World Cup Fever

World Cup Fever

Are you checking your phone/the internet/TV for the latest soccer news? Or does that describe your family and friends recently? Chances are, at least one of the answers to those questions is YES. There’s no denying that the epidemic is here, the world is captivated by the 2014 FIFA World Cup™ taking place June 12 – July 13. It’s World Cup fever!

The Yeske Buie team is participating in a firm bracket challenge, a great way to have fun with your co-workers and an excellent excuse to exchange friendly trash talk through the office messaging system. Just as when we play fantasy football or prepare our brackets for the NCAA basketball tournament, we find that no amount of research can overcome the random nature of sports.  It’s a lot like stock picking, where all the research in the world still leaves your hot stock subject to the whims of fate.  News enters the market randomly, causing stock prices to follow what economists call a “random walk” day-to-day and month-to-

month.  Our World Cup brackets seem to have followed a random walk as well.  Who would have thought that Spain and Italy would go out in the first round, or that the U.S. would advance as far as it did? Fortunately for our clients, we don’t build portfolios the way we build FIFA brackets.

About the FIFA World Cup

The FIFA World Cup is the largest single-event sporting competition in the world, which has taken place every four years since it first started in 1930 (except during WWII). It is the crowning event of FIFA’s objectives to, “…touch the world, develop the game, and build a better future through a variety of ways.”

The Preliminary Competition takes place during the three years leading up to the World Cup, where approximately 200 entries across six continents compete for 31 available spots (the host country receives an automatic spot). The Final Competition is the World Cup, which takes place at a host nation where the 32 teams compete over one month until a World Champion is crowned. The ‘group stage’ puts teams together in groups of four that compete against each other (each team plays three games). A win (3), tie (1), or loss (0) will decide a team’s points. The overall winner and runner-up for each group will proceed to the ‘Round of 16.’ From there, the games are single elimination until a victor wins in the final match.

So, who’s going to win? Will economics or animal oracles make the best prediction?

Based on past precedent, the animal oracles have the better shot.

According to Max Ehrenfreund of The Washington Post, there doesn’t appear to be a correlation between the economics of a country and how successful they are in the World Cup. This is a departure from other sporting events such as basketball or the Olympics where, “wealthy owners…and national income can often be used to forecast medal counts.”

Of the most economically powerful nations e.g. the U.S., China, and India, only the U.S. is in the tournament and they are not considered a favorite to win.

Meanwhile the pool of favored champions includes Brazil, Argentina, and Spain. Brazil, despite being the host country, is undergoing protests from their recession and perceived government corruption. Argentina experienced a 28% hike in prices last year, and Spain’s labor force faces an unemployment rate of nearly 25%.

“For now, soccer remains a game of luck – and of good players making their own luck, and in turn, of good programs creating good players. That depends on facilities, infrastructure and, of course, on less tangible factors like tradition and know-how.”

Since economic measures are not reliable at determining World Cup dominance, who can?

During the 2010 FIFA World Cup in South Africa, Paul the Octopus correctly guessed all of Germany’s matches and predicted Spain’s ultimate victory against the Netherlands (sadly, Paul passed away months after his famous predictions). The animal craze continues on however, with host country Brazil selecting a 25-year-old sea turtle as it ‘animal oracle’, whose predictions are made by eating the fish under one of the team flags or the ball in between if it will be a tie. Project Tamar, an organization working to save sea turtles in Brazil, capitalized on the oracle craze by raising awareness of their mission to help the endangered sea turtles after the World Cup predictions were made.

Australia is relying on Flopsy the kangaroo to hop to and eat out of one of two bowls marked with a different team card, and Germany is turning to an elephant in Hanover’s Serengeti Park to make its predictions by kicking a soccer ball into one of two goals, each with a different team card. See more of the animal oracles.

Don’t care about the World Cup but do care about sustainability?

If the World Cup is something you’d don’t care too much about, but sustainability is important to you, the FIFA folks have implemented the 2014 FIFA World Cup Sustainability Strategy to, “…guide their efforts towards staging a sustainable event and, ultimately, contributing to building a better future.”

A few examples of their sustainability practices include:

• Green buildings: Many stadiums in Brazil are planning to achieve LEED certification for green buildings and many are installing solar panels on their roofs to generate renewable energy. In addition, FIFA and the LOC will organize certified training courses on sustainable management for stadium managers.

• Community support: 
Numerous local organizations in Brazil are tackling social challenges in their communities with the aid of football. FIFA and the LOC will support such organizations with funding and know-how, through FIFA’s well-established Football for Hope initiative.

• Climate Change: Global warming is one of the most pressing issues of our time. One of the main factors in the change in temperature is the Carbon Dioxide (CO2) that is released into the atmosphere through human activities. FIFA and the LOC will estimate the carbon footprint of the tournament and develop measures to avoid, reduce and offset its emissions.

Learn more about the additional sustainability practices FIFA plans to implement.