Bracketology (2024 Edition)
Bracketology (2024 Edition)
It's the most wonderful time of the year.
This back-to-school commercial cracks me up every year.
That said, now is the most wonderful time of the year. I’m pushing this TBL out earlier than normal because I will be at the only conference basketball tournament that really matters, the ACC Tournament. And, of course, March Madness starts next week.
Today, we take for granted that we can watch every game in its entirety (assuming you have access to the relevant cable channels, including TruTV). That wasn’t always the case. It used to be that you got the game(s) your local CBS affiliate decided to air and had to live with updates if the game you wanted to watch wasn’t on.
I hated being an attorney (and gave it up more than 30 years ago). However, because I represented CBS, which then had exclusive rights to the tournament, I had one perk I loved. On the opening days of the tournament (Thursday and Friday), CBS hosted an event with food and live feeds from every tournament game. I’d walk over from my office to the CBS headquarters in midtown Manhattan at noon to hang around watching games until it was time to catch my train home. It was cable before cable and it was great.
We had pools then, too. I won a big one in 1991 because everybody else had UNLV (a huge favorite) and I picked my alma mater (out of loyalty, not that I truly expected to win).
This week’s TBL will have a look at the tournament and our tournament brackets in particular (as usual).
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Bracketology (2024 Edition)
As my friend Mark Newfield likes to say, the Forecasters Hall of Fame has zero members. And he’s right. Of course. Yet, I do have a prediction I’m pretty confident about. Millions of NCAA Tournament brackets will be filled out in the next week but none of them will be perfect. Not that I’m going out on a limb.
I watch more college basketball than I should, but my bracket is usually busted on the first afternoon. Sometimes from the first game. You shouldn’t expect to do any better.
As many as one hundred million brackets will likely be filled out this year, like every year, but there has never been a verified perfect one. Wild randomness is why March Madness is so great.
The odds of picking all 63 tournament games correctly are the odds of each game multiplied together. Those are insanely long odds. Usually, nobody gets the full first round correct. In other words, usually, nobody’s bracket gets to the opening weekend.
Gregg Nigl, a neuropsychologist from Columbus, Ohio, has come closest so far to a perfect performance. In 2019, submitting a hastily filled in bracket – and under the influence of cold medicine – Nigl predicted the first 49 games of the tournament correctly (into the Sweet Sixteen) before seeing his streak snapped. Nigl’s bracket finally went bust on game 50 (the third game on the second weekend) – about a one-in-five-million level of success.
One bracket in 2017 was right through an incredible 39 games. In 2014, one bracket was alive through 34 games.
The difficulty lies in the upsets, of course. March Madness is a very high variance proposition.
Top seeds have only lost to 16 seeds twice in the seeded era – since 1979 – and both occurrences are recent. And about 60 percent of national champions are one of the four number one seeds. But 12-seeds beat fives more than one-third of the time. The 11 and 10 seeds win about four times in ten. Five 11-seeds have made it to the Final Four: LSU in 1986, George Mason in 2006, VCU in 2011, Loyola Chicago in 2018, and UCLA in 2021.
The nine beats the eight more often than not, although Villanova won a national championship as an eight-seed in 1985. UConn won the national championship as a seven in 2014. North Carolina State in 1983 and Kansas in 1988 won it all as six-seeds.
As a general rule, there are many more upsets early than late.
Since seeding began in 1979, all four two-seeds have reached the Sweet 16 only six times. A double-digit seed has advanced to the Sweet 16 nearly every year. At least one team seeded fifth or lower has advanced to the Elite Eight almost every year. And a “First Four” team usually wins a second game.
That’s a lot of variance.
It is often claimed that the odds of picking a perfect NCAA Tournament bracket are a staggering one in 9,223,372,036,854,775,808 (that’s 9.2 quintillion – a quintillion is a billion billion). To put that into perspective, if every person on the planet (about 7.9 billion people) started filling out a bracket per minute, it would take over 2,000 years to fill out 9.2 quintillion. By way of comparison, there are something like 7.5 quintillion grains of sand on the earth. You’d have a better chance of making four holes-in-one in a single round of golf than of creating a perfect bracket with those odds.
The following are much more likely than a perfect bracket.
Picking the 32 first round games correctly (about one in 3,500-10,000, depending on the year).
Being dealt a royal flush in a game of Texas Hold ‘Em (one in 30,940).
Winning the Powerball jackpot (one in 292,201,338).
A roulette wheel hitting the same number seven times in a row (one in three billion).
Hitting a jackpot on a classic slot machine (meaning one with three wheels, each with 64 “stops”) (one in 262,144).
During the 2010 World Cup, Paul the Octopus picked the correct winner of eight-straight matches, including the final (his odds of doing so were one in 256).
Note, however, that these calculations assume every game is a 50:50 proposition, which of course isn’t the case. Duke math professor Jonathan Mattingly claimed the average college basketball fan has a far better chance of achieving bracket perfection than one in 9.2 quintillion. According to Mattingly, adjusting probability based on seeding, the odds of picking all 63 games correctly is more like one in 2.4 trillion. Using a different formula, DePaul mathematician Jay Bergen calculated the odds at one in 128 billion. The NCAA says it’s one in 120 billion.
Whatever the true odds, if you are really lucky, your perfect bracket will last about halfway through Thursday’s opening day games.
That said, there is a chance.
The highly unlikely happens surprisingly often, of course. In 2009, New Jersey grandmother Patricia Demauro set a craps world record over four hours and 18 minutes by rolling a pair of dice 154 times before crapping out. Her odds of doing that were one in 5.6 billion.
