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The Masters, Course History, and Daily Fantasy Goodwill

“You’re just a kid. You don’t have the faintest idea what you’re talking about.”
— Sean Maguire, Good Will Hunting

The movie Good Will Hunting has absolutely nothing to do with the rest of the article. However, since A) this piece is (sort of) about goodwill and B) I know nothing about golf, the quotation feels apt.

Colin Davy, the Bad Boy of Daily Fantasy Golf

Every so often, FantasyLabs PGA Director Colin Davy likes to make statements that #GolfTwitter finds controversial.

For instance . . .

Whenever Colin says something that other golf analysts resist, I’ll usually bring him on the The DFS Rountable so he can discuss the topic publicly without having to limit himself to 140 characters. The “Strokes Gained” episode of the show is great.

Why am I telling you this? Because last year Colin said some stuff about course history, and it’s relevant now to the Masters.

PGA Course History

Course history is something of a debated topic in the PGA DFS community. Some people think that course history is real and/or measurable. Other people think that course history is just a version of course fit and/or nonexistent.

Given that Colin is a professional data scientist, it’s probably not surprising that he thinks course history is something that can be quantified. He wrote a series of articles on the topic:

Colin and I also did a “Course History” episode on The DFS Roundtable. Here’s how Colin explained course history on the show:

Course history, at its simplest form, is the idea of using golfers’ past performances at a particular course to adjust your projections of how they will do at that course in the future. It basically entails looking at and getting a sense of their course-specific results and figuring out how to weight that in comparison to all the other factors that you weight when you’re trying to predict how a golfer will do from week to week.

Of everything that Colin said about course history last year, three items in particular stand out to me.

Course History Is About Quantifying the Unexplainable

Here’s an excerpt from the introduction to Colin’s first article on course history:

Course history absolutely matters.

Don’t get me wrong: I think that it’s the most frustrating metric in all of PGA. Course history essentially says something like this: “We don’t know why this golfer’s performance is so different at this one place, but it just is.”

The job of data is to explain as much as possible, and course history is the unexplainable leftover at the end.

When phrased that way, the argument against using course history becomes a little more persuasive.

However, if you can at least quantify the unexplainable leftover that is course history, you can backtest it to see if it is in fact predictive of future outcomes (a practice you should be doing for all your metrics). The short version is that course history is in fact predictive.

“The unexplainable leftover” is a great way to think about course history. A lot of people might be uncomfortable with the idea of relying on something that seems unreal and intangible — especially if they’re numbers-oriented people who like data and facts, spreadsheets, etc. — but let me ask you this: Who cares more about numbers and organization and common sense than accountants?

No one.

And accountants — at least those who work in corporate America — use the idea of “the unexplainable leftover” all the time.

Goodwill & Intangible Assets

If you look at the most recent annual balance sheet for The Coca-Cola Company (KO on the New York Stock Exchange), you’ll see that under their assets they list $10.6 billion in goodwill and almost $10.5 billion in (other) intangible assets. Basically, Coke closed the 2016 calendar year by saying that just over $21 billion of its net worth is the knowledge that the company is the best in its field.

While the valuation of intangible assets isn’t a difficult concept to grasp — intellectual property, patents, trademarks, copyrights, proprietary processes, etc., all seem to be worth something — the concept of goodwill is something else entirely.

What is goodwill? It’s the accountant’s “unexplainable leftover.” It’s the value of a company’s name, #brand, customers, business relationships and partnerships, employee loyalty, etc. On the one hand, all of that stuff is subjective and difficult to value. On the other hand, it all clearly has a value that accountants must determine and incorporate into their larger valuations of the enterprise.

It’s easy to read Colin’s explanation of course history and think, “That sounds incredibly nonspecific.” It is, but I view that as more of a theoretical problem than a practical issue.

People with hundreds of millions of dollars at stake have been using goodwill to quantify the unexplainable for years. It’s probably good enough for DFS players.

Course History Is Both Underappreciated & Overvalued

Here’s the second course history item that stands out to me.

In his final piece in the course history series, Colin states that future research on the topic should focus on how to weight samples within the course history window; patterns in course history across multiple courses; and the frequency and magnitude of course history adjustments. He also says that “course history has so many imperfections baked into the process” and that . . .

