but recoups a portion of the loss through fees earned by structuring the deal.

I don't get it. (0)

Anonymous Coward | more than 4 years ago | (#32789230)

Can you put this in car terms?

Re:We have to! (5, Funny)

ObsessiveMathsFreak (773371) | more than 4 years ago | (#32789612)

Too complicated. The best analogy is simply to say that GS, etc al are filled with shallow crooks who can and will trick and con everyone they meet out of every cent they have.

Re:We have to! (4, Insightful)

NotQuiteReal (608241) | more than 4 years ago | (#32789144)

The financial giants don't predict the markets, they make them

Obviously reality still has some bearing on things.

Re:We have to! (1)

sortius_nod (1080919) | more than 4 years ago | (#32789208)

Who's reality though?

Re:We have to! (1)

BluBrick (1924) | more than 4 years ago | (#32789376)

I'm reality - And so is my wife!

Re:We have to! (2, Interesting)

apoc.famine (621563) | more than 4 years ago | (#32789534)

Everyone. Every mistake, every poor choice. Just like "The Hand of God", and Germany's "notched goal line", the drunken trader [msn.com] who improperly traded seven million barrels of oil while hammered out of his gourd is reality.

Predict all you want - you can have the best algorithms and the best data, but human fuckups will ruin those every time. Maybe, if all trades were designed and executed by computers, with no human involvement, you could predict those things. But as long as someone is required to spot someone 3 yards offside, or someone is allowed to trade millions of shares with his right hand with a scotch in his left, you're going to be unable to predict either a World Cup or a financial market.

Humans are ridiculously chaotic and unreliable, despite how advanced we think we are.

Re:We have to! (1)

NoseSocks (662467) | more than 4 years ago | (#32789466)

I drew the same conclusion. The quants deal with markets in which their decisions can change the landscape of the playing field. In predicting winners of sports games, they have no such influence. It's not an apples to apples comparison. I like your analogy!

Re:We have to! (0)

Anonymous Coward | more than 4 years ago | (#32789494)

A better analogy would be if Goldman Sachs was allowed to pick the players for each team, and put all the worst players into Brazil.

They do not need that as long as Dunga gets to pick the players and tactics for the Brazilian national team.

Re:We have to! (1)

ta bu shi da yu (687699) | more than 4 years ago | (#32789082)

That's an "investiment bank" to you, sonny.

Re:We have to! (2, Insightful)

moosesocks (264553) | more than 4 years ago | (#32789370)

We just bailed out the banks, so it's too late to start throwing in votes of no confidence!

Uhm. No. That isn't an either/or. They got bailed out to avert a total economic collapse -- not as a vote of confidence. If anything, the bailout was a symbol that the banks fucked up -- badly.

On the other hand, the bailout should have had a few more strings attached to it, and we desperately need for meaningful financial reform to be passed. Unfortunately, because Obama fought for it, the Republicans are against it, and it's unlikely that the currently proposed reforms will have the "teeth" necessary to prevent the banks from going crazy again.

(Also, very few of the banks were actually "bailed out." Most were provided with a government-backed high-interest loan that they had to pay back, which many already have)

Re:We have to! (5, Interesting)

JackieBrown (987087) | more than 4 years ago | (#32789394)

(Also, very few of the banks were actually "bailed out." Most were provided with a government-backed high-interest loan that they had to pay back, which many already have)

And not all of the banks wanted the loans but the government pushed it on more banks than were necessary so that the consumers would not know which banks were in need of a "bail-out." The government was worried that if we knew which banks were in need of help, we would all leave those badly run banks in favor of the banks that handled our money responsibly.

In Texas, that is actually a selling point in a number of local bank commercials "And you can rest assured that we did not accepted any government bail out money. Our customer's investments were always secure."

No. (2, Insightful)

morari (1080535) | more than 4 years ago | (#32788764)

The answer to a question.

Re:No. (5, Interesting)

mobby_6kl (668092) | more than 4 years ago | (#32789052)

"No" is not the answer, Paul is. He correctly predicted the outcome of all of Germany's games so far, whichi is pretty impressive, considering Germany's loss to Serbia.

Of course, Paul is an octopus [spiegel.de] who picks the winning side by choosing the box with the winning side's flag on it.

Re:No. (0)

Anonymous Coward | more than 4 years ago | (#32789134)

It's all in the FUCKING punctuation. These asshats are using supercomputers based on human-written algorithms.

FUCK no, they can't predict anything nearly as complex as the stock market, lest of all a game of balls and yellow cards.

Anyone who invests with the herd these days is a gambling fool.

Re:No. (1)

The Mighty Buzzard (878441) | more than 4 years ago | (#32789536)

Seriously, who the hell takes gambling (which is what investing in stocks is) and decides it should be a sure thing and they should never be able to lose money?

