Seeing Potential Through the Noise
Extracted from Bloomberg.
Balancing gut instincts with the picture formed by data is critical - whether you're a Ryder Cup captain, or an investor.
In 1995, U.S. Ryder Cup captain Lanny Wadkins used one of his wild card picks to place Curtis Strange on his team. The two had been friends since their days as teammates in college, and Strange had a well-earned reputation as a ferocious competitor. He had won the U.S Open in 1988 and 1989 - and in one of the finest comebacks in Ryder Cup history, pipped Ian Woosnam in 1989 by birdieing the final four holes of their match after being two down with four to play. On an emotional level, handpicking Strange to be part of the team seemed to make sense.
Here's what the pre-Big Data data said about Curtis Strange circa 1995, however: His career record in Ryder Cup matches was 6-9-2 - a winning percentage of .382. He was No. 61 in the World Golf Rankings, had not won a tournament since the 1989 U.S. Open, and missed more cuts in 1994 and 1995 than he had top 10 finishes.
Wadkins' gut was wrong; the data was right. Strange played in three Ryder Cup matches in 1995 and lost all three points. Europe won the overall competition by a single point.
Winnowing and prioritizing the list of players who might be captain's picks is a major responsibility for Darren Clarke (Captain, European Team) and Davis Love III (Captain, U.S. Team) in the lead-up to this year's Ryder Cup (Hazeltine National Golf Club, Chaska, Minnesota, Sept. 30 - Oct. 2).
Clarke and Love III already have a watchful eye on players who have the potential to increase team performance levels. The two men are both old enough to fondly remember the pre-digital, pre Big Data days of professional golf, but young enough to have experienced the transition period when data analysis emerged as an important tool in evaluating a player's game. The fact remains, however, that golf in an emotional game, and the choices made by the 2016 captains won't be any easier than those made by Wadkins 21 years ago.
"I think we both realize the importance of going with our gut because we know all the players," says Clarke. "While data will help and direct us towards some of the decisions, the bottom line is that we've both got to go with our gut feelings as well. We know the players thrive on being in possibly momentous situations, and that's the big difference between some players and others."
Previous Ryder Cup records indicate that gut instincts alone are not enough in making captain's picks. Strange's 1995 performance is hardly unique - captain's picks have lost three or more points 10 times in The Ryder Cup, including twice by Nick Faldo, the all-time points-won leader on either side. As a group, through 2014, captain's picks for both sides have won a few more matches than they've lost, with a cumulative record of 111-101-35.
“In volatile markets, investors tend not to react to fundamentals, but rather they engage in herding behavior and sell indiscriminately.”
Can more effective use of data improve the quality of captain's picks? Golf's leading expert says that the captains need to take advantage of all the available information before making those crucial picks because data can reveal elements of a player's game that simple observation might miss.
"There's information in the data that no one can absorb by themselves," says Mark Broadie, Ph.D., a Columbia Business School professor and author of Every Shot Counts: Using the Revolutionary Strokes Gained Approach to Improve Your Golf and Strategy. "Even today, as the captains are considering their picks, they won't have seen every shot made by a player over an extended period of time. That's one of the things you can get from data - a mass of information that can be quite useful. From that perspective, you want to use data and gut instincts together - not just one or the other."
Eliminating data noise
"One of the challenges of looking at data to compare players is that the number are being generated under varied circumstances," says Broadie. "Players are playing on different courses, or at different times under different weather conditions. So you want to look underneath the data, too. Was the course set up difficult? Were fairways wide or narrow? Were the greens fast or relatively slow? That's the type of analysis that can help inform who might be a top performer at The Ryder Cup at Hazeltine."
A similar approach can benefit investors in volatile global market conditions. "In volatile markets, investors tend not to react to fundamentals, but rather they engage in herding behavior and sell indiscriminately," says Jeremy Lawson, Chief Economist, Standard Life Investments, the first Worldwide Partner of The Ryder Cup. "Data is nothing without analysis. In volatile circumstances, if you're very careful about the way that you're analyzing markets and data, and you're doing very good research yourself, you can identify misalignments. Those misalignments can create opportunity when you instincts are telling you it's time to pull back."