Pushkin. Welcome back to Risky Business, our show about making better decisions. I'm Maria Khannikova.
And I'm Nate Silver. Today on the show, we're going to be talking about the topic that we always talk about, should Democrats Panic? About the polls and the election which is now less than two weeks away. And then we'll speak with Daryl Morey, who is the president of basketball operations for the Philadelphia seventy six ers and one of the og stat nerds that made it big in professional sports. I think you really like this interview.
Yeah, I'm looking forward to that conversation. But before we get to that, let's talk some politics.
So we're in week what is it, week number two or three of Should Democrats Panic? I think the panic meter has gone up a little bit.
Actually, yeah, I think so too. Obviously, still a toss up, but it's not like we're seeing a surge or strong results or anything like that.
But look, there are toss ups, and there are tossups. Maria, would you rather have para jacks or Ace king off suit.
It's close, Yeah, it's close. It's close.
Right In the pair of jacks, it wins like fifty five percent of the time, I think fifty six.
No, I think I think I'd always go for the pair. That's just me.
Yeah, I want the fifty six. I mean Trump is We're taping this on Tuesday, early afternoon. The latest Silver Bulletin forecast is Trump with a fifty three percent chance of winning the electoral college, Harris forty seven percent. So that is very close. But you know, a couple weeks ago we have the opposite situation, where was Harris with
fifty three or fifty five percent. You have seen some fairly consistent shifts in national polls where Harris led by as much as three or three and a half points. It's down to about a point and a half or two points now, and an election is close, a one
one and a half point swing makes a difference. But again, the bare case for Harris is that like she had these various events that kind of temporarily inflated her numbers, denomination, the convention, and the debate, and without that, the gravity kind of drags her down to having this very narrow national lead, which is maybe not enough in the electoral college.
Uh Michigan was coonstin Pennsylvania are now basically tied before they had shown small Harris leads you can put lead in scarepute if you want, but of a point or two points, whereas Georgia, North Carolina, Nevada, Arizona, Nevada, Nevada are also very close, but except for Nevada, probably leaning toward Trump by a point or two and so and so. It just makes Harris's path incrementally, incrementally a tiny bit more difficult than Trump's. Yeah, a couple extra outs. Basically, yeah, for sure.
I just voted, by the way, I just voted in Nevada, so we've got we've got my swing vote working for Clark County.
In Nevada. The early voting data based on party registration, Now, we don't know what happens with unaffiliated voters. We don't know how much votes being cannibalized from election day. We don't even know that Republican registries are voting Republican. There can be some Nikki Haley vote, I guess, I don't know, let's say, But so far, through a few days of this, there's actually a slight GOP edge and early voting in Nevada. That's one of the few states where where it has
been more reliable in the past. Look, I'm ninety eight percent of what you hear about early voting I would chuck out. But have gotten kind of bad for Democrats. The polls have gotten worse, and I think, on the one hand, this can be exaggerated. If you cross the line from fifty two percent to forty eight percent, it
feels like a big deal. On the other hand, I know there are a couple of posts up at the newsletter recently about you know, what is Harris's closing message in the final two weeks ago, Like what is it? What do you think you're closing messages?
You know, I just read your post about that and okay, biased, Yeah you did bias me because I just read it
right before we started taping this. So for people who have not read your newsletter, you drew a really interesting contrast between Harris and Obama, which I actually thought was really thought provoking, because Obama's messaging was much more a call to action, like this is where we stand for, this is kind of you know this, this is what I'm going to do, and this is what I need you to do right now, and Harris's is just like fourteen days to go, let's go.
Okay, do you write enough things to say it's fucking election.
So so you know, fourteen days to go, Yeah, okay, let's go.
Democrats still have more money in total, Harris isn't raising record amounts. Maybe it's close to record. I'm not gonna worry about inflation adjustments either way, she's raising a shit ton of money.
I think that's a very good scientific term.
And they're usually a little bit more efficient with their adviys they buy ads earlier and so so money is not particularly the problem.
No, but there are definitely, you know, there are messages that I think really matter and resonate with people like abortion, you know, democracy, right, Like there are key words that we can be using, and we have you know, election tampering from Elon Musk, Like there are things like you know, you have the you have the Republicans calling out Democrats all the time, and I know that as you say, like, don't want to antagonize, but like to fourteen days, right,
if that's your message, that use those damn fourteen days to like, you know, to do everything you can to get those swing states. And man, I wonder like inside that campaign, I'm just looking at some New York Times and other headlines this morning being like Shapiro's doing his best. I'm like, inside the campaign, are there any people being like, fuck, we really should have got with Shapiro.