Don't call me shirley .. (5, Insightful)

Idimmu Xul (204345) | more than 4 years ago | (#32788768)

Surely the last couple of years are evidence enough that the financial industry can't predict or manage the markets? We didn't need football to tell us this :D

Re:Don't call me shirley .. (3, Insightful)

mortonda (5175) | more than 4 years ago | (#32789156)

Not to mention, how could *anyone* predict anything with as many bad calls as the refs have been making all the time??

Re:Don't call me shirley .. (5, Funny)

Anonymous Coward | more than 4 years ago | (#32789460)

It's easy. You just have to pay off the refs.

Re:Don't call me shirley .. (1)

sconeu (64226) | more than 4 years ago | (#32789462)

Did anyone ever figure out what the foul was that disallowed the goal at the end of the USA-Algeria match?

Re:Don't call me shirley .. (1)

religious freak (1005821) | more than 4 years ago | (#32789458)

Those of us in the USA didn't need soccer either!!

Investiment bank? (3, Funny)

Improv (2467) | more than 4 years ago | (#32788776)

What's an investiment bank?! I don't trust any large institution that can't spell worth beans.

Re:Investiment bank? (3, Insightful)

causality (777677) | more than 4 years ago | (#32789014)

What's an investiment bank?! I don't trust any large institution that can't spell worth beans.

Slashdot "editors" are not large institutions. They are individuals ultimately responsible for failing to perform the most basic quality checks for submissions, like this mistake that an automated spell-checker would have fixed. Really, even basic proofreading would not have been necessary in this case.

If the "editors" did their jobs in a relatively consistent manner I'd consider purchasing a paid subscription. As it stands, I don't get to be lazy at my job and therefore it would be unjust to reward the way they do theirs. Anyone remember the recent article about Plato in which an "editor" inserted a blatantly false and readily falsified statement about Aristotle? This is not exactly obscure material that would be difficult to verify.

In this job market where multitudes are desperately seeking work, I am sure there are many who would be happy to do better than the current staff.

For those who have no real concern for quality, my response is this: it's not that a spelling error is so terrible or offensive. It isn't. It's that it shows that they don't care. If they don't care enough to correct errors when the effort to do so approaches zero, why should I care? If I have no reason to care, why should I pay money?

I suppose it sounds like I am picking on Slashdot specifically. Really, they are just reflecting what has become a societal norm. That norm is the abandonment of "this is my craft, the satisfaction I get out of it is proportional to what I am willing to put into it, the quality of it matters to me even when no one is looking." That norm is the embracing of "it doesn't matter if I produce substandard and shoddy work as long as someone is willing to consume it."

Re:Investiment bank? (1)

Ethanol-fueled (1125189) | more than 4 years ago | (#32789464)

But if you buy a subscription, then you get to preemptively compile first-post trolls [slashdot.org] which are actually relevant to the article and kick off massive flamewars.

But purchase with care: Recently it seems that the Nazis have been aggresively banning my own and other troll i.p.'s.

Wait. (5, Insightful)

esrobinson (1028500) | more than 4 years ago | (#32788778)

Your question is, "Hey, these guys who spend their entire lives predicting financial markets aren't good at predicting sports. How can we trust them to predict financial markets?"

Re:Wait. (1)

noidentity (188756) | more than 4 years ago | (#32788836)

Shhhh, don't upset the tenuous logic that he offers as justification for his dislike of banks.

Re:Wait. (0)

jedidiah (1196) | more than 4 years ago | (#32788954)

Handicapping is handicapping.

It doesn't matter if it's an energy company or a basketball team.

It's not like they're any more clued in about some random industry or running any real business (even a kwik-e-mart).

At least a Football Tournament is a much smaller and more well mannered set of conditions.

Re:Wait. (1)

bloodhawk (813939) | more than 4 years ago | (#32789284)

They are not even remotely similar. Especially in a sport with limited to no second chances and where bad luck or bad decisions can easily allow the better team to lose or the team may just have an off day. Look at the brazil netherlands game for instance, Brazil completely and utterly dominated and out played them in the first half and did well the second half too, they could have easily been up 3-0 by half time, but they weren't and 2 mistakes in the second half were there downfall.

Re:Wait. (0)

Anonymous Coward | more than 4 years ago | (#32789504)

Their ball is over there.

Idiot.

Re:Wait. (1)

masmullin (1479239) | more than 4 years ago | (#32789558)

Actually, the Dutch are a better team this year. They simply had a bad first half, but showed they were obviously better in the second half.

If you watched the group stage, Brazil wasn't that impressive.

But yeah, we get your point.

Re:Wait. (5, Funny)

SpeedyDX (1014595) | more than 4 years ago | (#32788846)

All-star baseball player struggles at figure skating - clearly shows all-star game votes don't reflect players' abilities!
Grammy award winning singer can't perform simple clown juggling routine - they hand out Grammys to anyone these days!
Nobel prize winning chemist's sculpture harshly criticized by art critics - all previous research papers under scrutiny!