Refining course history with some of these ideas probably allows for some third-level edge on how much to weigh course history, but in the meantime there are plenty of fundamentals left to cover for DFS golf analytics.

That doesn’t sound like someone who places a whole lot of importance on course history, does it?

Here’s the position I believe Colin reached after researching and writing about the topic:

  1. Not enough people recognize that course history is an identifiable and quantifiable factor.
  2. The people who recognize the existence of course history probably overvalue it.

Far from being mutually exclusive, those two perspectives are the twin pillars upon which a larger interpretation of course history is built: It’s exploitable.

Course History Is Exploitable

This is the third item I want to cover: Course history — especially as it relates to Augusta and the Masters — is probably exploitable. The people who don’t believe in course history lose an edge by ignoring it, and the people who believe in it lose an edge by overweighting it in their models.

Of the two, I think more of the field overweights course history than ignores it when it comes to the Masters, perhaps because this event has such a legacy.

Here’s the intro to this week’s PGA Breakdown by Kelly McCann:

The world’s best golfers — both professional and amateur — along with several over-the-hill former Masters Champions make the journey down Magnolia Lane to the Augusta National Golf Club this week to take on Amen Corner in the hopes of winning a fancy green jacket. The players will cross the Hogan, Nelson, and Sarazen Bridges all while trying to stay out of Rae’s Creek in hopes of making it into Butler Cabin on Sunday.

Everything about Augusta has a name and a story. It’s this seemingly mythic course at which first-time players have almost no chance of winning.

We created course-specific scouting reports for four notable golfers . . .

. . . because it’s the Masters, and that’s what you do for the Masters. The event and above all the course itself must be honored.

But here’s the thing . . .

Course History at Augusta

Colin studied course history and daily fantasy production (Plus/Minus) for specific courses (after making some generic, best-fit adjustments), and he found that A) course history is overvalued for some courses and B) it’s just noise for other courses.

In other words, the generic rules that we might have for various courses — course history matters a lot less than those generic (course fit) rules.

To Colin, it’s not necessarily bad that the basic guidelines of course fit are more important than course history:

The more specific you try to get with your adjustments, the weaker your conclusions have to be due to all the noise. The concept of course history is already a pretty specific adjustment, and you have to be very careful about how you calculate it in order for it to stick.

On the other hand, the fact that generic rules apply pretty well could just as easily be an exploitable edge. If you polled most people about where course history matters the most, Augusta National would probably be up there given how often you hear about its impossible greens and the value of experience. You might conflate that with course history being extra important. However, at least from this year [2016] alone, generic rules on course history applied just as well. All of those things could be true, and we could still be picking up people like Jordan Spieth who excel there. If those things matter more at a given course, that should be reflected in how much a golfer overperforms relative to the field at a course like Augusta.

Course history is intriguing, but at Augusta it very well could be overvalued by many DFS players.

If you do research with our PGA Trends tool, you can easily find Augusta studs with course-specific trends. When you peruse the Player Models, you can see the FantasyLabs ownership projections for every golfer in the field: Do you think the guys who have stood out at Augusta in the past are going to have high ownership this week?

It won’t be a surprise if on Thursday we see in the DFS Ownership Dashboard that the low-stakes players are significantly higher on the course history golfers than are the high-stakes players.

Daily Fantasy Goodwill

I’m not saying that you should outright fade course history. I do, though, think that arbitraging the Vegas odds (via Bryan Mears’ Vegas Bargain Rating metric) might be more useful than chasing the Augusta performances of years past.

Also, remember, I don’t have the faintest idea what I’m talking about. What I suggest is relying on people who do know what they’re talking about.

In our Premium Content Portal, you can see . . .

Rely on our content and experts and most importantly the Labs Tools.

They were good enough for last year’s Masters Millionaire Maker winner.

In financial terms, I believe that’s called “daily fantasy goodwill.”

The Labyrinthian: 2017.32, 127

This is the 127th installment of The Labyrinthian, a series dedicated to exploring random fields of knowledge in order to give you unordinary theoretical, philosophical, strategic, and/or often rambling guidance on daily fantasy sports. Consult the introductory piece to the series for further explanation. Previous installments of The Labyrinthian can be accessed via my author page.