Well, they were kind of doubling down on this likability vibes factor with Walls, right, and now you see, by the way, when all this was happening in the summer, then it seems like things were evolving incredibly rapidly, and it's hard to see even for me. You know, at some point I was like, oh, maybe these vibes are working. I mean, if there's a theme of like my newslayer this year, it's that Democrats face a real uphill battle in the selection, and it's not fake polls or anything else.
Biden's age, on top of everything else, made it nearly impossible, whereas Harris is fifty to fifty ish or Ace King against Jack Jack. But it's a difficult race to win when you're kind of like running away from the incumbent, but can't really say that explicitly. Maybe you just fucking throw Joe Biden under the bus, right, I'd like, this motherfucker undermine me. This motherfucker was way too old. You fucked it. The debates I'm good at debates unlike him,
So a reduced number of debates. Yeah, gave me the fucking gave me the fucking border to undermine me.
But yeah, I think that our panic meter P panic, pea panic is.
Uh is the silver bulletin for it a fifty three percent panic. If I had to make a bullish case for Harris right then I'd say the following. I'd say that, uh, First of all, vibes don't really mean anything, and if anything, they're kind of a contrarian indicator. You saw that a little bit in twenty twenty two where the bull showed a close race and there was all this talk about like a red wave. You know, I'd say she'd probably have a better turnout operation and have more money in
the final two weeks here. You know, I'd say, I mean, it's hard to make the case she's a favorite, you know what I mean, It's easy to make the case that it's still a toss up. I missed what the models say basically, right, But maybe yeah, maybe I'd say, like, maybe I'd say, yeah, you have some enthusiasm advantage in the polls for Republicans, and people are just kind of
psycking themselves out a little bit. But she's never really had like that much of a lead the Electoral College in this point, in this whole campaign is the issue she's never really clearly pulled ahead.
I think that's absolutely true. And if we go back to our poker Jacks versus Ace King, I think that's actually a pretty good metaphor, like she needs to hit her ace or her King, and all Trump needs to do is avoid her outs, right, like he needs to avoid those cards. And so it's that's that's why you'd rather have the fifty six percent.
And now we're back with Darryl Morey, who, as we said, is the president of basketball operations for the Philadelphia seventy six ers. The NBA season is starting this week, so I'm looking forward to this chat.
Yeah, I'm really excited for this conversation. Nate and I have both known Darren for a while, and I said, Darryl.
He said, let's let's let's good to us. I use a replay challenge.
I thought, I thought you were doing really well, Maureen, and then I.
Sucked it all up. All right.
Yeah, So first question, I want to make a deal here, Darryl, if you give me your NBA Championship pick which teams are in the finals and who wins. I'll give you my election pick. Okay, okay, all right, Oh.
My god, and I and I am the lucky person who gets to hear this for the first time before anyone else. This is amazing.
No, I think I think that's great. I mean, obviously the Philadelphia seventy six ers on the on the east side, and I think I'll I'll jump in and just go with Oklahoma City.
I mean, I don't.
I don't feel like, uh, that's sort of a boring pick. But they they have so many assets. They have so many assets. Even if they're they're close, they're going to put it over the top with then you too.
So so my election pick is.
So cheated. Okay.
I knew we Daryl, We should have known that it was too good to be true. He was never actually going to deliver on that. He was always going to.
Yeah exactly.
I was like, well, we finally get Nate to commit.
No, I'm excited to be on because you guys are all about decision making.
That's the only thing I do. So I'm on.
I'm on twenty twenty two years. I think I think that's right. Yeah, of just making decisions for teams.
So for people who don't know you are a true Varian, to use a term from the book Gerald, like you even play. I mean you're really competitive and you like analytics, but you really want to win.
I just like, yeah, yeah, exactly exactly.
I think I think that's a motivation that we can we can all relate to.
It's funny because of you, and thank you God, Maria. Sorry, no no.
I was giving a talk in Miami at uh at a conference where where there were a lot of people who were very into analytics, and we were talking about, you know, different strategies and all of this, and I was like, you know what, but like the bottom line is like I love poker, but like I want to fucking win, right exactly.