Re:Wait. (5, Insightful)

martin-boundary (547041) | more than 4 years ago | (#32788868)

Exactly, if they don't realize the inherent limitations of their methods to finance only, how can they be trusted to be masters of that method at all?

It's like if you think pounding screws with a hammer is a good idea, then I have to wonder if you even know how to hammer in nails properly.

Re:Wait. (1)

smart_ass (322852) | more than 4 years ago | (#32789510)

I would have agreed with you until I saw it done. Some screws go in remarkably well with a hammer ... depends on the pitch. Agreed you need the screwdriver to remove, but some go in very well with a hammer.

Suggests that assuming difference on surface = difference to all underlying principles is perhaps a bad assumption.

Re:Wait. (1)

bjohnson (3225) | more than 4 years ago | (#32789528)

Well, actually the current state of the economy is proof enough that "these guys who spend their entire lives predicting financial markets" aren't god at predicting financial markets.

Who the hell would believe these guys could predict soccer?

Re:Wait. (0)

Anonymous Coward | more than 4 years ago | (#32789598)

Never mind that they don't even claim to predict financial markets. They analyze risk, and determine the most profitable course on the so-called risk basis.

No. (1)

feepness (543479) | more than 4 years ago | (#32788784)

So stop. And stop voting for the people that do as well.

Re:No. (4, Interesting)

causality (777677) | more than 4 years ago | (#32789042)

So stop. And stop voting for the people that do as well.

There is no chance of that happening in the USA as long as the two major parties are the gatekeepers of federal elections. The "lesser of two evils" is still evil, and election after election of some kind of evil adds up to a lot of institutionalized evil.

Look at the numbers first (5, Informative)

Flavio (12072) | more than 4 years ago | (#32788788)

Goldman Sachs gave Brazil (the "favorite") only a 13% chance of winning the world cup.

The fact that Brazil was eliminated is not at odds with the reports.

Re:Look at the numbers first (5, Funny)

Anonymous Coward | more than 4 years ago | (#32788904)

Goldman Sachs gave Brazil (the "favorite") only a 13% chance of winning the world cup.

The fact that Brazil was eliminated is not at odds with the reports.

Way to ruin my self-righteous rage with your little 'facts' It makes me feel better to lay other people low when times are tough. The people need a safe outlet for their anger, and some remote math geeks should have been fair game. Then you come along and tell me their predictions were soundly made..? So, now I must recollect all that anger and direct it at my wife and children. I am the victim here. Why aren't you defending me?

Re:Look at the numbers first (2, Insightful)

causality (777677) | more than 4 years ago | (#32789092)

I know you were saying that tongue-in-cheek but you raised a good point. I thought I'd mention that since this is Slashdot after all, where finding something worthy in a humorous post makes people feel entitled to assume you didn't understand the humor...

The people need a safe outlet for their anger, and some remote math geeks should have been fair game.

I thought that's what national sports were for, not math geeks. It's the good old-fashioned "bread and circus" routine, used by generation after generation of rulers since ancient times for the simple reason that it works. Sports primarily appeal to men, providing a "safe" (for whom?) outlet for male aggression specifically, the sort that might otherwise get fed up with getting lied to and shafted every day by business and politics. Thanks to sports and mass media, millions of men can shout, scream, jump up and down, and get upset about something that really doesn't matter one way or the other, like which group of strangers who are overpaid athletes can most efficiently move a ball.

It's not The People, as in We The People, who need this outlet.

Re:Look at the numbers first (4, Interesting)

Kjella (173770) | more than 4 years ago | (#32789250)

Goldman Sachs gave Brazil (the "favorite") only a 13% chance of winning the world cup.

It's been clear to me now for some time that soccer isn't about making the best team win. If a typical match result was like 9-4 it's very unlikely the weaker team would beat the stronger, and we could have done that by making scoring easier. But with results like 2-1 it's pretty much down to $random circumstance of the day. Why? Because in 80% of the matches it makes fans go "If only..." then our team would have won. You look at the one missed chance and ignore that the opponent had three. At 13% you realize this is mostly luck, it means there's at least ten countries that could win.

Personally I think Germany will pull it off though, impressive play and all their hardest competitors eliminated. Spain has Barcelona which is possibly the world's best team but their national team never quite made it, Netherlands and Uruguay have always been good nations but haven't made it to the top in ages. Because when you look at the list of winners, it's shorter than you might think and Germany is the only one left that has won in recent history (Uruguay won in 1930 and 1950).

Re:Look at the numbers first (1)

moosesocks (264553) | more than 4 years ago | (#32789392)

In other words, they predicted that the results would be random and hard to predict.