“You’re just a kid. You don’t have the faintest idea what you’re talking about.”
— Sean Maguire, Good Will Hunting

The movie Good Will Hunting has absolutely nothing to do with the rest of the article. However, since A) this piece is (sort of) about goodwill and B) I know nothing about golf, the quotation feels apt.

Colin Davy, the Bad Boy of Daily Fantasy Golf

Every so often, FantasyLabs PGA Director Colin Davy likes to make statements that #GolfTwitter finds controversial.

For instance . . .

Whenever Colin says something that other golf analysts resist, I’ll usually bring him on the The DFS Rountable so he can discuss the topic publicly without having to limit himself to 140 characters. The “Strokes Gained” episode of the show is great.

Why am I telling you this? Because last year Colin said some stuff about course history, and it’s relevant now to the Masters.

PGA Course History

Course history is something of a debated topic in the PGA DFS community. Some people think that course history is real and/or measurable. Other people think that course history is just a version of course fit and/or nonexistent.

Given that Colin is a professional data scientist, it’s probably not surprising that he thinks course history is something that can be quantified. He wrote a series of articles on the topic:

Colin and I also did a “Course History” episode on The DFS Roundtable. Here’s how Colin explained course history on the show:

Course history, at its simplest form, is the idea of using golfers’ past performances at a particular course to adjust your projections of how they will do at that course in the future. It basically entails looking at and getting a sense of their course-specific results and figuring out how to weight that in comparison to all the other factors that you weight when you’re trying to predict how a golfer will do from week to week.

Of everything that Colin said about course history last year, three items in particular stand out to me.

Course History Is About Quantifying the Unexplainable

Here’s an excerpt from the introduction to Colin’s first article on course history:

Course history absolutely matters.

Don’t get me wrong: I think that it’s the most frustrating metric in all of PGA. Course history essentially says something like this: “We don’t know why this golfer’s performance is so different at this one place, but it just is.”

The job of data is to explain as much as possible, and course history is the unexplainable leftover at the end.

When phrased that way, the argument against using course history becomes a little more persuasive.

However, if you can at least quantify the unexplainable leftover that is course history, you can backtest it to see if it is in fact predictive of future outcomes (a practice you should be doing for all your metrics). The short version is that course history is in fact predictive.

“The unexplainable leftover” is a great way to think about course history. A lot of people might be uncomfortable with the idea of relying on something that seems unreal and intangible — especially if they’re numbers-oriented people who like data and facts, spreadsheets, etc. — but let me ask you this: Who cares more about numbers and organization and common sense than accountants?

No one.

And accountants — at least those who work in corporate America — use the idea of “the unexplainable leftover” all the time.

Goodwill & Intangible Assets

If you look at the most recent annual balance sheet for The Coca-Cola Company (KO on the New York Stock Exchange), you’ll see that under their assets they list $10.6 billion in goodwill and almost $10.5 billion in (other) intangible assets. Basically, Coke closed the 2016 calendar year by saying that just over $21 billion of its net worth is the knowledge that the company is the best in its field.

While the valuation of intangible assets isn’t a difficult concept to grasp — intellectual property, patents, trademarks, copyrights, proprietary processes, etc., all seem to be worth something — the concept of goodwill is something else entirely.

What is goodwill? It’s the accountant’s “unexplainable leftover.” It’s the value of a company’s name, #brand, customers, business relationships and partnerships, employee loyalty, etc. On the one hand, all of that stuff is subjective and difficult to value. On the other hand, it all clearly has a value that accountants must determine and incorporate into their larger valuations of the enterprise.

It’s easy to read Colin’s explanation of course history and think, “That sounds incredibly nonspecific.” It is, but I view that as more of a theoretical problem than a practical issue.

People with hundreds of millions of dollars at stake have been using goodwill to quantify the unexplainable for years. It’s probably good enough for DFS players.

Course History Is Both Underappreciated & Overvalued

Here’s the second course history item that stands out to me.

In his final piece in the course history series, Colin states that future research on the topic should focus on how to weight samples within the course history window; patterns in course history across multiple courses; and the frequency and magnitude of course history adjustments. He also says that “course history has so many imperfections baked into the process” and that . . .