You guys that.
Congratsar on the brace. You're you're you're one up on Nate. As far as I know, I'm zero.
So it's not hard to thank you so much. Darryl Darresl, I've played poker against you and two or three times or something. Darryl, I'm just gonna tell people has very bad chip etiquette. You're supposed to stack your chips and piles of twenty twenty. Absolutely, if you don't do that, that's actually kind of a disadvance of the players. I can't see any chips you have.
But assets, Daryl, I like you so much.
Don't know.
I'm totally like if a player is seen as good for the game, there might be less requests.
No, I sadly I haven't put the time into poker, and I get invited to a lot of games and I'm not sure why.
Maybe because I don't win very often.
So yeah, I will say though, Maria, you're you're a pro, so's Nate. I try and at least let my ego. Given the fact that I don't win poker a lot, I handle it by pointing out them usually playing with two or three pros, and it doesn't seem very fair.
If you guys, Absolutely not fair, And I promise I'll be nice to you if you let me play with.
You definitely want me in your game area, that's for sure.
You are very aggressive.
Do you use.
Game theory in any way in decision making?
Yeah?
So, I mean probably the easiest one to talk through is like the two for one is a pretty easy sort of game theory problem. No one's really gotten to the extreme game theory. But it's coming. It's definitely coming. So two for one, just for your audience. There's a twenty four second shot clock in the NBA. If you have the ball, let's say forty seconds or thirty five
to forty seconds. You can either run your normal offense and get a shot in twenty seconds and now there's fifteen remaining, so you get one shot and they get one shot, and or you can take a shot quickly and then the other team only it's went for second, so you'll get the ball back.
Well, it turns out in thousands of thousands of.
Trials at every level of basketball, this is going to shock your audience, which I'm sure is pretty sophisticated. Two shots are better than one shot. I know, I know that will surprise people. But even even even materially worse, two shots are better than one shot. There are some exceptions in the fourth quarter and things like that, but
but in the first three quarters it's pretty straightforward. Well, obviously, if the other team says, okay, I'm gonna shoot such that I force you into the two for one, the other side isn't just this blod you know, undynamic opponent, they can then shoot even faster, faster back at you. In fact, the Utah Jazz when Jerry Sloan was there, would do this more than any team.
That I can recall. And then so now.
There's there's a whole set of other strategies that if they somehow manipulate the clock better than you, you can then regenerate the two for one like fouling them or being super aggressive to speed up their offense.
There's a whole set of things. So that's just one off the top.
Obviously, there's game theory and in in game in terms of like how do you react to you know, they put five out shooting lineups on the floor, how do you guard that?
Things like that, So, and what about when you're making roster decisions, when you when you're thinking about trading, and when you actually have to think about yourself as one player in a multiplayer game because there are other yous out there who are responsible for other teams who are going to be making different moves and responding to you. So how do you think about it off the court in that kind of that metagame?
That's right, and it's a heavily repeating game because you know, it's the same thirty teams. What's really interesting is it's a heavily repeating game, but they can replace the key decision maker, So it's actually a repeating game at the ownership level more than it is at my level, where people can get fired. So there have been such sort of these famous examples of people, you know, making future promises or things like that that they then try to
duck out of and things like that. So, yeah, we're in a repeating game that can work to advantage if you treated as such. Again, your audience probably probably pretty familiar with like whether non repeating or repeating game type differences.
So so NBA teams place an extremely high premium on superstar talent, especially in the short term. You know, the New York Knicks. What they give up for bridges like four or five first round picks and he's a good player, but probably the third best player on a contending team.
Are gms too short term focused because of the incentive issue, or are like analytics nerds doing the math wrong and saying, actually, these draft picks are not that valuable, and superstars are very valuable because if you run it through some model, it's like, okay, well, the draft picks worth like, you know, twenty five million dollars a year in excess returns, and Bridges is underpaid by ten million, And I don't know, you know what I'm saying.
Yeah, I think teams are basically wrong at both extremes.
So they're both not aggressively long term enough. You probably like if you actually run the math and you just say that you're optimizing you know, p you guys talked about p doom on your list the p P Championship over three years, if you actually were just optimizing that variable, and I can promise you no team actually does do that really like twenty something like twenty four of the team should be fully rebuilding, just long term every year, because if you don't have a top five player, your
odds of PEA Championship are extremely low. So it's so I would say, you know, that's sort of the first thing.