By itself, that statement is bullshit, and means nothing. On the other hand, amongst a sea of outlandishly incorrect predictions from a variety of respected individuals and firms, Goldman may have been onto something.

This is actually a useful result to have. Unfortunately, I don't think we're likely to hear Goldman say anytime soon that "The markets are volatile and chaotic, and we can't predict them right now. Better hold off a few months on investing that money you have"

Re:Look at the numbers first (1)

Lars512 (957723) | more than 4 years ago | (#32789530)

Goldman Sachs gave Brazil (the "favorite") only a 13% chance of winning the world cup.

The fact that Brazil was eliminated is not at odds with the reports.

Exactly. The editorial comment has the misconception that this form of betting aims to find the winner.

Instead, they are looking for models which better predict to the "true" likelihood of any team winning. These models output a series of probabilities, and the amount of money you can make depends on the disparity between this distribution and that predicted by the current betting odds. You place a family of bets which target this disparity proportionally, and then after a sufficient number of events you'll make money reliably.

If other people start predicing the odds more accurately, you'll find that the disparity between betting odds and your model will narrow, and there'll be less opportunity for you to make money. There are a lot of people doing this sort of thing professionally, since sports betting is supposedly a less efficient market than share trading.

Upgrade (4, Funny)

therealobsideus (1610557) | more than 4 years ago | (#32788790)

Guess it's time to upgrade their magic ball software. This time maybe they shouldn't outsource the project to Mattel.

Re:Upgrade (1, Interesting)

Anonymous Coward | more than 4 years ago | (#32788974)

use this design [electru.de]

Re:Upgrade (0)

Anonymous Coward | more than 4 years ago | (#32788976)

They should upgrade to cephalopods [youtube.com] , obviously.

hmm amaterism (2, Interesting)

cruonit (1701574) | more than 4 years ago | (#32788818)

the problem is they didn't used enought feature factors or the relevant ones (like detailed statgistics for every player, for that player with coop with another player). i didn't read the stuff but i am sure they used only few factors mostly historic data the detailed forcast would cost too much money (but they invest them into stock forecast)

Best prediction so far: (2, Interesting)

Anonymous Coward | more than 4 years ago | (#32788822)

That squid or octopus or kraken Paul [bbc.co.uk] which consistently picked the "German" mussel.

Re:Best prediction so far: (0)

Anonymous Coward | more than 4 years ago | (#32788912)

Also, AC, squid is not the preferred nomenclature. Cephalopod, please.

Say... (2, Funny)

muckracer (1204794) | more than 4 years ago | (#32788832)

Is this a trick question??

Same old slashdot (0)

Anonymous Coward | more than 4 years ago | (#32788840)

can we really trust these guys to predict the financial markets any better than they did World Cup?

You have that backwards.

No. (0, Redundant)

Alcoholist (160427) | more than 4 years ago | (#32788858)

And the sooner the world figures this out the better we'll all be.

Of course not (2, Funny)

oldhack (1037484) | more than 4 years ago | (#32788870)

Games are decided by refereeing as much as anything. Did they throw that into the model?

FIFA make UN look like a girlscout.

Money (0)

Anonymous Coward | more than 4 years ago | (#32788876)

They may not predict the exact outcome, but I bet they come close enough to make money on a series of hedged bets.

What about me ? (1, Interesting)

zero.kalvin (1231372) | more than 4 years ago | (#32788878)

I predicted 3 of the 4 teams in the semi-finals. And I am not claiming any special powers here. But this does raise two issues. If these banks actually were that serious with the prediction: Either they are insane to actually try to predict the outcome using models and techniques that are used for finance, which raises the question of how fit they are to think they can predict the markets themselves if they think they have a "pass-partous" models. And if did they take into account every variable in the prediction, with such a poor predictions I can safely say they cannot be trusted with the financial future of a kid's lemonade stand.

Re:What about me ? (1, Interesting)

Anonymous Coward | more than 4 years ago | (#32789354)

You're being silly here.

You're saying because they used financial methods to figure out something that isn't financial, it makes them or their models something we cannot trust.

This is like saying, "Oh daaaam, the chemistry phd tried using chemistry to make himself a meal. The meal tasted like *shit* so his chemistry must be terrible too!"

The problem here isn't that the banks are bad at modeling. The problem is that sports, and anything requiring *small* numbers of people, is hard to predict due to individual differences, wind, vuvuzela interference, etc. If each team had instead had a million people each, statistical modeling would have been far more accurate.

Well, since soccer and finance are so similar... (1)

R2.0 (532027) | more than 4 years ago | (#32788882)

Let's just ask the octopus how to invest.

prediction? (5, Interesting)

chichilalescu (1647065) | more than 4 years ago | (#32788886)

I thought the point of the stock market was that people with money can buy shares into companies they think will be profitable. i pitty these idiots who try all their best to get as rich as possible as fast as possible. and I pitty the rest of the world, who see clearly that these guys treat everything like a lottery, and still trust them.

