Apparently, the JPM system uses rankings from Fifa and bookmakers' odds as two "valuation metrics" for the 32 teams. Hmm. As any football punter knows, these measures are notoriously inexact, as bookmakers offer prices, not probabilities; while the Fifa rankings have never shown any useful correlation with which country actually lifts the World Cup.
Thursday, 20 May 2010
Investment bank, JP Morgan, has got itself plenty of easy publicity by using quants to predict that England will win the World Cup this summer. But is this another example of why these mathematical models are so often flawed?