So, a funny thing happened in this year's portfolio. It was performing so badly, that I didn't want to write about it. At one point, it's "expected" value in my spreadsheet was less than $1000, equivalent to a -75% drubbing, the kind of thing that would get any money manager fired.
And then Golden State went on an improbable 14-game winning streak (mostly without Kevin Durant), the Lakers won 5 of their last 6 games (with virtually no incentive to do so!), the Grizzlies lost 9 of their last 12, the Bulls won 8 of their last 11, and suddenly things weren't so grim. Let's take a look:
|CHA||36 - 46 (.439)||OVER 41.5||$400||10.00%||-110||L||$0|
|MEM||43 - 39 (.524)||UNDER 43.0||$400||10.00%||-110||PUSH||$400|
|BOS||53 - 29 (.646)||UNDER 52.5||$300||7.50%||-110||L||$0|
|PHI||28 - 54 (.341)||OVER 24.5||$300||7.50%||-110||W||$573|
|GSW||67 - 15 (.817)||OVER 66.5||$200||5.00%||-110||W||$382|
|WAS||49 - 33 (.598)||UNDER 43.5||$200||5.00%||-110||L||$0|
|BRK||20 - 62 (.244)||OVER 22.5||$200||5.00%||-110||L||$0|
|CHI||41 - 41 (.500)||OVER 40.5||$200||5.00%||-110||W||$382|
|HOU||2nd (6.0 GB)||DIV||$200||5.00%||1000||L||$0|
|LAL||26 - 56 (.317)||OVER 26.0||$200||5.00%||-110||PUSH||$200|
|MIN||31 - 51 (.378)||OVER 42.5||$200||5.00%||-110||L||$0|
|MIN||5th (20.0 GB)||DIV||$200||5.00%||500||L||$0|
|CHA||4th (13.0 GB)||DIV||$200||5.00%||325||L||$0|
|IND||42 - 40 (.512)||UNDER 45.5||$200||5.00%||-110||W||$382|
|HOU||55 - 27 (.671)||OVER 44.0||$200||5.00%||-110||W||$382|
|Field vs. GSW||CHAMP||$300||7.5%||+120||?||?|
|Field vs. GSW||CHAMP||$100||2.5%||+130||?||?|
So far, the bets have returned $2701 dollars, with 2 bets outstanding that have a possible payout of $890. Which means, if any team other than Golden State wins the NBA championship, the portfolio will have "only" lost about 10% on its investment. Which, well, given this portfolio's storied history of barely breaking even, should still get me fired, to be honest.
But luckily, it's mostly my money (with apologies to Dre and Brian, who both lost money on their investments this year) so I'll probably be back for more punishment next year. I think there are lessons to be learned:
1) Young players' performance is full of volatility
One of the biggest money losers for me this year was the emergence of Bradley Beal, who was a below average player for 4 seasons, but came into his own this year, pretty much entirely because of his better shot selection. If you look at his 2016/17 shot chart and compare it to 2015/16, you can see that he cut down on those midrange shots, and a much higher percentage of his shots were good ones (3s and the rim). As a result, he got to the line a lot more, and his true shooting skyrocketed to 60%. He's a great candidate for most improved player. His improvement alone account for about 5 extra Wizards wins.
On the flip side of the coin, we have Minnesota. Here I was banking on big improvements from both Karl Anthony Towns and Andrew Wiggins, neither of which materialized. Towns had a great year, but the leap from the prior year wasn't what I hoped for. Andrew Wiggins had an awful year, even worse than his first two, when I was counting on him making the leap from "terrible" to "average". It's worth mentioning that even though he is younger, he's now got only about 1000 fewer minutes than Beal's five year career. At this point, my hopes that Wiggins will "figure it out" are extremely dim. I'd love to be surprised, but if I were running the team, I would definitely be shopping this guy, because he'll want a max contract after his rookie deal, and he's absolutely not worth it, nor even close.
Lastly, we have Frank Kaminsky. How does Charlotte, with so many above-average players, manage to win only 36 games? The answer is Frank The Tank, whose nickname might not mean what he thinks it means. It turns out that centers that can't rebound and who shoot 9 threes per 48 at a 32% clip are really, really bad for the win/loss column. Frank went from bad as a rookie to terrible as a sophomore, which given the 2000 minutes he played was a pretty bad direction for me.
I think the lesson is that if your bet relies in large part on the performance of younger players, be prepared for volatility. I'm not really sure how to avoid this, however, other than obvious cases like Minnesota where the team started three 21 year olds.
2) Injuries and rest make big overs scary bets
It was really frustrating to see the Warriors lose to the Jazz with their starters on the bench for the entire fourth quarter, because what I really wanted was for them to beat the Jazz and then rest all thier starters and lose to the Lakers. In the modern NBA, it's going to be very hard to predict how many games will get decided because the coach just doesn't care about some games.
It's possible that Silver's plans to reduce B2Bs will change this, but for now I'd be very wary of over bets like this year's Warriors over. Of course the Warriors were good enough to win 67 games, and we all sort of "saw this coming", but at the same time it came down to the wire because of injuries. And, ironically, Durant's injury sort of helped me here -- the only reason he played so many minutes in the last few games (and so many other starters played minutes with him) is precisely because he needed the reps after his injury. Otherwise, the Warriors may well have lost a couple of extra games just from resting guys.
On the other hand, the lack of rest probably cost me the Boston bet. Boston wasn't resting anyone in their last few games because they were fighting for the #1 seed (big shoutout to Cleveland for making this possible, thanks guys!). Given how dependent this team is on the Thomas-Crowder duo, it's easy to find another L in those last 3 games if they end up resting either or both.
3) Sometimes Trying isn't enough
I'm still very surprised at just how bad Brooklyn is. I figured that 25 wins was easy from a team full of players (many of them vets auditioning for contracts) that has every incentive to try every night (read: no benefit from tanking). But Jeremy Lin's injury hurt a lot (he's no superstar, but consider his replacements), and Brook Lopez is terrible no matter how hard he's trying.
I've traditionally liked over bets on the worst teams, just because it's really hard to be *that* terrible for 82 games. But in prior years, those over bets were for numbers like 16 or 19. The higher this number gets, the less confident I should feel about it.
I'm sure there are more lessons to be learned (with the primary one being that I should keep my day job), but now it's time to enjoy the playoffs. Go Spurs!