Re:prediction? (1)

Kjella (173770) | more than 4 years ago | (#32789386)

I thought the point of the stock market was that people with money can buy shares into companies they think will be profitable. i pitty these idiots who try all their best to get as rich as possible as fast as possible. and I pitty the rest of the world, who see clearly that these guys treat everything like a lottery, and still trust them.

They operate under uncertainty of the future, which I think most of us do. You probably have different scenarios, some positive like getting a promotion or payraise, some neutral, some negative like a pay cut or getting laid off. Adjust as required if you're already unemployed. Depending on which you think is more likely, you probably have different strategies. For example, if you think you may be laid off you may be hedging trying to find a more secure job. If you're looking good, you might want to take the opportunity of a cheap foreclosure. If you're unemployed, you can do something alternative like invest in more education. Unless you're clairvoyant you're probably looking at a mixed strategy trying to account for all outcomes relative to their likelihood.

That's what they do too, on the macro level. Where's the economy going, and what investments stand to profit from that. Why do you have so much against getting value for the money? If I'm paying out of my salary, you bet I won't be pissing away money. If I'm running a company, I won't be pissing away money. And so if I have money to invest, why would I be pissing them away on companies that don't give any return? No, I'd want to model what's worth investing in and screw the rest. I know many that check out auction sites, sales and whatnot looking for a good buy. Why not a stock that's undervalued? The people I pity are those that don't understand risk, if you don't want risk keep the money in the bank. You can't just think that stocks will double your returns risk-free, it's just not how it works...

Re:prediction? (1)

Attila Dimedici (1036002) | more than 4 years ago | (#32789446)

Actually you have hit the problem with current markets on the head, most people (especially at the big financial companies) are gambling. Stock investing is always a gamble, but it has become more so lately (the problem I am talking about really started becoming a major factor in the 80s). Ideally if you invest in a company you should be expecting to get a share of the profits through dividends. Today most people are expecting to profit by selling the stocks for more than they paid for them even though they never get a cut of the profits (Apple for example). Unless you are buying enough stock so that you can affect the composition of the Board of Directors, most of the time you shouldn't buy stocks in a company that doesn't pay a dividend.

The world is still interesting (4, Interesting)

RichMan (8097) | more than 4 years ago | (#32788888)

The predictions by various teams would have had a chance of happening.
Like Argentina will beat Germany 67% of the time. There is still the possibility that Germany will win a game.
One thing that makes the world cup very unpredictable is that only a single game decides winner/loser. Anything can happen in a single game. Someone can be a little off. The ball can bounce just so. A ref can blow a call. If they played best of 5 or 7 games the predictions would have a better chance of happening.

Still we can't predict the future 100% and the world is still interesting.

To the stock market. There are to many outside influences.
Could anyone have predicted the well blow out in the Gulf and its affect on the Gulf fishing industry or 911 ? Sure they would have been outside possibilities but no one could have predicted exactly when based on just looking at the stock market.
As much as the economists like to assume that economics is a measurable science the ideas of perfect knowledge and perfect actors are laughable given the way we know people operate. The basic foundation of the economic theory is very broken.

Re:The world is still interesting (2, Informative)

Myji Humoz (1535565) | more than 4 years ago | (#32788992)

The foundation of economics is the same as the foundation of statistics. No economist can accurately predict how an individual game can turn out, just like no economist can accurately predict how an individual actor will choose. However, the law of large numbers means that given a sufficiently large population, mass scale behavior can be predicted. A simple example of this in action is that if I flip a coin and call it heads or tails, I'll be wrong roughly 50% of the time. However, if I say that 50% give or take 5% of a thousand coin flips will end up heads or tails, I'd probably be right.

Economics does not rely on perfect knowledge and perfect actors. It relies on modeling the real world as best as possible, and you know what? Models usually include abstract representations, and abstract representations include idealized actions.

With regard to the story, it's laughable to think that financial market predictions are anything like sports predictions. These teams are made up of players who don't play together during regular seasons; they're generally on different teams in Europe. How is it news that analyzing various productivity and growth forecasting statistics will fail to predict who wins a 1-0 soccer game?

Re:The world is still interesting (1)

This is outrageous! (745631) | more than 4 years ago | (#32789194)

However, if I say that 50% give or take 5% of a thousand coin flips will end up heads or tails, I'd probably be right.

Wrong (it's 100%). However, if I say that 50% give or take 5% of a thousand coin flips will end up heads or if I say that 50% give or take 5% of a thousand coin flips will end up tails, I'd probably be right.

