Naive Betting Strategy Review
Each week we review several simple hypothetical betting strategies, including 1) betting with changes in the spread, 2) fading the public (i.e. betting on teams to cover that have garnered less than 40% of public betting support), 3) taking all favorites to beat the number, 4) backing all home teams versus the line and 5) supporting home underdogs ATS. Consistent with research on the topic, we expect certain trends to exhibit profitability over extended horizons. For example, Paul and Weinbach (2010) find evidence of statistically significant profitability related to betting against public sentiment; and Borghesi (2004), Gandar, Zuber and Lamb (2007), Borghesi (2011) and Humphreys, Paul and Weinbach (2013) all validate the existence of a home underdog effect in NFL betting markets. But, while over reasonably long timeframes these tendencies are likely to manifest, from one season to the next we allow for the potential emergence of shorter-term drifts that run counter to these bigger picture predilections. We hope this form of analysis serves as a cross-check for our power rankings and computer simulation-based picks from one week to the next.
The Betting Line
According to data from TheFootballLines.com, line movement was 6-5 against the closing spread last week, for a nominal profit of +0.5 units. Accordingly, the season-to-date record for this factor improves to 32-28-1.
Betting Sentiment
The trend through four weeks of NFL action had been to alternate betting against and then with extreme levels of public support. Week 5 finally showed a breach of this pattern, as the betting public was remarkably prescient, accurately clustering around six ATS winners, versus favoring only one loser en masse (there was also one PUSH last week). The cumulative record for fading the public falls to 24-23-1 after last week's severe loss, and the strategy swings from season-to-date winner to loser.
Favorites/Underdgos
At 7-6-1, underdogs registered profitability again in week 5. This instance marks the third consecutive winning week for bettors taking points. Underdogs improve to 43-32-2 versus the number on the year, for +7.8 units of profit.
Home/Away Teams
Road teams recorded an exceptional week 5, finishing 9-4-1 ATS, after a 10-6 week 4. Home teams record now stands at 35-40-1 this year, for a loss of 9 units. Conversely, while backing traveling teams to cover has amassed +5.0 units of winnings over the last two weeks, this approach is a modest loser (-0.5 units) season-to-date, assuming the standard vig.
Relatedly, in the face of another strong showing for underdogs broadly, home dogs followed up week 4's 2-3 out with a virtually equivalent 2-3-1 ATS record last week. Now at 17-14-1 on the year, home dogs' edge, which owed largely to a dominant week 3, is slowly being whittled away.
Profitability Summary for Naive Strategies
Underdogs +7.8 units
Home Dogs +1.6 units
Line Movement +1.2 units
Fading the Public -1.3 units
Home Teams -9.0 units
The Good, the Bad and the Ugly
Our week 4 performance was atrocious, but we were confident in some manner of rebound in week 5, if for no other reason than that it is statistically improbable for so poor an outing to be immediately replicated. Coming into last week's action, we noted that our week 5 picks were evenly split between favs and dogs and that we mostly avoided games boasting extreme public sentiment. We speculated that this more balanced bet slip would likely coincide with less extreme performance. This view may have been spot on, as we went 6-4-1 in week 5 (we were though biased somewhat in favor of underdogs, which certainly helped our cause).
Of interest, our power rankings framework was actually a sterling 5-2-1 versus the number last week. However, aggregate performance was watered down by our sim-based Titans and Giants picks. Our computer simulation picks were 2-1 in aggregate last week (we had the Panthers, at least), and are a disappointing 7-9-4 this year.
Nonetheless, a solid overall week 5 brings our record to 27-23-2 on the season, and moves us back in the black. The chart below illustrates the ebbs and flows of our picks thus far.
Down to Brass Tacks
Our power rankings factors agree on nine Sunday games. The following table illustrates each of our wagers, the actual vigs we incurred, the expected cover margin, an account of the appropriate model's season-to-date performance picking games featuring the involved teams and an indication of the extent to which the public is aligned with our thinking (as reflected by the percent of spread bets tracked by SportsInsights that back our pick).
Most noteworthy, we are betting against three of four teams coming off the first BYEs of the season. Our power rankings model has us fading the Falcons, Saints and Broncos and siding with Washington. On the one hand, we are well aware of the historical peril this strategy entails, as, per the following chart (based on data from TeamRankings), since 2003, well-rested teams have covered at about a 54% clip--above the breakeven rate of 52.4% implied by the standard juice level.
On the other hand, a pretty clear cyclical tendency is evident upon a cursory examination of the post-BYE week performance data at our disposal . Per the chart above, a reversion has occurred after each two-year win streak for teams playing after BYEs. Further, in recent years, volatility has increased in the cover rate for teams following a week off. The extremely low ATS win rate in 2014 and the exceptionally high win rate in 2016 evidence this thesis. Both of these observations speak to the potential for a particularly poor showing from teams coming off BYE weeks this season.
Happy betting!!