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Pragmatic Capitalism

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Jake Locker, Randomness and Outcomes

By Robert Seawright, Proprietor, Above the Market

I often write about the relative importance of luck and skill in various endeavors, including sports and investing (here, for example) and how the outcomes in such things — heavily influenced by luck — can cause us to miss important aspects of the process involved, which is much more important in the long run (for example, here). This past week’s loss by my San Diego Chargers to the Tennessee Titans provides a terrific example of how these things work.

Titan quarterback Jake Locker is 2-1 after three games and has thrown zero interceptions so far this season. He also led the Titans on a 94-yard drive for a touchdown to beat the Bolts as time expired (against a very soft zone defense — arrrggggg!).  However, Locker’s overall statistics this season are virtually identical to last year’s mediocre numbers when the Titans had a blah 6-10 record (as Grantland’s Bill Barnwell has carefully pointed out). Is he much improved or not?

It’s too early to tell for sure, but the following play (courtesy of Bolts from the Blue) offers one good data point and a helpful jumping off point toward my still quite tentative view that the overall statistics may be a better gauge of where he is than Locker’s won-loss record and lack of picks so far this season.

gilchrist

 

Wow.

Marcus Gilchrist of the Chargers flat-out drops an interception with just seconds left in the game that would have secured the win for my guys. It isn’t on the level of the late-game Marlon McCree post-interception fumble that cost the Chargers a 2007 play-off game to New England (I was in the stands for that one), but it’s still pretty bad.  Obviously, the play isn’t Locker’s fault in that he hit Delanie Walker in stride and Walker tipped the football straight to Gilchrist. But think for a bit what this play demonstrates.

If Marcus makes the pick, the outcome (Titans loss) could cause us to conclude that Locker isn’t really progressing.  We’d think that he could only score 13 points at home against the Chargers and couldn’t get it done in the two-minute drill. But since Gilchrist dropped the ball and the Titans went on the win, we may now forget that Locker badly missed a wide open Damian Williams in the end zone just before the game-winning play, didn’t make a great throw on the final play (although it was pretty good) and that Locker was just 2-for-11 on throws that traveled 15 yards or more in the air for the game.

These events provide great examples of how outcomes can disguise crucial elements of the process that — together with a significant amount of randomness — dictates those outcomes.  For example, the Gilchrist drop shows how and why players who outperform for a given stretch tend to regress toward the mean. That’s also why, despite the sample size being much too small to be sure, a lot of talent and, as a very young quarterback, a much better chance of significant improvement than more seasoned pros, it seems more probable that Locker is the player we thought he was last year than a budding star, despite some very good outcomes to this point in the season.

Robert Seawright

Robert Seawright

Robert P. Seawright is the Chief Investment & Information Officer for Madison Avenue Securities, a broker-dealer and investment advisory firm headquartered in San Diego, California. Its focus is the capital markets and personal finance from a data-driven perspective.
Robert Seawright

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