The second thing.
I just just wanted to set up the for people to quite understand why the superstars are so important and why it's important to sort of save your assets for those moves. I think the easiest way I describe it as take show heyo Tani, you know, the best hitter in baseball, now, when show heo Tany hits a home run against the Mets, he then has to wait eight more times before he gets to hit again. Basketball is
like show Heyo Tany. He comes on the floor, hits a three, and then when he comes on the floor again and he goes like, I'm still the best player, so I'm shooting again. So just imagine show Heo Tany being able to hit every single time with sho heyo Tiny's on the base. So that's what you can do in basketball. It's actually gotten worse lately, and this will be a little bit for the NBA nerds, but because a lot of these players who are so great can
only be guarded by switching, pick and roll. So pick and roll is one of the staples of our sport. Basically, someone knocks your man off from guarding you.
Simple. The easiest way to guard that, but one.
That hadn't been used because you can end up with seven feet people on six foot people is you just switch the screen and that the person who gets hit stays with the guy that they were hit on and the other person switches. So the smart NBA players you know, see that now and they they can basically screen and decide who guards them. So now imagine show heyo, Tony not only bats every time he's up, he gets to select the pitcher on the other team he gets to
go against every time down the floor. So and now you understand why you know someone like Lebron James can at his peak be worth thirty, like close to thirty wins on eighty two games, like an insane impact that is not even closely replicated in any other sport. So back back to original question, Nate, which now I feel like I've gone far afield.
But it's a podcast.
The entire is that, how it works, how we're it is it is.
Yeah, yeah, that did I answer your original question?
I feel like I didn't, Well, because you're famous for having this kind of in fantasy basically called the stars and scrubs yep. Approach, Like not to denigrate the back half of the current seventy six ers roster, but like they're all they're all a minimum, salaries are just barely above minimum. Is that partly because you think that you can actually get the average talent instead of replacement level talent?
Yeah, so I think that becomes a linear This is the this is the geek podcast, so I can geek out of it. It becomes a linear it becomes a linear programming problem. So the most efficient spending in the league are on minimums and draft picks who are playing above their above their weight, essentially where you can they can be worth double or triple while you're paying them. The problem is you can only put about eight players on the floor, so you can't actually fully capture that efficiency.
Like if I could put sixty draft picks or minimum players that I've carefully selected that are worth more than I'm paying them, I could, and I could do that, I could win the game. But unfortunately you're only allowed to put five on the floor at a time, and only really eight even play, usually especially in a playoff series. So when you look at the how do you like
generate the most wins? Even a even a player who is just worth his salary that's highly paid, is actually more important than these players who are worth double or triple worth they're paid at the minimum. Then on top of that, because of the mac salary, often the top player you have is not only paid the most, but also worth quite a bit more than what you're paying them.
Because of the dynamics I said before, which is so yes, I really really love good players and I can't get enough, and people talk about it, but the reality is, like USA basketball, what works?
I mean, yeah, if you.
Get lots of highly skilled basketball players together, it generally works really well.
How do you factor in kind of the uncertainty factor when you're when you're in a game of individuals and champions, right when you're dealing with people who are superstars? How does your thinking work or do you just kind of not even think about it in terms of injury and that risk probability? Where right? If you actually, like, if you invest everything in one superstar and like game one should happens, Like, how do you think about that.
Because the superstar happens to be injury prone? Hypothetically hypothetical.
Yeah, it's very analogous to the starting pitcher issue that baseball teams have.
But just multiply it by ten again.
Again, if we were trying to just be the fifth best team, then it would become a much harder problem because then the trade offs of injured superstar comes in. But because you're trying to be the best of thirty, you have to buy risk all over the place. And it's really just like what risk are you buying? Are you buying risks that they're not good enough? You're buying risks at their bad people and they'll create off the court.
Are you buying risks that they're injured all the time, or are you buying risks that they're shot might might fall apart?
Like what risk are you buying?
Because if if you're not buying risks, you're not going to win, right you have, Like beating the SMP by three to five percent is not winning you the title. So I tend to like buying injury risk because when if if it all hits together, you have a team that can win, I'll take I'll take that over a player who's twenty percent worse but available all the time. And I'm pretty sure the math depends out on that.
You know.
