The most frequent means of marketing sports services is some variation on the theme that so-and-so is “red hot” and therefore should pay him his money and follow his moves. Corrupted services do this by creating all sorts of confusing and contradictory rating systems and hyperbolic descriptions for their games. How many times have you heard a handicapper brag about “16-2 in his 500 MWC Stars of the Month” or say that his “Southern Conference total for the month is 60% lifetime”?

Basically, the worst in this industry can slice and dice their stats in any number of ways to appear “hot”. Or they can do what many of them do and just lie about their performance. When I started out as a sports handicapper, the internet didn’t exist (at least as it exists today) and I had to rely on a phone for line and score updates. This phone dialer was sponsored by a bunch of scalpers who aren’t noted for their veracity, and had to wait a few releases to get their 900 numbers before hitting the scores. A bit of a Faustian bargain, to say the least, but it was an effective way to keep up with scores in the pre-internet dark ages.

So one night we were at a party thrown by a guy we didn’t really like. My team and I were racking our brains to come up with some bad pranks to play on the guy. Someone had the idea to accumulate some 900# charges on our brand’s phone bill. Since there is no such thing as 900# directory assistance, I returned the only 900# I could remember: one of the dialer ads that had punched its digits into my memory through the sheer force of repetition.

For the sake of discussion, I decided to write down every play in the NBA. I had less faith in his handicap ability than in a forecast based on a dowsing rod or Ouija board, but since I wasn’t paying for the call, I figured I’d just see how the guy was doing. I wrote down his plays and checked his performance the next morning.

In his favor, the whole went 5-3 in his 8 plays. By any standard, a 5-3 night is a solid performance. Later that day I called the scoreboard and waited for everyone to start bragging about their 5-3 night. To my surprise, the whole thing didn’t say a word about their 5-3 night. That’s because he was too bragging about his mythical 7-1 the day before.

Now, I understand that the revelation boiler room fans like about his performance is on par with “pro wrestling is fake” or “the games at the fair are not up to date” as self-evident truths. The point I’m trying to make though is that the desire to be the “hot dealer” is so great that the tout felt they had to embellish a solid performance the night before.

So despite the fact that some handicappers like his performance, what’s wrong with trying to ride the hot handicapper? A lot: Not only is this an ineffective way to assess a forecaster’s skills, but it also has a number of statistical and theoretical shortcomings.

The easiest way to explain what I’m talking about is to borrow a disclaimer you’ll hear in every mutual fund commercial: “Past performance is no guarantee of future results.” The sports betting environment, like that of stocks, commodities and other financial instruments, is a market and is subject to many of the same trends as other financial institutions (what economists call “market dynamics”).

The fact that the success or failure of a sports bet depends to a certain extent on the “whims” of a market (of odds and point differentials) and, to a greater extent, on other external events beyond the control of the bettor, exacerbates which is already a matter of simple logic: what a handicapper does over a period of time (whether it be a day, a week, a month or a season) has no intrinsic correlation between the performance of a one-year handicapper and the next. In other words, the sports betting market and the random patterns of events acting on it don’t care if I hit 60% last year. If I don’t do my job, analyze the numbers, get good betting prices, and take a few breaks along the way, I can end up beaten regardless of how well I performed in a subsequent period of time.