🛑 No action is still an 'action'

When in uncertain times, human beings tend to feel like they need to make decisions to prove to themselves they are in control. In the same vein, a goalkeeper, when facing a penalty kick will often dive rather than staying in the middle of the goal.

🥅 The Expected Goal or “Xg” for a penalty is fixed at 0.76. This roughly translates into a goal being scored 76% of the time a penalty is struck. The odds are in favour of the kicker. How about if we can help balance out those odds by helping some budding goalies?

📖 In a piece featured in James Montier’s book ‘Value Investing’, Mr Montier points to a study of 311 penalty kicks from top leagues and championships worldwide.

A panel of three independent judges was used to analyse the direction of the kick and direction of movement of the goalkeeper. Very roughly speaking, the kicks were equally distributed with about one third of the kicks aimed at the left, centre and right of the goal. However, the keepers displayed a distinct action bias: They either dived left or right (94% of the time), hardly ever choosing to remain in the centre of the goal. Yet, they would have been much more successful if they had just stood in the centre of the goal.

According to the stats. When the goalkeeper stays in the centre of the goal, he saves some 60% of kicks aimed at the centre, far higher than his saving rate when he dives left or right. The goalkeepers were asked why they choose to dive rather than stand in the centre. The defence was that at least they feel they are making an effort when they dive left or right.

It is a stark reminder that we should not feel like we need to do anything when we go into a meeting, especially when the data might inform us that ‘standing still’ is the best course of action.