I tried that for my fantasy basketball league last year. I had Embiid, I had Personius, I had John Morant, right Cade Cunningham, all these injury risks, and it totally felt on in his face. I was the worst team in the league so far.
I can't believe, like you're arguing with the anecdote, Nate, I can't. I can't believe it.
Well, Nate, you read Nate's book on the Edge, and and we talked about this on the podcast, But Nate bet over a million dollars on sports for for research in one year, and Nate, can you remind me how much you ended up winning.
At one point eight million dollars on the NBA and this is not.
He bet. He bet one point eight And how much did you win?
Five K? So if you do the math, that roughly equates to per hour. Do you need to like working at KFC after taxes and even before taxes?
Yeah, Maria, how are your poker winning?
Since you're getting on Nate for his UH for his UH sports wagering.
They're good, They're good per hour. You're looking better than night. Okay, that's good.
Yes, they were better than Nate. I had a horrible summer at the World Series during the Summer Series and was down over one hundred K, which is not good, and then went to EPT Barcelona where I had a score for almost one hundred and forty thousand, which put me in the black for the year, and then went on to you know when when the bracelet last week have an eighth place finish in another bracelet event, so and I have a few other deep runs. So so now I'm now I'm doing more than a five k
in the black to be fair. To be fair, I don't think I've had one point eight million dollars in poker buy ins in my entire history of playing poker over the last five and a half years, however long I've been playing.
So I'm just actually running a long con on poker on Nate. So we're going to do it.
You're a hustler, Dearly.
We're doing like we've done like ten events together, where he sees how aggressive I am and then I'll just tighten up when he when he's shoving on me one of these times.
Speaking of all In, you had a very aggressive strategy. Uh this summer where you cleared out all your salary cap space and then you traded for is a sign and trade. You just signed him out right.
Just signed out right, Yeah, which is rare, super rare.
Signed out right, which is rare. The superstar, our superstar adjacent player named Paul George's a two way player, superstar player.
Top top. I mean, I don't know, he's top in the league.
Come on, he's a very good player Paul George, who compliments your existing roster. Well, I mean, did you think you had a reasonable chance of I want to get you in a tampering situation? What was Plan B if Paul George hadn't become available.
Yeah, we didn't love Plan B.
Well, to be to be clear, when we started off on that plan, there were several plan as they just you know that they're you know, they sort of faded their A one, A two, A three, A four, But they faded over time, as you know, different things happen, different trades, different happiness with team, things like that. We felt quite confident this was our best strategy. But I
would say it's not to be recommended. I really don't think people have tried to like write, oh, this is like a new way to do things.
I really don't think. So.
We we given our team, given how our contracts laid out when I came to Philly into twenty twenty, this we thought was the right approach. But it could have we would have been doing what I was talking about, like sort of a waiting move again if we were into Plan B, where we were doing moves that could be flexible down the road. If the you know, the next Paul George became available. But this one obviously there's just any move because you know, again, only one team wins,
so the math is horrible. But we ended up sort of on the We ended up playing. We had sort of Maria's arc there. We had a last season was sort of our you know, we lost whatever we didn't we.
Didn't have a great year.
And then you know, then we you know, sort of got the front office bracelet and that.
We were we hit on the sort of high end of what we were hoping to do this summer.
We'll be back right after this.
M H.
What are the incentives like for regular season versus maximizing championship potential? So you have a undoubted superstar Joel Embiid and you listen to all the NBA podcasts and you're like, we think that Joel embiid Is should rest more in the regular season. I mean, do you AI, do you have a plan and be philosophically, what are you trying
to maximize? Because if you're bringing your thirteen year old daughter to the six years game and buy some nice seats and it's who's your backup, it's on Obamba, who's your you know, Andre Drummers. Yeah, come on, man, I mean, you know, look, it's a drop off, I'd say an excitement and.
Right now drop off.
He keeps trying to do things like Joelle in the preseason, which has had mixed mixed results. But we love, we love Andre. He's definitely gonna buffet when Joel's out. Look, I mean, we definitely optimizing for the postseason. A lot of the analysis you see out there aren't isn't very well structured. They they do all these hyper correlated analysis, like.
Oh, teams in the top four, the ones that win.
You know, well, yeah, if you happen to get if the Warriors had gone through a year when they had Kevin Durant where everyone was hurt, but then they're healthy for the postseason, I'm pretty sure they're gonna make the finals or win it that year.
