After betting – and profiting on the subprime mortgage crisis – Goldman Sachs decided it was time to start betting on sports, particularly the World Cup.
In a 60-page report that the multinational investment banking firm calls "an unnatural mix of football and economics," Goldman Sachs is putting its money on home nation Brazil to win it all come July.
Using a number of factors based around the projected number of goals a team will score in a game – including past results and home field advantage – Goldman Sachs has Brazil beating South American rival Argentina at the Maracanã on July 13.
“To be clear, our model does not use any information on the quality of teams or individual players that is not reflected in a team’s track record,” the report states, according to the Wall Street Journal. “For example, if a key player who was responsible for a team’s recent successes is injured, this will have no bearing on our predictions. There is also no role for human judgment as the approach is purely statistical.”
The firm has Brazil beating Germany and Argentina beating Spain to get into the finals. Goldman Sachs predicts that Brazil will move easily through the tournament, with Germany giving them trouble in a 2-1 Brazilian victory in the hypothetical semifinal but an easy 3-1 win against Argentina in the final.
It also has some bad news for U.S. fans.
While forecasting that the red, white and blue will draw both Ghana and heavily-favored Portugal, it predicts the U.S. will lose to a very strong German squad and fail to make it out of the knockout round. The always pressured English squad is also expected to fail to make it past group play.
“The USA were drawn into Group G with perennial power Germany, a dangerous Portugal side featuring FIFA world player of the year Cristiano Ronaldo, and a Ghana team that has eliminated the US team from the past two World Cup tournaments,” the report said. according to Sports Illustrated.
According to the forecasting model, Brazil has a 48.5 percent chance of winning the World Cup on its home turf, with Argentina holding a 14.1 percent chance of bringing back to Buenos Aires the coveted trophy. The U.S. sadly only has a 0.5 percent shot at winning, Goldman Sachs reports.
So they’re saying there’s a chance!
Also, Goldman Sachs forecasting is not prophetic as the firm also picked Brazil to win the 2010 Cup in a match against Spain, which won after beating the Netherlands in a close game.
The firm also put together a “Dream Team” side that included a front three of Brazil’s Neymar, Argentina’s Lionel Messi and Portugal’s Cristiano Ronaldo. Brazil’s Thiago Silva and Dani Alves also made the team along with Spain’s Andrés Iniesta and Sergio Ramos.
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