Re:The world is still interesting (4, Insightful)

plopez (54068) | more than 4 years ago | (#32789348)

Economics taking a statistical approach often assumes that in the long run you have a stationary time series. This is why economics and the quants will fail miserably. There is no understanding, or desire to understand, the fundamental foundations of the economic activity. If you take a statisticl approach you have nothing like what Newton, Gallileo and a host of others gave to physics or chemistry. All you can say is, "If the past resembles the future then there is an x probability that y will happen." As opposed to saying given the following forces, then the system will behave a certain way. Non-linearity is another question, but if you do not attempt you understand basic forces then failure is likely even without non-linearity.

For economics to be a science there also must be a way to test hypotheses. To date I haven't seen anything like this. So at best economics is wishful thinking, IMO.

Re:The world is still interesting (1)

j. andrew rogers (774820) | more than 4 years ago | (#32789328)

As much as the economists like to assume that economics is a measurable science the ideas of perfect knowledge and perfect actors are laughable given the way we know people operate. The basic foundation of the economic theory is very broken.

All this really proves is that you do not understand neither theoretical economics nor the mathematics of prediction. It doesn't work the way you are assuming it works nor do economists make the assumptions you are assuming they make. They might make these assumptions to simplify it for a layperson like yourself but that is only because the real mathematics is neither easy nor intuitive for someone that does not care to spend the time to develop expertise. Popular science books are remarkably devoid of meaningful mathematics too.

I always marvel that people who will complain that the ill-educated masses reason their way to grotesquely inaccurate conclusions based on their limited "common sense" understanding of things like evolution and climate change do not see the problem with loudly exhibiting the same behavior on topics like economics or some other pet bogeyman they don't understand. This is no less provincial than being a creationist, though perhaps more socially acceptable.

Re:The world is still interesting (0)

Anonymous Coward | more than 4 years ago | (#32789366)

well said, if I had mod points I would mod you up. The juvenile responses and lack of understanding in these forums is always at it worst on topics like this. I am not an economist, but I have enough of a background to cringe at the idiots posting absolute garbage, and even worse being modded up for it.

If you can't distinguish between an estimate... (1)

John Hasler (414242) | more than 4 years ago | (#32788916)

...of the probability of an event and a firm prediction you might be better off keeping your money in your mattress. Let's see how they do on average over the next hundred or so World Cups.

But then, "predicting financial markets" is not what I use banks for anyway. YMMV.

Footy tipping (2, Interesting)

MichaelSmith (789609) | more than 4 years ago | (#32788920)

...lots of people do it in Australia, especially in work places. Maybe you get a small prize if you guess best. Anyway one year we had this French manager who won the competition by a mile. All he had was a table of match results and a copy of excel. He was also the software metrics guru so knowing how to drive the spreadsheet helped as well.

I think the secret of his success was what he left out of his model. It wasn't smart at all. Just that when teams A and B play, what is the probability that A will win, or something simple like that.

Not as good as the (-1, Redundant)

Anonymous Coward | more than 4 years ago | (#32788922)

psychic octopus.

Trying to beat the market is BS (1)

jhylkema (545853) | more than 4 years ago | (#32788926)

Dartboard pics [studyfinance.com] outperform the "financial wizards."

Re:Trying to beat the market is BS (0)

Anonymous Coward | more than 4 years ago | (#32789422)

Thank goodness I upgraded my Adobe or you would have got me.. that PDF doesn't render

Troll summary (2, Insightful)

Krahar (1655029) | more than 4 years ago | (#32788934)

This makes no sense. They might have been completely right that some particular team was most likely to win, but then the randomness of the game made it so that the most likely winner didn't win. We have no way to tell. To evaluate their ability to predict correctly, you would need data for how well they did over the course of many world cups. Besides, they can't possibly do better than the quality of their data and the extent to which that data actually allows to predict the outcome. E.g. if they fail to predict the outcome of a game of stone-paper-scissors, that is hardly saying they aren't good at their jobs. This summary has nothing to do with science, it's a blatant troll.

Re:Troll summary (0)

Stumbles (602007) | more than 4 years ago | (#32789018)

If your suggesting their inability to predict the outcome because of some "randomness" then it stands to reason you are suggesting there is no randomness in the financial sector. Obviously that's a load a bull, else they would have predicted this last financial meltdown. I fail to see how you can possibly think they are good at their jobs unless "good at" is defined as making everyone else pay for their mishtakes.

Re:Troll summary (0)

Anonymous Coward | more than 4 years ago | (#32789302)

randomness in the financial industry for the "most" part is well defined and factored in as a risk to investment. Yes there are plenty of dodgy bastards in there too, but the market as a whole makes sense and while there is randomness in there you are only exposed to it as much as you let yourself (if you are doing your job properly).

Re:Troll summary (1)

Krahar (1655029) | more than 4 years ago | (#32789312)

If your suggesting their inability to predict the outcome because of some "randomness" then it stands to reason you are suggesting there is no randomness in the financial sector.