So you know it.
For us, it's like, if there's one guiding principle, it's just it's the players stupid, Like it's just get the best players. And the analysis I talked about before of Shoheo Tani, it gets even more pronounced in the playoffs because players go from playing thirty to thirty five minutes to forty to forty five minutes. Rotations shrink, so all the impacts of star players actually again goes up. Superstar players are also the player Everyone gets worse in the playoffs.
When I say.
Everyone, I mean on average everyone, some some get better, but in general everyone gets worse as the competition level goes up. But superstars drop the least, so they get they they don't fall as much as pretty much everyone else.
So and there's not much advantage to I mean, if you start as a seven seed, then it's not actually that harmful, right.
Seven has become a little more harmful because the playing.
Oh you're in the playing Yeah, so six six six.
Is fine because yes, you know, a seven game series.
Where you're one more on the one more on the road.
It turns out to be not I think that's a pretty small swing in percentage.
I think it's like two to three percent. It's not massive.
Why did the NBA get religion on analytics before after baseball, I suppose, but yoube not that much.
In oh, I think even at the league level.
I think before they were the first to do a lot of analytics on the business side that was shared with teams. So I would say the NBA was sort of for the teams on baseball were before the teams in basketball. But at the league level, I think I'm pretty confident the NBA was first.
Yeah.
So my Pitt theory is that, uh, this is because the NBA tends to attract new money owners. So people in financezer tech who not some old magnate of some shitty beer company. You're not to demean by the way sponsor us Bush Bush and bud Light. We went your sponsorship can advertise your hard Seltzer produce.
One of the top agents in basketball is like the nephew of the Bush Anheuser Busch empire.
So but yeah, no, I think you're one hundred percent right. In eight, the.
Owners both the price point and you know, the sophisticated owners who were buying in in the late nineties through the two thousand to twenty ten, twenty fifteen range, they all sort of saw the NBA getting more global, getting bigger, They saw baseball declining, They saw the cat like the cap system in the NBA has better, and so yeah, all the sophisticated owners came into the NBA, I think before pretty much all these other major leagues.
Yeah, when you're watching the game, would you say you're I know the answer this question, so don't lie. Are you relativelys in when you're watching a game?
If I'm watching, I'm very nods in? You know. That's why I know it make a terrible coach. I spent.
I even have a formula sadly for when I go nuts, and it's it's it's basically just like when the win probability of either a game or even a play goes way up to where you start as even a probabilistic thinker, you start to go to one instead of point nine you know in your head, and then it doesn't happen.
For especially if it doesn't happen for some really dumb reason that could have been prevented, it gets Yeah, that gets really annoying and hard given how much time and work and effort goes into things from the front office, from the players, from everything. So example, you know you're up twenty five in a playoff game, you know that, and you lose it, that gets tough. Or you know the small ones which are done, which is like breakaway.
We get a steal and it's a breakaway and the guy like you know gets fouled from behind, but they don't call it, you know that, Like that kind of stuff just throws me for a loop. It makes no sense, but it does. Yeah, I'm very zen when the when the odds of winning drop very low, I just sort of like try to like learn things at that point.
So that's called fatalistic nun zend.
Yeah, I call pessimistic optimism. That's my it. Is it called fatalistic or nihilistic?
Yeah, at that point when you're like, Okay, there's just no way in hell this is happening.
So so what would be the poker covent?
Like you're in a hand that you're you're pot you're heavily pot committed, Like the right strategy is still to stay in the hand even though your odds of winning it at that point, you know, have to be like twenty percent or something like that.
No, I mean, I think I think in poker, you know, being done is quite important. And I would say there's no situation where your pot committed and you have to stay in the hand if you think your odds have dropped to twenty percent, as long as you have any chips behind, you can always fold. And I think that
that's really important. And I think that people who get too emotionally invested forget that, they forget that you are always allowed to fold, and they get to this point where like, no, but like this was supposed to go this way, and so they like end up putting those
final chips in the middle. And I've done that, and I've written about doing that, and it's a horrible feeling, you know, when you like, either when someone else goes you into it or when you god yourself into going broke even though you like you knew that you were maid.
Yeah, and so on your trip sixes or whatever it was to knock you out of the World Series at place eighty seven, how were you, Darrel?
