In addition to death and taxes, investors could be forgiven for being seduced into the belief that there are two additional certainties in life: 1.) stocks will only ever go up, and 2.) the Patriots will either make it to the Super Bowl, or at least be in contention each year (they have played in the AFC Championship game in each of the last seven years). The remarkable consistency demonstrated by the Patriots is something that any active manager should envy. And believe me, on a team of quantitatively-oriented individuals, there has been much debate about the reason therefor. One of our team members (who shall remain nameless so as to protect him from internet trolls) is resolute in the belief that Tom Brady is merely “average”, and that it’s the system that makes him so good. I’ll have to use that line of thinking when his bonus is next up for debate – it’s not you, it’s our system…but I digress.
At present, the mighty Patriots are favored by 4 points, which equals the largest spread since 2013. With that in mind, how should those participating in friendly office wagers place their bets? Our partners at Analytic Investors (the sub-advisor to both of our long/short equity funds) have been using their NFL Alpha and Volatility models to predict winners since 2004. They’ve been correct in 10 of 14 years; quite an accomplishment. To learn what they believe is in store for this year’s Super Bowl, please read on.