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Beware of Analysis Paralysis

Odds Shark writer Pamela Maldonado explains her analysis paralysis

The PGA is on its third straight week of action. With no other sports on tap, and me finally correcting myself after falling off a bit from betting Korean baseball, NASCAR and UFC, I thought why not try golf?

I’ve been playing golf my whole life. I’ve played every course living in Las Vegas, base my travel plans on which course I’d like to play, have a coach even now to help me improve, and get giddy each time I book a tee time.

Oddly, though, I don’t watch golf on television, much less wager on it. I decided to give it a try. There was no magic on my first effort for the Charles Schwab Challenge

but there was a little bit of redemption on my second attempt with the RBC Heritage event.

That brings us to my third try: the Travelers Championship at TPC River Highlands. I’ll be honest, I got a bit overwhelmed. If you’ve never looked up PGA stats, there are loads (and I mean loads) of data points available.

I started the same way I had the previous two weeks, by first looking at the course hole by hole and jotting down a handful of key stats I thought were most relevant based on the course layout.

Then … rabbit hole. I looked at the many options and eventually just lost it. This was something I hadn’t done for my first two attempts. My brain literally hurt. Hours of effort and I was left so confused.

The Knowledge Project

Why am I telling you this? To serve as a reminder to avoid analysis paralysis. It is a thing.

I needed a break, so I went to the gym to decompress. Coincidentally, I heard this podcast that I swear was meant for me.

If you’ve never heard of The Knowledge Project, I highly recommend it. Hosted by Shane Parrish, he “helps you master the best of what other people have already figured out.” Episode #48: Winning at the Great Game — it’s a game changer. Parrish had hedge fund adviser Adam Robinson on to discuss how to learn and how to fail, and what caught my attention was horse race handicapping. Except, it wasn’t exactly about handicapping horse races. 

I recommend listening to the entire episode, but the point related to this matter starts at the 34:50 mark when they discuss decision-making. We all know that’s a key element in sports betting. I was instantly intrigued.

The Horse Racing Study

Robinson explained that humans have a limited processing ability. Our brains just aren’t able to absorb a large file of information at any one point. Simply put, we have a hard time processing too much information. Um, hello! My exact dilemma just an hour earlier.

It’s easy to think that the more data points you have and the more you use, the better your chances of making the correct decision. However, that’s not the case at all.

Robinson cited a study in which eight horse handicappers tried to predict the winner of 40 races. The study broke down the races by the number of stats used, from five up to 40. Using five stats, the handicappers were 17 percent accurate. With 40 pieces of information, they were still at only 17 percent accuracy.

The handicappers were also asked to rate their confidence. Even more interesting, using just the five stats, they recorded 19 percent confidence in their selection. After adding an additional 35 stats to their logic, their confidence jumped to 31 percent.

This group had more confidence but the exact same accuracy. “All the extra information did was feed their confirmation bias,” Robinson explained.

He continued: “They had already made a decision based on five pieces of information, and all the new information did was make them more confident in the decision they already made.”

The Process of Decision-Making … and How it Applies to Sports Betting

Looking back at my dilemma of absorbing all of the PGA stats I could set my eyes on, this four-minute soundbite simplified what I needed to hear in that moment. As Robinson put it, “reduce complexity to a few pieces you can follow and reason with.” This is something, as bettors, as humans, we are subconsciously aware of but Robinson’s language makes it simplistically retainable.

When handicapping, remember this: you cannot reason with too many variables. In the horse racing study, adding more stats made the test subjects more confident but not more accurate. In my case, it had me doubting my initial process. In my PGA research, I had a handful of stats I had used for the first two weeks. I narrowed down my options and then went wild looking at what felt like a million other stats that, while potentially useful, left me with more uncertainty rather than confidence.

The same could be said of other sports, whether it be MLB, the NHL or football. Take football. If I know a team has a high-powered, pass-oriented offense, I generally just need to look at passing yards per game or even passing yards per attempt. An example of too much detail would be looking at passing play percentage, average team passer rating, or yards gained from passes of 20-plus or 30-plus yards. Keep it simple, stupid.

Let’s say you don’t even handicap your own games. That’s cool, too. Keep the amount of information you obtain to a minimum. Listen to three handicappers instead of 10. The more information you try to absorb, the more confused you will get. Stick to the same content to be consistent.

The key is to be confident with what you do and don’t let outside variables or additional variables mess with your process. Trust the process.