Goldman is Long Brazil
What good is the World Cup if you can’t slap on some arbitrary numbers on the teams and bet on the odds of each team winning/losing? Investment banks like Goldman Sachs are experts at taking ‘calculated’ risks, and so far they couldn’t restrain themselves by simply observing the beautiful game from afar.
To produce a 67-page report named The World Cup and Economics 2014, Peter Oppenheimer, chief global equity strategist at Goldman Sachs, and three dozen more GS employees have been doing research, interviewing players like Ramires and Oscar (whose playing was superb btw), and using “stochastic models” to pinpoint exactly the percentages of each team winning the Cup. The report goes so far as to predict the actual final scores of all the 64 matches, based on the data set of all international play since 1960, as well as the economic wellbeing of each country, however useful that is.
So who’s likely to win the Cup according to Goldman? Here’s the list:-
1) Brazil – 48.5%
2) Argentina – 14.1%
3) Germany – 11.4%
4) Spain – 9.8%
5) Netherlands – 5.6%
6) Italy – 1.5%
7) England – 1.4%
8) Uruguay – 1.1%
9) Portugal – 0.9%
10) France – 0.8%
Looks like GS shares might take a dip if Brazil doesn’t win. And oh, the report is available online for free. Here's the link
I always lol at the Brazilian nut-hugging. The first game was pretty much handed to them. More realistic result would've been Croatia winning, or it ending a draw. Right now the NL are looking like the strongest team, but I'll wait to see how Germany plays.
JPM's guys predicted England in 2010 (though it was a bit tongue in cheek since it was done by - I think, English guys out of their London office)
Wouldn't be surprised with the amount of home cooking going on
brazil overrated
arg looks pretty suspect after last night
germany italy and holland riding sky high
OP, anyone who goes to the beach in Brazil will be very long very fast; it's inevitable.
50k. Probably going to pay roughly $100 over the minimum payment each month and put 100% of bonuses towards repayment. Hopefully I'll be debt free in 5 years and take that much needed sabbatical.
What's crazy is that these sort of models are used to determine economic policy, i.e., the welfare of entire nations. They can't even accurately predict outcomes of football matches but they're expected to forecast the actions of millions of individuals acting on their own subjective preferences.
In either case, if you're more accurate than a coin flip and then if you're more accurate than social perception your work has some merit. The stochastic models are rough approximations but I agree that in many cases they are far too simplistic.
I've gone through the GS WC report and its model is lacking. Bloomberg's is quite a bit stronger in my opinion. GS favors Brazil by such a ridiculous amount because of the "home country premium" they are using in the model. Seems a bit excessive to me. Although the "home continent premium" they are using seems to be valid so far. But small sample size.
I find the chart they provide showing the difference between their odds and that of a leading oddsmaker to be very insightful. Are the oddsmakers that wrong? Doubtful.
The funny thing is these IBs think they can predict the odds using whatever models they have. Past performance has nothing to do with future performance, especially in sports where players are human. There's so much variables such as form, injuries, mentality, pressure etc. involved on the field. They're trying to be precise in an imprecise sport. And the worst thing is, people are eagerly waiting for these reports as they say it's one of the most anticipated reports they've ever made. Side note, look at Spain and England, they're already eliminated even though Spain won the last World Cup and England has some of the best players in the world.
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