I have suggested no such thing, and neither have I stated any opinion on whether or not they are in fact good at predicting sports games or the economy. Good troll reply to a post about a troll summary. Your only mistake was the mishtake - made it too obvious.

Re:Troll summary (0)

Anonymous Coward | more than 4 years ago | (#32789588)

WTF is "stone" paper scissors? Jesus fucking christ its ROCK paper scissors.

Where are you from for god sakes... Argentina?

don't worry about the banks (0)

Anonymous Coward | more than 4 years ago | (#32788966)

They have a fail-safe system that is statistically guaranteed to create lots of wealth and keep the stock market booming. No taxpayer money is at risk, unless some incredibly improbable event occurs, such as Brazil, Argentina, and Italy all missing the semi-finals.

Re:don't worry about the banks (1)

Stumbles (602007) | more than 4 years ago | (#32789050)

They have a fail-safe system that is statistically guaranteed to create lots of wealth and keep the stock market booming. No taxpayer money is at risk, ...

What frigging planet have you been living on for the past 3 years? You do know our government use our tax dollars to bail out the financial sector.

Re:don't worry about the banks (0)

Anonymous Coward | more than 4 years ago | (#32789518)

You aren't very good with sarcasm, are you?

Re:don't worry about the banks (1)

masmullin (1479239) | more than 4 years ago | (#32789604)

OMG Italy missing out on the knock out round was so SWEEETTTT!...

I totally drove through little italy of my city honking my horn and flying a big non-italian flag screaming out "how do you mother fuckers like it now huh? Like it when people drive through your neighbourhoods acting like assholes and honking their carhorns... fuck you alll!!!!"

Ok, I didn't really, I had to work... but I daydreamed it.

Logic failures. (0)

Anonymous Coward | more than 4 years ago | (#32788970)

If some random schmuck on the street accurately predicted the four semifinalists does that mean we should trust him to predict the financial markets?

Predict This (0)

Anonymous Coward | more than 4 years ago | (#32788990)

I wonder how climate modelers would have gone?

Re:Predict This (1)

Stumbles (602007) | more than 4 years ago | (#32789036)

They would have predicted the Chicago Cubs.

They're called predictions, not guarentees (1)

bug_hunter (32923) | more than 4 years ago | (#32789002)

That's like saying the horse with the best odds didn't finish first, do the bookies really know what they're doing? There's these things called chance and statistics. Also it's not like Brazil did badly.
A friend and I wrote our own computer based predictor for FIFA, at last count it predicted 33 out of 58 games which I would say is pretty good given that games had 3 possible outcomes in earlier rounds: win/lose/draw (and yes we predicted Brazil I'm afraid).
If anyone's interested in a shameless plug here's our version for quite a few sports for the iPhone http://itunes.apple.com/au/app/sports-predictor/id340126905?mt=8# [apple.com] the model of a free download that gives you samples followed by purchases turned out to be extremely unpopular, but that's another discussion.

Huh? (1)

jd2112 (1535857) | more than 4 years ago | (#32789044)

Why should we trust them to predict the outcome of a sporting event when they have such a poor record predicting financial markets.

Dataset (1)

dontPanik (1296779) | more than 4 years ago | (#32789066)

Going back to the old story and looking at what data the companies used to predict the outcome, it doesn't surprise me it's inaccurate. They used:
  • Betting market data
  • Elo ratings
  • Salary data
  • Historical World Cup data
  • Socioeconomic data

While that's not a bad way to start, what seems to be more important is how well the team plays together and the chemistry and attitude of the team in general. As we saw with England (and France), you can put a bunch of great soccer players on one team, but that doesn't mean they're going to play well together.

Soccer is just unpredictable (1, Insightful)

Anonymous Coward | more than 4 years ago | (#32789164)

It's pointless to try to predict the outcome of a soccer match. It is known as the sport with the most upsets for one simple reason: luck plays far too big a role in a match's outcome. The winner of any game in any sport is determined by some mix of skill and random occurrence. I'm not saying that skill isn't important in soccer (and I'm certainly not saying that soccer players do not have skill) but the role that skill plays in the determining the winner is much less compared with other sports. Is this possibly one of the reasons soccer is only really popular with children in the US? I think it's a factor.

Hmm (4, Funny)

Quiet_Desperation (858215) | more than 4 years ago | (#32789178)

How good are they at climate prediction. I'm just wonderin'...

I have to disagree (1)

khallow (566160) | more than 4 years ago | (#32789252)

I think the winning conditions are inappropriate for this contest. It was set up so that you had to pick a team. There's no reason in a game as random as soccer to expect a particular team to have a high likelihood of winning. An appropriate guess would have been a statistical distribution with every team having some chance of winning. By playing the game, these financial teams were more likely than not to lose.

