Predictive "skill" refers to the ability to make forecasts that outperform some naive baseline. A seasonal climate forecast has skill if it improves upon expectations derived from long-term climatology, a managed mutual fund has skill if it outperforms an index fund, a World Cup prediction has skill if it improves upon a simple way of generating forecasts.
In this competition I am going to employ two naive methodologies. The first is simply to take the FIFA ranking as the basis for deciding the winner of each game. This results in Brazil as the champion, with Spain as runner up. In the ESPN bracket, the rankings are conveniently provided next to the team names. Were you to come from another planet and have no knowledge of soccer, you should do no worse than a forecast generated naively by looking at the rankings. After all, the rankings are supposed to say something meaningful about relative team strengths. This entry is called Naive.2-FIFAWorldRanking in RogersBlogGroup.
I am also using a second naive methodology, which is based on the estimated player value of each national team.
| GROUP A |
| GROUP B |
| GROUP C |
| GROUP D |
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| South Africa | 35 M€ | Argentina | 390 M€ | England | 440 M€ | Germany | 305 M€ |
| Mexico | 95 M€ | Nigéria | 115 M€ | USA | 55 M€ | Australia | 40 M€ |
| Uruguay | 145 M€ | South Korea
| 50 M€ | Algeria | 55 M€ | Serbia | 185 M€ |
| France | 450 M€ | Greece | 100 M€ | Slovenia | 45 M€ | Ghana | 115 M€ |
| TOTAL | 725 M€ | TOTAL | 655 M€ | TOTAL | 595 M€ | TOTAL | 645 M€ |
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| GROUP E |
| GROUP F |
| GROUP G |
| GROUP H |
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| Holland | 280 M€ | Italy | 400 M€ | Brazil | 515 M€ | Spain | 565 M€ |
| Denmark | 85 M€ | Paraguay | 90 M€ | North Korea | 15 M€ | Switzerland | 115 M€ |
| Japan | 70 M€ | New Zealand | 15 M€ | Ivory Coast | 180 M€ | Honduras | 45 M€ |
| Cameroon | 140 M€ | Slovokia | 70 M€ | Portugal | 340 M€ | Chile | 85 M€ |
| TOTAL | 575 M€ | TOTAL | 575 M€ | TOTAL | 1050 M€ | TOTAL | 810 M€ |
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| Values in M€ (millions of Euros) | |||||||
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The forecast based on team worth is named Naive.1-TeamWorth, and it has Spain over Brazil in the finals. It is a bit more sophisticated than the FIFA World Ranking to be sure, but it is still a fairly naive metric for forecasting.
I have also entered into the mix forecasts generated by three big financial firms: Goldman Sachs (Brazil), JP Morgan (England) and UBS (Spain). (That previous sentence may provide you with all you need to know to remove all your investments handled by JP Morgan;-) These forecasts can be found from links here. As you can see, they spent considerable effort in making these forecasts, using fairly sophisticated methods akin to ones used to guide their investment decisions. These sophisticated methods should outperform the naive methods, if they are to any value.
Do you think you have skill? Can you beat the big investment banks? Sign up here!