Sunday, March 20, 2005

Rodney Paul at Forbes.com: Ten Betting Tips For March Madness

Forbes.com: Ten Betting Tips For March Madness

Rodney Paul is in Forbes again. This time for his comments on betting on the NCAA basketball tourney. SHort version: market is pretty efficient. But don't take my word for it, watch the video--No it is not of him.

I am convinced that NCAA pools can tell us quite a bit about stock market investing. For instance, if we acknowledge the existence of the value anomaly, then one explanation is that these out of favor stocks are boring and you miss picking the bragging rights of being able to talk about them. The same holds true with pools. Picking the top seed yields the highest expected number correct, but you miss the excitement of picking the Vermonts and Bucknells.

Want a much better explanation of this idea and how it is impacts financial markets? William Bernstein (yes the author) does a great job in his INEPT model.

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