COLLEGE LINE MOVES -- HOW SMART IS THE PUBLIC?
Here are two questions
for you. What do Arizona State, Maryland, Mississippi, Mississippi State and Texas
A&M have in common? And what do Kansas, Stanford and Washington have in common?
The first group combined for an imperfect record of 0-20-0 vs. the line in 1998 had
you followed so called 'Smart Money Moves.' The second group had a nearly perfect
record of 9-0-1 vs. the line by following the Smart Money Moves in their games.
Okay, so just what are we talking about?
For years we've heard about the concept of 'smart money'
moving the line by a significant margin from the opening line. It has often been
thought, if not presumed, that these smart money moves were signs of someone, or
a group of people, having so-called 'inside information' that caused the major line
move. Or in other cases the thoughts may have been that the linesmaker had made an
obvious mistake in setting these lines and now the smart money was correcting that
obvious flaw. In either case it has been generally believed that these smart money
moves were invariable correct and that by following the smart money the players could
On an almost consistent basis from year to year the inevitable
results are that, as a whole, the smart money is no smarter than the rest of the
general public. Often it has been profitable to go against the smart money, but in
most cases either following smart money or a going against smart money has been a
What we've assembled in the following chart is a listing
of how every college team currently on the betting boards in Nevada have fared in
games involving so-called 'Smart Money Moves'. We show each team's record of having
gone with or against such a move. The chart covers 1990 through 1998 and shows the
totals for the nine seasons with the percentage of moves that turned out to be correct
moves. You will be able to see easily if the public had a right or wrong perception
of a team during this period on a team by team basis as well as overall. Over 2500
'Smart Money Moves' have taken place over the nine seasons.
For purposes of our review we have defined a 'Smart Money
Move' as having occurred any time there was a difference of at least 1 ½ points between
the Opening Line and the Closing Line. The lines posted at the Stardust have been
used in determining the amount of line movements. For example, if a game opened at
Team A favored by 6 over Team B, and the line closed at Team A favored by 8 ½ over
Team B, we considered this to be a smart money move of 2 ½ points. Let's say that
Team A won the game by 17 points. We would consider this to have been a correct smart
money move since the betting action came in on the favorite, pushing the number up
from 6 to 8 ½ (indicating support for the favorite). We would thus post the result
in the 'Right' column for both Team A and Team B (since from Team B's perspective,
the public was wagering against Team B and that was a correct action to take). Had
Team A won the game by only 3 points, or had they lost, then we would have posted
the result in the 'Wrong' column since the money came in on the favorite and the
favorite failed to cover.
The results in the following charts do not reflect a
team's record in the games involving smart money. Rather, they reflect whether or
not the smart money move was properly directed. As an example, Tennessee was involved
in 4 games in which the Closing Line varied by at least a point and a half from the
Opening Line in 1991. In all cases the line move was in the proper direction. In
fact, Tennessee's record against the line in the four games was just 1-3, yet the
so called 'Smart Money' correctly went against Tennessee at the right time, and on
them also at the correct time. Similarly, Georgia was involved in six 'Smart Money
Moves' in 1991, all of which turned out to be wrong. Georgia was 3-3 against the
pointspread in those games but the 'Smart Money' moved incorrectly each time.
If there was smart a money move that caused the closing
number to result in a push vs. the line then we have posted that result as a push.
In such cases a winning team was converted to a push and a losing team was also converted
to a push. In the majority of cases a smart money move doesn't convert a winner vs.
the line into a loser, or vice versa. What we're studying here is whether or not
there was action in the right direction.
If the line opened at -6 for a team, went to -9, and
then dropped to close at -7 we would not consider that to be a smart money move since
the large move upward was eventually offset (a net move of just 1, from -6 to -7),
in many cases being bought back by money that had initiated the original line move
(an attempt to artificially manufacture a 'middle').
What is the purpose of this information? Actually, several
purposes are served by analyzing the data in the following chart. First, we can see
that so-called smart money is, as a general rule, no smarter than John Q. Public.
Ignoring moves that resulted in pushes, overall there were 147 correct moves and
147 incorrect moves in 1990 for 50.0%. In 1991 these numbers were 153 correct moves
and 188 that were incorrect, or 44.8%. In 1992 there were 154 correct moves and 144
that were incorrect, or 51.7%. In 1993 the results were 146 correct moves and 131
incorrect moves, or 52.7%. In 1994 the results were 133 correct moves and 142 incorrect
moves, or 48.4%. In 1995 the results showed 109 correct moves and 106 incorrect moves,
for a success rate of 50.7%. In 1996 there were 145 correct moves, 136 that were
incorrect, for a success rate of 51.6%. In 1997 there were 148 correct moves and
125 incorrect moves for a success rate of 54.2%. And in 1998 there were 144 correct
moves and 167 that were incorrect for a success rate of just 46.3%.
