In the AFR I present my heterodox analysis of this weekend's billion dollar "money fight" between Floyd Mayweather and Conor McGregor, which implies that betting markets may be mispricing the latter's probabilities of success (click on that link to read for free or AFR subs can use the direct link here). Excerpt below:
"On Sunday morning one of the biggest combat sports events in history will take place for the bejewelled WBC "money belt", which is expected to break pay-per-view records with $1 billion in revenue, mint two of the best paid athletes on earth, and possibly deliver the greatest upset ever. The "smart money" reckons iconic 29-year-old Irish mix-martial arts champion Conor McGregor has no chance of defeating the pound-for-pound best boxer of all time, Floyd Mayweather jnr, when he faces the 40-year-old legend in Las Vegas. Even with the popular support, bookies gave the master trash-talker odds of less than 1-in-10 when the fight was announced on June 15. Yet after months of analysis and interviews with McGregor's sparring partners, this columnist believes the rank underdog's probabilities are around 50/50 compared to market pricing – inflated by McGregor's massive fan base – of less than half this level. Here's why. The secret to this fight is McGregor's "disruptive" strategy (in the Clay Christensen sense). Much like chess, boxing is a pattern-based and choreographed sport in which fighters becoming neurologically conditioned to observing and processing opposition routines and reacting with predetermined heuristics that become hard-wired into their brains to minimise reflex time. In contrast, mix-martial arts (MMA) is much more complex, creative and chaotic given it encompasses five Olympic disciplines – boxing, judo, taekwondo, greco-roman wrestling, and freestyle wrestling – plus other modalities such as Brazilian jiu jitsu, kick-boxing, Russian sambo, karate, and Muay Thai. Boxers often talk about how unorthodox or "awkward" fighters are the most dangerous threats. These are individuals who don't emulate conventional rules and, as a consequence, inject processing errors into the mental code of adversaries, who are searching for standard physiological cues. It is rare to hear this in MMA because almost every athlete is awkward insofar as bouts are typically between fighters from divergent disciplines. The possible permutations and combinations, and the ways fights can be finished are larger because the two weapons permitted under boxing's Queensberry rules are expanded to 13 with the addition of forearms, elbows, knees, shins, feet, and whole-of-body wrestling. McGregor's unusual stance, distance, movement, and odd angles of attack, will likely cause Mayweather problems in the early rounds. The expert consensus is, however, that Mayweather will decode this enigma by the fourth and thereafter dismantle him. I am not so sure. Mayweather has never faced an athlete that remotely resembles McGregor in terms of his reach, strength, weight and highly heterodox strategy. All the documented sparring sessions McGregor has had with amateur and professional boxing champions, including his 20 rounds with two-weight world champion Paulie Malignaggi, suggest he has prevailed over these pattern-based participants." Read full article at AFR here.
Christopher Joye is Co-Chief Investment Officer of Coolabah Capital Investments, which is a leading active credit manager that runs over $2.2 billion in short-term fixed-income strategies. He is also a Contributing Editor with The AFR.