It’s Only Luck When it Works

The Super Bowl was barely over – I think that Taylor and Travis were still kissing on screen – when the pundits and armchair quarterbacks came out in droves to criticize the “bad” decision that Kyle Shanahan, the coach of the losing 49ers, had made.

For those who weren’t among the record viewership for the game, Shanahan elected, when given the choice at the beginning of overtime, to receive the kickoff.

San Francisco then proceeded to move the ball down the field, falling just short of a touchdown, thanks to a tough Kansas City defensive stand, and having to settle for a field goal. This wasn’t a terrible outcome; according to ChatGPT, NFL teams score just north of 30% of their possessions, so that should have put them in a good position.

Now, all the 49ers had to do was hold Kansas City scoreless to win, or to a field goal to give San Francisco the ball again and another shot at scoring.

To back up a moment, when San Francisco took the kickoff, they could expect one of three outcomes: a field goal, a touchdown, or a goose egg. Two of those three outcomes were good, giving them a decent shot at winning the game.

Once the Chiefs got their turn, they also had three possible outcomes: a touchdown would win it; a field goal would tie it and send the ball back to the 49ers; and if the Chiefs were held scoreless, then they’d go home without a ring.

All likely outcomes entering into overtime were: 1) Both teams fail to score, giving SF a second chance to receive and a second opportunity to score and win; 2) both teams kick a field goal or score a touchdown, also giving SF a second shot at scoring and winning); 3) SF fails to score and KC either kicks a field goal or scores a TD and wins;  4) SF kicks a field goal or scores a TD and holds the Chiefs scoreless, thus winning; or 5) what happened: SF kicks a field goal but KC responds with a TD and wins.

This is all pretty straightforward. It doesn’t take a math whiz to figure it out.

Shanahan’s thinking was that, by receiving first, he gave his team two chances to score, unless the Chiefs outscored them on the first go around. This was a reasonable decision. Even the great Patrick Mahomes has failed to score more often than he’s succeeded. In fact, his record in prior overtime games was 2 wins and 3 losses. He got shellacked by Tampa Bay in a prior Super Bowl.

Mahomes is exceptional; he’s not invincible.

We all know what happened. Kansas City came roaring back on their possession and won the game with a brilliant touchdown pass by Mahomes. This was dramatic, exciting, fun (at least for Chiefs fans). But it was not inevitable, as everyone now seems to think.

I couldn’t find the exact odds (if someone does, please let me know), but Shanahan’s decision clearly put the odds in his team’s favor. The fact that Mahomes and Kansas City confounded his decision with a great drive doesn’t make it a foolhardy decision. In fact, what do you think everyone would have been saying if the 49ers had outscored the Chiefs in overtime? Shanahan’s a genius.

You can make the very best decision based on all of the relevant data and not get the desired outcome, or even the most likely outcome.

You can do something completely foolhardy, like put all of your savings into the stock of a company that’s losing money hand over foot and that may never turn a profit again, and yet make a fortune.  Just watch the movie “Dumb Money.”

Stupid decisions can result in great outcomes. All it takes is dumb luck. Intelligent decisions can lead to losing a Super Bowl. Sometimes it just boils down to fate.

One of the most common and expensive mistakes in investing, in my opinion, is confusing luck with skill. It’s funny how, when things go well, everyone naturally assumes it’s because of their skill, while when things go badly, it must be due to bad luck.

The problem with attributing success to skill when it’s due to good luck is that good luck rarely lasts forever. The smarter you think you are while your luck is running, the more likely you are to double down on your stupidity. The Chiefs’ victory may not have been inevitable, but running out of good luck probably is.

What you can do – and what I always try to do – is to delve as broadly and deeply as is practical into the data, evaluate it carefully and thoroughly, then make a thoughtful, considered decision. You’ll be wrong some of the time; that’s unavoidable. But you’re more likely to make it to the Super Bowl that way then by making haphazard decisions and counting on luck to bail you out.

David Harris, CIMA