The Sports Trader: NFL Draft Investments

As most of you know, I developed the world’s first real portfolio investment method that can be used to trade sports, called ScoreMetrics.  Doing so has made me a fairly in demand speaker at private functions and trade shows, and my schedule was filling up quite nicely for 2020 until the pandemic hit. 

More importantly than those gigs though, was the fact that ScoreMetrics and Sports Trading has helped me earn a great living and have, what I consider to be, an amazing lifestyle.  While I rely on ScoreMetrics as my bread and butter, I never stop pushing the guys that work for me in the lab to mine for new systems in different sports.  

For years, as my own personal project, I have been working on a system of short term sports investing that is built around the NFL Draft.  Now, as I have mentioned in articles and videos before, I have been a hardcore fan and student of the NFL draft since I was barely old enough to understand what the draft actually was.  I still remember watching my first draft at 12 years old.  I had no idea what I was watching but I could not take my eyes off of it.  

Now, for those of you that have been following this years draft, 2020 is going to be a very different year. The research and information gathering that normally takes place in previous years can’t this year because of the lockdowns and social distancing requirements put forth by local government and by the league itself.  For example, the teams would normally have players in for visits to their facilities as well as meet players on the athletes respective campuses.  These interviews would be done to find out the character of the man as well as the quality of the athlete.   

This year teams are limited to watching film and 3 video chat interviews per player.  No medical reviews, no more physical testing, and no more day long interviews spent with each prospect. 

So, knowing each teams tendencies and needs make up some of the data that we are going to use to develop these systems. Just like I do with all of my ScoreMetrics systems, data is king here and we will use it to our advantage.  

For this test I will be using ten units for investment. 

What exactly is ten units? Well, if you read my book, you know that units are up to the person investing and you should NEVER use the same unit as someone else does, just because they say they are going to use it.  This isn’t keeping up with the Jones’s.

You decide the unit allocation you are most comfortable with.  For an experienced investor like me, ten units could be $10,000.  For someone just starting to build systems, it could be $100.  You get the point.  

First off, let me tell you that there are probably 500 different prop bets you can try to invest in for this years draft and, as you can see by most of the odds, they are suckers bets, to say the least.  

What I tried to do here in this beta test is use 10 draft models and use them to build a master model that generated probabilities.  I then weighed those probabilities against the odds themselves, and if the probabilities of profit were higher than the probabilities of the odds then it was put aside.  I did this until I ended up with 14 investments.  I then narrowed it down to the following 4 choices, and then divided our ten units up across those investments according to highest probability again. 

This is how I would invest in the data that we found.  

Total Wide Receivers Drafted in First Round

Over 5.5 (-150)     –    3 unit investment
Under 5.5 (+115)

80% of models show that there will be 6 or more receivers chosen in the first round
-150 odds equates to 59.88%

Jeff Okudah Draft Position
Over 4.5 (-105)
Under 4.5 (-135)     –    3 unit investment  

100% of models show that Okudah will be chosen #3 overall, by the Detroit Lions (As long as they do not trade the pick away)
-135 odds equates to 57.47%

Total SEC Players Drafted in First Round 

Over 15.5 (+165)
Under 15.5 (-200)     –    2 unit investment 

80% of all models show less than 16 SEC players drafted in the first round
-200 odds equates to 66.67%

Total Offensive Players First Round 

Over 16.5 (-160)      –    2 unit investment
Under 16.5 (+120)

70% of all models show more than 17 offensive players drafted in the first round
-160 odds equates to 61.35%

Whether you are a fan or an investor tonight, I wish you guys all the luck in the world, and I hope you watch and enjoy the draft.  It will be nice for us to have some normalcy in our lives again and sports brings us that.  

Until next time.

You can’t be a 1%er if you think like the other 99%,

The Sports Trader 

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