by NorthCoast President & CEO, Dan Kraninger

“Your biggest opponent isn’t the other guy. It’s human nature.” - Coach Bob Knight

With 43 years of coaching and over 900 wins under his belt, I’m inclined to take note when Bobby Knight talks about what it takes to win in March. It’s easy for me to see how emotions like fear, conceit, pride, and anxiety can creep into locker rooms and prevent teams from reaching their ultimate goals.

It’s the same thing that I’ve seen come between investors and better returns for my nearly 22 years in the asset management business. I feel lucky that I discovered this truth early in my career and was able to focus on uncovering profitable investment systems vs. trying to fine tune my own acumen. I have zero doubt that discipline and consistency will outperform my own instinct and intuition over time.

Interestingly, this parallel between basketball and money management also extends to filling out NCAA brackets. Emotions and bias run rampant for many when completing their picks— overconfidence, school loyalty, and even uniform colors often play a role. Only 273 people out of 11.6 million people who filled out their brackets on ESPN correctly selected the first 16 games of Day 1. That’s .002%.

Well if you ever want to approach this endeavor with less madness and more method, take a look at www.fivethirtyeight.com. Founder and editor, Nate Silver, a statistician who was made famous by the accuracy of his November 2008 presidential election prediction, looks at the world through a mathematical lens and for the last several years his NCAA model has accurately predicted each game winner with a 70% accuracy. His model takes seven metrics per team into consideration and includes many commonly referred to measures such as BPI and AP ranking. The beauty is the model’s simplicity and his success comes from his willingness to relent to the system and discount his own predispositions.

I’m proud to say we 100% share his view on the usefulness of models when it comes to managing money. I only wish when it comes to basketball, Villanova didn’t have such a stranglehold on my heart and my bracket.