Refining course history with some of these ideas probably allows for some third-level edge on how much to weigh course history, but in the meantime there are plenty of fundamentals left to cover for DFS golf analytics.

That doesn’t sound like someone who places a whole lot of importance on course history, does it?

Here’s the position I believe Colin reached after researching and writing about the topic:

  1. Not enough people recognize that course history is an identifiable and quantifiable factor.
  2. The people who recognize the existence of course history probably overvalue it.

Far from being mutually exclusive, those two perspectives are the twin pillars upon which a larger interpretation of course history is built: It’s exploitable.

Course History Is Exploitable

This is the third item I want to cover: Course history — especially as it relates to Augusta and the Masters — is probably exploitable. The people who don’t believe in course history lose an edge by ignoring it, and the people who believe in it lose an edge by overweighting it in their models.

Of the two, I think more of the field overweights course history than ignores it when it comes to the Masters, perhaps because this event has such a legacy.

Here’s the intro to this week’s PGA Breakdown by Kelly McCann:

The world’s best golfers — both professional and amateur — along with several over-the-hill former Masters Champions make the journey down Magnolia Lane to the Augusta National Golf Club this week to take on Amen Corner in the hopes of winning a fancy green jacket. The players will cross the Hogan, Nelson, and Sarazen Bridges all while trying to stay out of Rae’s Creek in hopes of making it into Butler Cabin on Sunday.

Everything about Augusta has a name and a story. It’s this seemingly mythic course at which first-time players have almost no chance of winning.

We created course-specific scouting reports for four notable golfers . . .

. . . because it’s the Masters, and that’s what you do for the Masters. The event and above all the course itself must be honored.

But here’s the thing . . .

Course History at Augusta

Colin studied course history and daily fantasy production (Plus/Minus) for specific courses (after making some generic, best-fit adjustments), and he found that A) course history is overvalued for some courses and B) it’s just noise for other courses.

In other words, the generic rules that we might have for various courses — course history matters a lot less than those generic (course fit) rules.

To Colin, it’s not necessarily bad that the basic guidelines of course fit are more important than course history:

The more specific you try to get with your adjustments, the weaker your conclusions have to be due to all the noise. The concept of course history is already a pretty specific adjustment, and you have to be very careful about how you calculate it in order for it to stick.

On the other hand, the fact that generic rules apply pretty well could just as easily be an exploitable edge. If you polled most people about where course history matters the most, Augusta National would probably be up there given how often you hear about its impossible greens and the value of experience. You might conflate that with course history being extra important. However, at least from this year [2016] alone, generic rules on course history applied just as well. All of those things could be true, and we could still be picking up people like Jordan Spieth who excel there. If those things matter more at a given course, that should be reflected in how much a golfer overperforms relative to the field at a course like Augusta.

Course history is intriguing, but at Augusta it very well could be overvalued by many DFS players.

If you do research with our PGA Trends tool, you can easily find Augusta studs with course-specific trends. When you peruse the Player Models, you can see the FantasyLabs ownership projections for every golfer in the field: Do you think the guys who have stood out at Augusta in the past are going to have high ownership this week?

It won’t be a surprise if on Thursday we see in the DFS Ownership Dashboard that the low-stakes players are significantly higher on the course history golfers than are the high-stakes players.

Daily Fantasy Goodwill

I’m not saying that you should outright fade course history. I do, though, think that arbitraging the Vegas odds (via Bryan Mears’ Vegas Bargain Rating metric) might be more useful than chasing the Augusta performances of years past.

Also, remember, I don’t have the faintest idea what I’m talking about. What I suggest is relying on people who do know what they’re talking about.

In our Premium Content Portal, you can see . . .

Rely on our content and experts and most importantly the Labs Tools.

They were good enough for last year’s Masters Millionaire Maker winner.

In financial terms, I believe that’s called “daily fantasy goodwill.”

The Labyrinthian: 2017.32, 127

This is the 127th installment of The Labyrinthian, a series dedicated to exploring random fields of knowledge in order to give you unordinary theoretical, philosophical, strategic, and/or often rambling guidance on daily fantasy sports. Consult the introductory piece to the series for further explanation. Previous installments of The Labyrinthian can be accessed via my author page.