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Super Bowl Odds: Should You “Buy the Dip” with the Chiefs?
It’s often the case among amateur investors that they trot out the well-known maxim “buy the dip” which might be the move with the Chiefs
It’s often the case among amateur investors that they trot out the well-known maxim “buy the dip”. The idea, as you might expect, is that you buy an asset like stocks when it falls, and then reap the benefits when it rediscovers its value. Of course, expert investors pour scorn on blindly following this strategy as there is no real evidence that it works.
However, you can draw some parallels between buying the dip in investing and buying the dip in betting. For the latter, that means backing a team whose odds have risen and hope that they get better. And of all teams in NFL this season, the most high-profile faller has been the Kansas City Chiefs.
After starting the season as one of the three favorites (along with the Buccaneers and Bills) for Super Bowl LVI, the Chiefs’ odds have almost tripled (from about +500 – +1400), and they now find themselves around 8th or 9th favorite overall. That’s arguably being generous, given that there is no guarantee that the Chiefs (3-4) will make the Playoffs.
So, would it be worth backing the Chiefs to turn around the bad start to the season? The conventional wisdom says no. Not only have they been pretty abject, particularly in defense, but there is also the fact that things won’t get easier. The Chiefs’ remaining 10 games are considered the most difficult of any team’s schedule.
But there is a broader point to be made here about betting. Sportsbooks tend to hold their nerve when teams have shaky starts to the season. But they pull the proverbial trigger when it becomes clear that results are more than early season teething problems.
Of course, the opposite is also true. Bookmakers will take a while to cut the odds of those teams with surprisingly hot starts until it becomes clear it’s no fluke. It took some time, but the Arizona Cardinals are a good example of this in the 2021/22 regular season. The Cardinals’ Super Bowl odds have been cut from around +4000 to +900, making them 4th favorite overall.
The key, of course, is to hit the sweet spot, i.e., backing a team before the odds start to tumble. In his NFL Picks Straight Up column earlier in the season, two-time Super Bowl winner Osi Umenyiora cited the +2500 Los Angeles Rams as being the perfect value Super Bowl future tip. While it remains to be seen whether the Rams can go all the way, Umenyiora has been proven correct in terms of the market movement. As with Arizona, the price has gone down to about +900 today.
So, is anyone backing the Chiefs to turn things around by suggesting that we buy the dip? Not really. In early October, some pundits had pointed to possible moves Kansas could make to fix the defense and other areas. But after the limp performance against the Titans where the Chiefs managed just 3 points, the most common phrase in reporting on the team was variations of “ it’s time to panic”.
They can, of course, turn things around. And a win against the Packers on Sunday would be just the type of tonic the Chiefs can drink to build momentum. But as things stand and until we see something positive from Kansas, buying on the dip seems just a bad a strategy as those used by bad investors.
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