The betting line in Super Bowl XLVIII gives the Denver Broncos a slight edge over the Seattle Seahawks. Looking at the betting line before the season began offers some key insights to investing. CBS Sports writer Will Brinson wrote about the Las Vegas odds of winning the Super Bowl as the season began on Sept. 3, 2013.
According to Bovada.lv, the four teams with the highest odds of winning the Super Bowl were:
- Denver Broncos 6-1
- San Francisco 49ers 6-1
- Seattle Seahawks 17-2
- New England Patriots 10-1
These were indeed the very four teams that played for the conference championships and the right to play in the Super Bowl. Brinson told me “an all-chalk Final Four is extremely rare in the NFL.”
Here are three insights on all the NFL oddsmaking that you can apply to your investing.
1. Growth stocks pay the least. If Denver wins, the bettor gets back $6 for every $1 wagered. Brinson picked Carolina as his sleeper, which would have paid $66 for every $1 wagered. Carolina won its division but lost to the 49ers in the playoffs. The lesson? Apple, Google and Facebook are rapidly growing companies, and this is already priced into the market much the same way favorite teams are priced with lower payouts.
Predictions can be spun to show the illusion of
skill. It seems extraordinary that all
four of the highest rated teams made it to the championships, doesn't it? Dig a little deeper, however, and you will find that of the 32 teams, the experts only explained about 21 percent of the win-loss records. In fact, taking out the four highest-ranked teams reveals there was no predictive power at all. By focusing on the winners and leaving out the losers, investment gurus love to spin their predictions
to create the illusion of skill, but that's all it is -- an illusion.
Though it's not nearly as much fun, when it comes to investing I "own every team" on the planet via a low-cost index fund. When investors flee the stock market, I buy. I work hard for my money, and I’m not about to pay Wall Street a penny more than I have to in order to be in the game.
So who will win Super Bowl XLVIII? That’s easy – there is no doubt that Peyton Manning
will lead the Broncos to victory. Sure, my opinion might be emotionally based on the fact that I live in
Colorado and am a long-time Broncos fan, but Will Brinson is also picking the Broncos.