If you had gone WITH and followed the smart money you
would have lost 14.7 net units in 1990, lost 53.8 net units in 1991, lost 4.4 net
units in 1992, won 1.9 net units in 1993, lost 23.2 net units in 1994, lost 7.6 net
units in 1995, lost 4.6 net units in 1996, won 10.5 net units in 1997 and lost 39.7
net units in 1998. Thus by playing ON or WITH the Smart Money during the past nine
seasons you would have profited by 12.4 net units in two seasons and lost 148.0 net
units in the other seven season for a staggering net loss over the nine seasons of
135.6 net units!
Had you gone AGAINST the smart money you would have lost
14.7 net units in 1990, won 19.7 net units in 1991, lost 25.4 net units in 1992,
lost 29.6 net units in 1993, lost 4.3 net units in 1994, lost 13.9 net units in 1995,
lost 23.5 net units in 1996, lost 37.8 net units in 1997 and won 8.6 net units in
1998. Thus you would have won 28.3 net units in just two of the nine seasons by going
AGAINST the so-called 'Smart Money' while losing 149.2 net units in the other seven
seasons for a staggering net loss of 120.9 net units!
Watch early in the season for those teams that seem to
attract or repel the smart money, and whether or not those moves turn out correctly.
If you can follow those teams throughout the season you will find several teams that
you can support when there are smart money moves involving that team and other teams
that you should oppose the smart money move.
The teams in 1999 to follow these patterns may well be
different from the ones in prior seasons, but by mid October you can start to form
some conclusions about whether the smart money has correctly, or incorrectly, assessed
the true nature of specific teams. Note that the public had been very perceptive
about Washington, with 30 correct moves and just 16 wrong moves from 1990 through
1998 -- with the moves being more right than wrong for six of the nine seasons (going
4-4 in 1991, 2-3 in 1993 and 2-2 in 1995).
During the 1999 season the Logical Approach Newsletter
will be reporting on the smart money earners and smart money burners periodically
so that our readers will be able to take advantage of the smart money's ability or
inability to properly assess certain teams relative to the line.
Again, the Opening Line used in our compilations is the
Opening Line at the Stardust Sports Book on Sunday evenings -- the line that is the
focus of the 'lottery' which gives the high rollers first crack at the fresh numbers.
Many times a good portion of the movement from the Opening Line will occur on Sunday
evenings. But also a significant portion of these moves occurs during the week and
also on Saturday within hours of the kickoff. While we have not been able to do adequate
research as to the timing of the move, suffice it to say that this information as
presented gives a very good idea of how the public views certain teams over time.
Following the team by team results chart we present a second chart. This chart reports the results for each season, and in total, based upon the magnitude of the smart money move. The first number is the number of times the move was correct. The second number indicates the number of times the move was in the wrong direction. The third number indicates the number of times the move resulted in a push.
Note that the total number of moves (right, wrong and
those that ended in pushes) shown in the charts are actually DOUBLE the number of
games on which there were moves since for each move there are two teams that have
to be charted. When a line moves in a game between Kansas and Baylor there is just
one game involved, but two teams for which that move is charted. So even though the
total number of moves in the chart is 5,194 there are only half that number, or 2,597
Also note that we have included results for teams no
longer on the Boards (such as the Ivy League schools) and a one line result for schools
that have discontinued their football programs (Pacific, Long Beach State, Fullerton
State) or are Division I-AA teams that may have had a rare lined game against a Board
team (i.e. some teams in the Big Sky conference). In this way all 2,597 'Smart Money
Moves' have been considered.
This sort of information can be very useful, especially
in the latter part of the season. Each year the public continually overestimates
some teams while underestimating others. Watch for these patterns to unfold through
the first part of the season. It will pay dividends down the stretch.
And the significant finding of the entire study is that
while the money may indeed be 'smart' for certain teams, on an overall basis it's
pretty much a 50/50 proposition.
So just because there may be some 'steam' on a Saturday
this coming season, don't assume that the move will necessarily be correct. Likewise,
don't shy away from a play your handicapping shows should be made simply because
the line is moving towards the other side.
You now have some pretty strong information to use when
you assess the so called 'Smart Money Moves.'