MAYWEATHER won the fight. End of story.
No matter how much whining and complaining you do about Mayweather’s run-and-hide strategy, Pacquiao’s shoulder injury, or the way the judges arrived at their scores, it’s over. The winner has been officially declared.
And unless a miracle on the order of Jesus raising the dead happens, the decision is final.
Going into the fight, it looked to be a fairly even contest. Mayweather had a reach and height advantage but Manny may have had a “heart” edge. Fan sentiment was probably evenly split, some wanting to see Mayweather keep his historic undefeated streak going. Others wanted to see Pacquiao go down as the genuine greatest “pound-for-
pound” champion.
Each had their stable of “experts” who could rattle off a list of reasons their choice was going to be the victor. Justin Bieber stood with Mayweather and Sylvester Stallone was in Pacquiao’s camp. The experts in the boxing game were mostly divided as to what the outcome would be.
Nevertheless, there was one group that not only picked the winner but also said that the result was not going to be close. It does not matter how twisted the path might be to proclaiming the eventual winner of the fight. At the end of the day, all that matters is who won and that was Mayweather.
The final betting odds, decided by hundreds of thousands of people who backed their judgment with their money, showed that Mayweather was actually an overwhelming favorite for a fight of this magnitude. Mayweather was a two-to-one favorite over Pacquiao. That is not close to an even fight.
The collective wisdom of the all the bettors was that Mayweather would win and win big. They were right.
The concept of collective wisdom is that if you measure the opinions of enough people you will get the right answer whether we are asking about the winner of a boxing match or the number of pieces of candy in a 50-kilo rice sack.
Betting odds are determined, not by experts, but by the amount of wagers for the contestants. In this case, Mayweather had twice as much money bet in his favor. Before you go all conspiracy theory on the Las Vegas mafia controlling the odds and the outcome, remember that at least as many bets and as much money was placed by bettors in the United Kingdom where people wager on sports the same way Filipinos buy Lotto tickets.
The now-closed international betting web site, Intrade, took wagers on everything, from election outcomes to when celebrities might give birth and the name of the child. Rarely was the collective wisdom wrong.
Proponents of this concept say that if you have a decision to make where the best choice is not obvious, ask a lot of people what they think. Ask 100 people how many of pieces of candy are in the 50-kilo rice sack and you will almost always get very near to the exact answer. The person who says 50 pieces of candy will cancel out the answer of 10 billion. By taking an average of all the answers, you will be surprised how close that average will be to the correct number.
One “expert” might say 50 pieces. Another 10 billion and yet a third might have the exact answer. But you can never know which expert is right.
Look at the expert predictions for economic and financial data. Usually all the experts are almost perfect with their estimates or miss by a mile. That is because they are all calculating the same way using mostly the same data. There is little significant difference between them. The same is true for the stock market.
How then do we measure the collective wisdom of the stock market when we are told that the “little guy” always loses, buying at the top and selling at the bottom? The “contrarians” also believe in collective wisdom but are sure that it is always wrong, so they go the other way.
I frequently talk about stock market psychology and investor sentiment but, I must confess, that is all really just an intellectual game. What investors are thinking and feeling means nothing unless it is supported by their actions.
Before the big fight, a barangay captain in a far-flung province said that everyone she knew was passionately rooting for Pacquiao and betting their money on Mayweather.
Measuring the collective wisdom in the stock market is simple. Follow the money. And the money is rarely wrong. Just ask Freddie Roach.
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E-mail me at mangun@gmail.com. Visit my web site at www.mangunonmarkets.com. Follow me on Twitter
@mangunonmarkets. PSE stock-market information and technical analysis tools provided by the COL Financial Group Inc.