In other news (0)

Anonymous Coward | more than 4 years ago | (#32789272)

Today a lawyer failed to save a patient undergoing cardiovascular surgery.

Can we really expect him to persuade a jury his client is innocent?

What worries me more (1)

kid_wonder (21480) | more than 4 years ago | (#32789440)

is the fact that these guys might have actually thought they could predict Soccer games.

They can very easily "predict" market moves in very short time frames -- they have access to real time data as well as prices/sizes of tickets that are lying outside current bid/ask range.

Frankly anyone here could write a program to predict that a stock and, by doing this for multiple stocks, an index using this information to calculate momentum. Place a bet with enough money and you only need a small change so you can make your bet after the move has already begun.

These aren't really "predictions" but rather having enough information to make a bet with significantly less risk ... if there are a bunch of buyers and few sellers below you then you are protected on the downside and if there are bunch of buyers and few sellers above you then the stock is going to go up -- you just have to give it a little nudge.

A tribute to predictions and pundits (1)

ProfessionalHostage (1110801) | more than 4 years ago | (#32789442)

So much you can put into a prediction but it is still restricted to proxy stuff such as stature, how many players playing at "top level football", and managers. But still the ones who doing the real stuff on the pitch are human; 25 of them. It is impossible to de(rive|vise) a relatively accurate mathematical model(s) on what going to happen minute-by-minute.

Well that's why even the likes of Slovakia can roll over Italy, Holland to Brazil, South Korea to Italy, and every other underdogs trashing big-names games. With the insistence of FIFA towards, basically encouraging, drama is why the game is so damn addictive to many people.

Of course the drama is not all there is for football. On each game you can expect to see real skill from players of the big-names or inspiring determination from the underdogs. That's why if you value things such as skill, team work, determination (and other things that many people attribute to football) you are likely to fall in love with the game.

Sure the big-names got their reputation for good reasons, so there's a great chance that they will run all over the underdog, scoring at will, and being classy at the same time; well basically living up to their reputation.

Slightly off but related, in my opinion it is the likes of Fulham, Aston Villa, Everton, and Bolton Wanderers that kept BPL making money, the same with Catania, Cagliari, Napoli to Serie-A, and basically every other league with big-names and underdogs teams. It is the fans of those underdogs that willing to pay up a lot of money to see their beloved team to go against the big-names and hoping for some sort of reimbursement of local pride (or insert-your-favorite-reason-for-emotional-attachment here) being served by 11 men on the pitch. On the flip side the fans of big-names want a good time on the weekend seeing their favorite players trashing a no-body on the pitch so they reach their pocket too.

So what? This year your big-name team defeated by an underdogs? well there's always next years (or four years for WC). Even with those shocking results the fans still lining up in great expectation for the next season, with dreams of what to come with new players coming in from the transfer market or local talents "stepping up" to the game.

If the game can be predicted even with a-rather-good accuracy we'll see games "played" by analysts and numbers crunching experts instead of players running, wailing, **cough**diving**cough**, getting bruised, injured, fouled in the process. So much with nurturing talent, buying players, training, and prep-talk; just bribe some math-wizard to come up with smelly statistic to favor our team and call it a day.

Don't be fooled, all that prediction is going to pay for themselves anyway. Match-prediction pundits/"experts" are there to sell commercials and corporations prediction are to sell their products, as evident in this case.

Predicting every single game is a joke. Stop doing that and just enjoy what's on the pitch. Just like a respected manager (that I fond of) once said: "Football, bloody hell."

NO! (0)

Anonymous Coward | more than 4 years ago | (#32789478)

Like the World Cup, Climate, Weather, and one moment to the next for any human being, all are unpredictable!

The outcomes of our most fastest supercomputers are as unpredictable, irrespective of code or problem.

Yet, the U.S.A. Department of Energy "thinks" that the "quality" of our M88 warheads are still 100%.

For them, USA DoE, the fallicy might just save the rest ot us from a nuclear holocaust, since they, DoE are desperately holding onto their cherished religous beliefs against the bitter narled face of reality. If they were to realize that 90% of the nuclear aresnal has decayed to a non-nuclear state, they might be prone to lauch another failed war against some conutry of (roll the bones) choosing, just as Bust II.

not sure i'd call this a failure (1)

buddyglass (925859) | more than 4 years ago | (#32789522)

They probably picked Brazil to win, meaning they thought Brazil had the best chance. They would probably also admit that "the best chance" is still pretty small. So, the fact that their pick to win was eliminated really isn't a blemish on their prediction ability, given our sample size is "one".

A little too late to ask. (1)

jetole (1242490) | more than 4 years ago | (#32789606)

can we really trust these guys to predict the financial markets any better than they did World Cup?

You're asking if we can trust big banks to predict the financial markets when we are on the slow rebound from a crashed economy? I think you're a couple years too late asking this question and the answer is a clear "no"! No we can not.

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