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.


  • There is more research on penalty shootouts – cannot find the source but remember some findings:
    – Leftbacks have a bigger miss ratio – but you Germans have Andreas Brehme!
    – A player posing the ball and then turning his back to the goalie is more likely to miss than a player going backwards facing the goalie
    – Teammates making lots of noise at the halfway of the pitch are on average in the winning team

  • You’re right… Southgate made the “right” decision, based on process, etc. But maybe he should have consider a few other factors is his decision making framework – not only performance during training.

    And that’s the beautiful in football.

    I don’t think rules apply much in football like the law of large numbers.

    Trying to make it like Moneyball type of approach in a knockout format in football… nah, it won’t hold water for me.

    It may work in a league format, like Barcelona, Man City, Bayer have proven in the last decade but in a knockout format usually you don’t have the time to mean reversion.

    Sorry too much diversion from investing. 🙂

    • I am 100% Ok with the English coach to select based on different criteria, especially if this increases the odds for their future opponents 😉

    • the law of large numbers always holds. But it is a law that says something about how infinite sequences of random numbers behave.
      Of course, you still have a very high chance of losing on a single event, no matter what you do. But in the theoretical scenario that you repeat the event infinitely many times, you will win more often if you base your decisions on knowledge rather than pure feeling.

  • Support for Italy after kikcking out Turkey in the previous round was the most logical option for all European democrats !

  • The trainer’s decision was based on training performance – not experience, not their mental strength in front of a stadium and a nation of football fans, not on the obvious strong performance of their opponent‘s huge goalie. In other words: not on the situation. He took a gamble and hoped.
    He might have helped his team nor loosing their nerves by not letting young and inexperienced players shoot penalties in a row. I don‘t know how you could translate that into investing . 😉

    • As I have written in the post my answer is as follows: Why (the hell) should Southgate have chosen players that can’t even score a penalty in a training situation ?

      Yes, from a “gut feeling” perspective, nominating inexperienced players seems like a mistake, but the decision in my opinion is backed by “real data” and therefore very much transferable into investing.

      • I am not sure he said the others can’t even score in training, but the ones he selected performed better in that environment.
        There is still a huge question mark regarding how well players perform under significant pressure, which could probably be better assessed with older players. As discussed in this article, Italian players had much more experience striking penalties in official games:
        I believe this is a more robust set of data.

        As for the investing parallel, you could also argue that you should select stocks that you understand well enough to be able to make the best decision under duress, like if something goes wrong. So it goes back to one’s circle of competence.

  • And Illgner of course (see penalty shootout Germany-England 90) 🙂

  • You missed Köpke in the list of great german goalkeepers (see penalty shootout Germany-England in 96) 🙂

  • Nice post with a nice intro. I have to think about a section of the book Thinking in Bets where the coach made a (rational) decision for the teams last move, well based on statistics and facts, but bad luck strikes and the team lost. Of course all the media and fans ‘knew’ it was a lousy decision after the outcome^^
    Disclaimer: As a European I have the feeling I should learn about football to understand so many analogies from investors better

    • The only analogy I can think here is in relation to some Latin American players such as Maradona and Romario who had a reputation to not care much about training (preferred partying). Romario once said that “training is training, a match is a match”.

      Translating to investing would be… investing with “play money” / “fantasy stock apps” is not the same as investing with your hard-earned money in real securities.

      Training shoot outs in a controlled environment is not the same as in the finals, at home, etc…

      Merely selecting players based on training performance seems to be too simplistic.

      Anyway… in 1994 Baggio was probably the best player in the world at the time and missed the penalty badly.

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