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How to Spot Hot Teams
Investing in college basketball can be very similar to investing in the stock market. Specifically, college basketball teams can peak at just the right time. As an investor, if you can spot when a team is peaking, you can hop on board and ride those teams to some fantastic gains.
Tournament time is the time of year when this approach can really pay off and it's really not that difficult to spot these teams. All you need is a simple power rating to accomplish this. These days, there are many good power ratings published for free online, some more complex than others. The Sagarin ratings are the most well known, but really, any decent rating will do.
What you need to do is take a look at recent games. The last 5 for example, and compare how a team performed in those 5 games compared to their season to date power rating. For example, let's say team x has a rating of 80 on the year and they play a team rated 75, who we'll call team z. Team z is the home team, so a standard 4 points will be allotted for home court edge for simplicity sake (home court varies from team to team). This would mean the power ratings favor team x by 1 point.
In this example, let's say team z wins by 10 points. They performed 9 point better than their rating indicated, in this game, or like a team rated 89. You can do this calculation for the last 5 games played and then come up with an average rating for the last 5 games. That would be the readjusted power rating for this team.
Another way to do this would be to simply add or subtract how many points the team outperformed, or underperformed against the closing line. If a team was a 5 point favorite and won by 10 points, they would be +5 for that game. Again, perform this calculation for the last 5 games and compare those numbers with that of their opponent. You're looking for teams that are playing at a higher level than they have performed in the past.
Combine this approach with our score prediction model and you'll find some fantastic spots over the course of March madness. Each and every year we find teams peaking at just the right time and these methods will help you spot those teams before the masses.
Here are just a few of the teams playing far above their season to date power ratings over the last 5 games. If the Big East tournament started today, we'd be looking for spots to play St Johns.
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Now here are a few of the teams playing way below their season to date power rating over the last 5 games.
Unlike St Johns, we'd be looking to play against these teams. This is just another weapon you can use to find some value. This can be used at anytime during the year, but we have found this approach to be very affective come tournament time. It's a great way to find a hot team or two ready to pull some major upsets and go on a post season roll. Happens every year.
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