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By Gemma JoyceAug 21
Published July 8th 2014
Goldman Sachs, the multi-national investment bank, are in the business of futures. The ability to quantitively predict the future, be it long-term or mere micro-seconds ahead, is how they make their money.
They are Futurists.
Not the fun, fluffy sci-fi type of futurism nerds enjoy so much, but a hard-cash, risk and return type of futurism. The type that can collapse a national economy.
Billions of dollars ride on their ability to see ahead with a lower margin of error than their competition.
So why they would try and predict the FIFA World Cup is anyone’s guess?
I can only assume it’s some old timer’s “funky friday” project, sweetly tolerated to keep him from going a bit Wolf of Wall Street. But attempt to predict the World Cup they have, and they’ve done rather well so far too.
Football (or “soccer” to our US friends, who already have a game called “football” which, to my inexpert eyes, seems to involve an awful lot of hands and other body parts too) is a low scoring game.
This is partly what makes it such an exciting sport to follow. The amount of chance that has a bearing on an outcome results in a great degree of drama.
If the goal tally were high, any score would be more representative of a team’s merits, as it would quickly average out. But with low scores it’s not always the best team that wins. Which, of course, makes the sport inherently socialist according to Ann Coulter.
So predicting the outcome of a football game, unlike “easy” stuff like an election or the stock market, is notoriously difficult.
But still, on aggregate, there is a calculable possibility of success. This is what the Goldman Sachs’ analysis was based on – a pure stat approach, predicting each fixture by looking at the history of games between the two countries since 1960, weighted on home advantage and recent performance.
Their model predicted Brazil v Germany and Argentina v Spain for this weeks semi finals. Of which only Spain was wrong.
Spain were the top seeded team and current holders, but went out early in the competition to the surprise of everyone, not just the investment bankers.
The model is confidently predicting a Brazilian win in the final.
“The most striking aspect of our model is how heavily it favours Brazil … our probability for an overall Brazil win is almost 50%, versus 25% for Ladbrokes bookmakers.”
But a single lucky goal for the Germans tonight, or either Argentina or the Netherlands if they were to get through to Sunday’s final, could put a stop to some banker smugness pretty quickly.
This is what will have me watching tonight.
Follow the World Cup teams “social performance” with Brandwatch’s World Cup Data Dashboard.