SkilL vs. Luck: Euro Final Penalty shoot-out Edition
A lot has been written already about the Euro Finals two days ago with England losing (again) the final penalty shoot out. To be honest, I was supporting Italy in the finals because I think the showed the best performance in the tournament overall, with a refreshingly “un-Italian” way of playing attractive offensive football.
I don’t want to repeat what has been written in the English press on who and why has to take the blame for missing the penalties. However I want to focus on what the coach, Gareth Southgate said when he explained the choice and the fact that two of the penalty shooters were just brought into the game at the very last minute.
Personally, I thought at first that it was a pretty bad idea to let players shoot that did not really play in the match but this is what Southgate said:
“I chose the guys to take the kicks. I told the players that nobody is on their own in that situation. We win and lose together as a team. They have been tight throughout and that’s how it needs to stay. It is my decision to give him [Saka] that penalty. That is totally my responsibility. It is not him or Marcus or Jadon. We worked through them in training. That is the order we came to
“To get all those attacking players on you have to do it late. It was a gamble but if you gamble earlier you maybe lose in extra time anyway.”
So Southgate and the English team did something very reasonable: They trained penalty shots and Southgate made a list on who performed best and then “executed” the list. He brought in the two players so late because the game as such did not need their presence.
A lot of commentators argued that a training situation is not comparable to a final with 65000 spectators, on the other hand I would counter that with the question: Why would you give the responsibility to someone who doesn’t even perform well in a training situation ?
What Southgate did in my opinion was the following: He clearly increased the odd for England by bringing in those players who did best in training but even (slightly higher) odds doesn’t guarantee success in one particular penalty shoot out. There is so much luck involved (and the skill of the opposing goalie) that there is never any certainty of winning a penalty shot out.
However, if they keep doing this, it will for sure increase going forward the ratio of winning a penalty shoot out which is the best you can do in increasing the probability of a big victory in a future tournament.
Now why do I write about this in an investment focused blog ?
I guess some readers have already spotted a similarity: When you buy a single stock, there is a lot of luck involved on what happens in the future. I do believe you can increase the odds of a successful outcome by doing a thorough analysis but this is not a guarantee for the success of a single stock idea.
It can be especially frustrating if you see people making money with “hot stocks” or crypto coins that they bought without any analysis. However, in contrast to football, picking a new stock is a much more frequent event and increasing the odds for each of these events will in the long run lead to superior performance.
It needs to be seen if England keeps Southgate and if he will have the courage to continue to pick players that do best in training independent of age or experience, however as an individual investor, being fired is fortunately not a risk, so one can and should continue to work in a way that increases the odds and not decide based purely on “gut feeling”.
More research / statistics:
It should be noted, that according to some research, it really matters who is winning the coin toss to shoot the first penalty. Several studies, for instance this one, show that the team who goes first has a 60% chance of winning the penalty shoot out. There is also research that shows that for instance the best 5 shooters should score in reverse order of their ability etc. etc.
Statistically, over a long period of time, England indeed has a lousy percentage of winning penalty shoot outs with only 17% wins compared to for instance Germany with 71% or Argentina with 73%. Interestingly Italy used to be pretty bad in penalty shoot outs as well, but they won two in a row in this tournament.
One aspect that to my knowledge hasn’t been analyzed that deeply is the ability of the goal keeper. Germany has a tradition of really excellent goal keepers (Neuer, Kahn, Schumacher, Maier etc.) and a really good goal keeper could improve the odds significantly. The English team in contrast was never really famous for their goal keepers, so maybe this plays a role as well. In the finals, both goal keepers managed to defend 2 penalties each, so England seems to have improved here as well.