You're gonna bring that up? Is we should talk about els? The twenty seven consecutive miss three pointers.
We all name this.
We don't name its twenty five because the league report after said they followed this on two. So the official the official record for me is twenty five misses. So so, well, you asked how ZENI was, so it seemed to bait.
I mean, you don't really actually a little bit ambiguused. You don't really have any influence over the game. I've talked about this before. What are you allowed to communicate to other people that are on the floor during the game.
So it's actually even gotten more ridiculous.
So they they at first the league, even when I first started league, like two thousand and four, I joke with them in a very you know, geeky nerdy way. Unfortunately, they they banned electromagnetic signals to the bench, like you couldn't text anyone, you can't call any common well it was all data calls by.
Then, so but you could still.
I could still sit behind the bench to rows and yell to my So vibrating molecules are fine for communicating, but electromatic signals not allowed by the league, which to this day I believe that's the rule. But then they made it even worse. This year they passed a ridiculous band on anyone using cell phones forty five minutes before the game till after which we'll see how that goes.
But yeah, I can still sit behind the bench and yell to my hearts content and hand signals, yeah, smoke signal like the popes use.
We can do that. We have lots of yeah that that we can well, no, it's electric. Oh, shoot, I screwed up.
We're allowed to use the electromatic spectrum in the visual range. I'm sorry, So we can use the ones our eyes can see. We're still to use, but all others are banned. So yeah, So I to answer your question, I don't have much impact. Sometimes there's some halftime things where I'll mention something, but our coaches are very good. It's never anything relevant that would change the outcome of something.
So are there examples of where the nerds have gone too far? Things that were kind of superficial conclusions based on the analytics?
Yeah, I mean hot hands, the easy one.
Yeah, I think anyone who played which I did play, that was, you know best suppose my sport I wasn't very good. I can play at the pro level, of course, but you do sort of get that feeling of muscle memory and all that. The hot hand was thought to not exist, mostly because they didn't factor for people who think they're hot shooting really hard shots. So once once you adjust for that effect, there is a hot hand effect.
That's one I think. Gosh, there's got to be a bunch like.
I mean clutch performance. You are the former possessor of Ben Simmons's NBA playing rights.
Yeah, I think that one's a tough one. No, they're you just never have enough end to confidently say.
But for sure when people look back, they can show player X or Y was more clutch and high leverage moments, but no one's been able to show that they could predict that.
You know X post So clutch is a good one.
And we'll be right back after this break. We're going to try to wrap up in the next few minutes.
To Nate, though, I have to call it Nate yesterday, please.
So Nate, being a very good Chicago crad, assumed efficient market theory is correct, and he managed he managed to stumble into like one of the areas of which there's thousands of papers where it's not correct, and there's lots of hypotheses and even some leading hypotheses it's not. So he took an anti momentum stance. And to be clear, you have to get very very geeky and say, like, yes, there is a it is mostly a random walk from day to day, which I think you mentioned the stock market.
We're in the stock market, but you use like the stock market is a proxy of live momentum can't exist in political markets or probably doesn't exist when momentum is for sure a factor to use the quant So ray I whand ask you who used to run quantic gold sacks, and I, you know, I have a lot of money in that factor because it's worked for one hundred years, hundreds of years. And they think that momentum is a real thing in the stock market that you can trade on, even though everyone knows it.
It breaks every for a couple of reason.
And one they think that there's a lot of papers when people are slow to react to information, so you know, there's some news and people don't at the beginning to realize how big that might end up being until multiple days later.
So so of course you can be wrong.
But again the the the overall bet is the momentum does slightly work and you can trade it. The second one is that there are these you know, to use a there are these whale insiders that move markets, and you're basically free writing on their information when they when they first make those first make those bets. So those are two of the reasons.
So number number go up on number.
If done very characters sophisticated, I would I would definitely recommend that both of you put some some percentage of your of your wealth and a momentum stock because it's you know, it's similar to do you know about the long shot and gambling? I'm sure you do, They ain't sure. So people don't like to bet sure things. They like
to bet long shots. So because of that, the sure things have this long, long history and it still exists if they let you put any money down, it still exists that if you bet the favorites and you bet that with enough money that you can that you can you know, overall win essentially, and I know people have funds that do exactly that. Oh there's one last reason
they think momentum still exists. It's that's because people hate losing their money, right, And there's a fatter tail on the downside of momentum then there is on an upside.
