World Cup: Confirmed Sharper Than The Market
On day 11, we started tracking sharpness metrics, and we are sharper than the overall market.
A bit of housekeeping before the picks, because something happened this week that I did not expect to be writing about this early. Our model is now beating the market. Not on a hot streak of winners, on the thing that actually measures forecasting skill. More on that in a moment. First, yesterday.
Yesterday
Groups E and F finished their second round, and it handed us the shock of the tournament so far. Ecuador, who the market made an 88 percent favorite, were held to a 0-0 draw by Curaçao, a side playing in their first ever World Cup. That is the kind of result that rewrites a group and humbles everyone who was certain about it.
The rest of the day went more to form. The Netherlands took Sweden apart 5-1, Germany edged Ivory Coast 2-1, and Japan brushed aside a sinking Tunisia 4-0. Our model called three of those four winners. The only one it missed was the Ecuador draw, and so did everyone else, the market included. Better still, our one published bet of the day, the Under 2.5 goals in Ecuador against Curaçao, landed comfortably on the 0-0. A good day at the office.
The number that just flipped
We track our forecasts against the market using a Brier score. Without getting too deep into it, a Brier score does not care whether you picked the winner. It measures how honest you were about your confidence. Say a team is 90 percent and it loses, you get punished hard. Say 60 and it loses, you barely flinch. Lower is better, and it is the cleanest way to separate a forecaster who is genuinely calibrated from one who just keeps backing the obvious favorite.
Through 36 games, our model now sits at 0.559 against the market’s 0.563. We are ahead. Narrowly, but ahead, and that is not a number a homemade model is supposed to win against a real exchange.
What flipped it was Ecuador. We had Ecuador at 68 percent to win that game. The market had them at 88. When it finished 0-0, the market paid a far bigger penalty for being that sure. Our instinct to stay humble on big favorites, the same instinct that costs us a few winners outright when the favorite does deliver, is exactly what just put us ahead. The market still calls slightly more winners than we do. But on calibration, on being honest about what we actually know, we are now the sharper of the two.
Who is winning this thing
After every result we re-run the full tournament ten thousand times to see how it tends to shake out. Here is the current state of the title race.
Argentina are the clear favorite at around 22 percent. France are a clear second at 14. And then it opens right up. Brazil, Austria, Colombia, Belgium, Norway, and England are all bunched between roughly 5 and 7 percent, with almost nothing separating them. So the read right now is simple. Two genuine favorites, and behind them a wide-open scramble where a hot week from any of half a dozen sides could carry them deep.
For the home fans, the honest news is that none of the three host nations sit anywhere near the top. The bracket math is unforgiving for mid-tier teams, who would have to win four to six straight knockout games against the best sides on earth. It can happen. The model just does not expect it.
Today’s card
Groups G and H take their second turn today. Four games.
Spain vs Saudi Arabia is where our one published play sits. Spain are heavy favorites and we do not argue the winner. But we think this is a tighter, lower-scoring game than the market does, so the Under 2.5 is the bet.
Belgium vs Iran, we lean Belgium and so does everyone, no edge worth taking. Uruguay vs Cape Verde, we like Uruguay, though they are without Araujo and De Arrascaeta through injury, and Cape Verde just proved against Spain that they can frustrate anyone.
The game to watch is New Zealand vs Egypt. The market makes Egypt a 60 percent favorite. We have it far closer, Egypt at around 40, with New Zealand a live underdog after scoring twice against Iran last time out. If you want to see exactly where we part ways with the market, that is the game. We find out tonight who was right.
More tomorrow.