In Monte Carlo, on August 18, 2013, a Roulette ball landed on black 26 times in a row – the longest such streak ever recorded, with odds against of 136,823,184 to one. As the streak lengthened, gamblers lost millions betting on red, believing that the odds changed with the length of the run of blacks – a classic exhibition of the gambler’s fallacy.
In June 2002, electrician Mike McDermott won £194,501 on the UK National Lottery after correctly choosing five numbers and the bonus ball. Fast-forward four months to October and Mike was still playing. He matched the exact same five numbers and bonus ball that he had in June, having continued to play them out of habit. He picked up another £121,157. The odds of Mike winning twice with the same numbers were over five trillion to one.
Despite remarkably long odds, Richard Lustig has won the lottery seven different times, Roy Sullivan survived being struck by lightning seven times, and the roulette wheel at the Rio in Las Vegas landed on 19 seven consecutive times.
Motoyuki Mabuchi went all-in with four aces in the main event game of the 2008 World Series of Poker but lost to Justin Phillips’ royal flush. Even worse for Mabuchi, the final diamond ace that handed Phillips victory came with the last card drawn. As Ray Romano said, “How many times you gonna see that?!”
The odds of this exact showdown occurring were about one in 165 million. That’s a bad beat.
It seems like it ought to be easier than that to pick winners and better brackets. There is no spread involved and a full season of games has been played, allowing us to evaluate the teams with a significant amount of data. But the short answer is that there are simply too many variables and too much randomness involved to think that we can succeed in picking all those winners.
To track the evolution of the universe for even a millisecond, astrophysicists would have to pinpoint billions of individual stars and then use paired-gravity calculations to compute all the forces at play. It would take years.
Henri Poincaré proved back in 1887 that the motion of three objects within the same system is non-repeating and thus chaotic. In other words, the historical pattern has no predictive power whatsoever with respect to where the objects will be in the future. There is no possible algorithm to solve this problem and no predictable pattern. Accordingly, nobody can solve the three-body problem and predict the future of such a system. That we cannot expect to predict the movements of just three independent variables more than suggests nobody should expect to be able to forecast the future.
There are more ways to arrange a 52-card deck than there are atoms on Earth, which means that every time you shuffle a deck of cards, the same order of cards has probably never been seen in human history and may never be seen again.
NARRATOR: “Next time you are tempted to make a market prediction, you might recall that the global economy has a few more than 52 variables.”
Daniel Kahneman describes randomness as noise and is convinced that “bias has been overestimated at the expense of noise.” Moreover, “noise and bias are independent sources of error, so that reducing either of them improves overall accuracy... and the procedures by which you would reduce bias and reduce noise are not the same.” Indeed, “as a first rule, there is more noise than people expect, and there’s more noise than they can imagine because it’s very difficult to imagine that people have a very different opinion from yours when your opinion is right, which it is.”
Despite that reality, according to a study undertaken by the CFP Board, 88 percent of consumers and 30 percent of financial advisors think it’s easy to manage money. However, everyone should agree that predicting what will happen in the world and in the markets has many more variables and requires much more complex thinking than predicting the binary outcomes of basketball games.
REMINDER: We aren’t very good at picking basketball games.
As the great playwright Tom Stoppard understood: “[T]here is really, really good news if you end up feeling lucky rather than clever.”
As Stoppard postulated in his play, The Hard Problem: “In theory, the market is a stream of rational acts by self-interested people; so risk ought to be computable. But every now and then, the market’s behavior becomes irrational, as though it’s gone mad, or fallen in love. It doesn’t compute. It’s only computers compute.”
It doesn’t compute, of course, because markets are driven by people, who may be self-interested, but who aren’t necessarily rationally self-interested at any given time. They are mere human people, not computer people. They are yearning, hurting, illogical, infuriating – driven by the attraction Newton left out. We want binary questions and simple answers in a world far messier and more complicated than that.
As Nobel laureate Robert Shiller has clearly explained, “The U.S. stock market ups and downs over the past century have made virtually no sense ex post.”
Let’s stipulate that forecasting the future is always difficult and that predicting how humans will perform under stress is incredibly difficult. By most models, even the very best team in the tournament has only something like a 15-20 percent chance of winning it all. That’s why your office pool can be won by Janice in Accounting who has never seen a game and picks her winners based upon team colors and mascots.
In related news, we shouldn’t be surprised when the market remains “irrational” far longer than seems possible. But we are.
Still, you can improve your odds a bit and maybe win some money in a pool (because nobody is very good at this – in the land of the blind, the one-eyed man is king).
The number of players in the pool you’re playing is the most important factor for determining your bracket strategy. If you are in a smaller pool, you’ll want to take fewer risks. Chalk is your friend. If you’re in a larger pool, you’ll want to be risk-on. Pay attention to any special rules for your specific pool and adjust your picks accordingly.
For upsets generally, you can check public bracket metrics to see which teams on each seed line are the most popular and consider “fading” them for your upset selections. Betting markets are the best available measure of a true win probability projection for a specific game. Accordingly, if (for example) a 4-seed is being picked to move on in 90 percent of brackets but the betting market only gives it a 75 percent chance of winning, that might be a 13-seed worth picking. Especially in big pools, you might want to fade the most picked teams.
BOTTOM LINE: The world is messier, more random, less predictable, more surprising, and less linear than we assume.
That’s great for the NCAA Tournament, of course, and bad for your bracket. It’s also more than a bit problematic elsewhere. But, at least in the context of bracketology, it sure is fun.
Totally Worth It
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Benediction
We live on “a hurtling planet,” the poet Rod Jellema informed us, “swung from a thread of light and saved by nothing but grace.”
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As always, thanks for reading.
Issue 168 (March 15, 2024)