Does that make sense? So, so you you're.
More likely to lose big with momentum strategies in certain in certain market.
Environments than others.
But over I hadn't thought about that.
But over time it absolutely wins over one hundred years plus.
So yeah, yeah.
Well can I ask so given you just got a crash course in quant momentum is there any I would think one of those fits that that if people are betting heavily on Trump or or or Kamala, that there may be signal that the market hasn't picked up yet.
Could I am skeptical about empirically the betting markets under preform, okay, under from polling based methods.
Got it? I mean it's weird. Let's say just polls. Can you is their momentum to polls? The potentially there's a good question.
Yeah, I mean it's you can get these feedback effects and it's some question as to whether they're real or whether they're fake. Right, But like in principle, can it has a good poll that that gets good media coverage, which gets more polling, But then quilibrium kind of shifts because people get bored and now expectations are higher, so you kind of wind up with like a sine wave pattern. But yeah, no, I mean it's it's a lot of things where to a first approximation, ignore the hot hand,
ignore momentum. Then you start studying and it's like, okay, now we're advanced enough where we have to think about the second approximation and a third order effects and so forth. And and you know, the sophistication of the NBA now or of Wall Street or a poker are such that, like you do have to take into account the edge case stuff sometimes.
Can I ask him, Maria, because you're probably the best poker player on here is my guess.
How much do you are winning the World Series of Needles?
Do you.
What is what is the meta? Like do you have to train with like a solver all the time or do you just play a lot? Or how do you get reinforcement learning? Yeah?
Yeah, I think these days, because the solvers are quite good and there are really great ais that you can play against, I think that that's actually quite important, so that you can get that feedback and see what the
optimal strategy would be. And then it's like with everything, right, that's your baseline, and then you absolutely deviate, right because the people you're playing against in large field events do not play like the solver, right, unless I am playing like the ten best players in the world, Like, they're not going to be playing optimal strategy. And sometimes they don't even understand what optimal strategy is in the sense that like, so aren't.
There mix is? Aren't there mixed player simulators.
Or yeah, yes, well no there aren't there There aren't unless unless what you do. So you can play around with the ranges, right, This is like any algorithm, garbage in, garbage out, yeah, right, and good stuff and good stuff out.
And so you make assumptions about hand ranges before you before you do any of this, before you run sims, before you kind of do a hand deconstruction where you say, I think the player in this position is open these hands, right, and I think that this player is playing these hands. And you can be right or you can be wrong.
But there's a thing called node locking, which is something that you can do when you mimic bad players, right, So you can node lock it to say, okay, no, you're telling me that the correct thing here is to raise, but I'm going to say that this person never raises, right, So I'm going to node lock. It's not an option.
I've been node locking my whole career. I've been node locking.
Then, so then you can see how the strategy changes. So you can play with the solvers to show you how to deviate against specific opponent types. But you know, as Nate said, like when it comes to when it comes to anything like it can be dangerous, like you need to make sure you really understand the baseline and that you really like have the ground strategy really solid, so you have to do both. But these days I do think you need to use the solvers and the
analytics as well. So I think that's important, and I know that we're basically out of time, Nate. Between you and Darryl needling each other, it was definitely a nice reality TV edition of Risky Business. So I hope everyone has enjoyed that very much. And I've loved being I've really enjoyed like just being a fly on the wall for those back and forth exchanges.
I love it.
Let's let's do it more, Daryl, We'll have to have you back.
He resisted any Nicks zings. Thank you name, Darryl.
I mean, I look, it was a great series. You guys fought hard. You guys fought hard. It was an excellent basketball series, and as a Knicks fan, I was happy with the outcome. So thank you for that and thanks for coming on.
Thanks Thanks Branda, thanks for that.
Let us know what you think of the show. Reach out to us at Risky Business at Pushkin dot FM. Risky Business is hosted by me Maria Konnikova.
And by me Nate Silver.
The show is a co production of Pushkin Industries and iHeartMedia. This episode was produced by Isabelle Carter. Our associate producer is Gabriel Hunter Chang. Our executive producer is Jacob Goldstein.
If you like the show, please rate and review us so other people can find us too. And if you want to listen to an ad free version, sign up for Pushkin Plus. For six, ten and nine a month, you get access to ad free listening. Thanks for tuning in.