What’s more dangerous – narrative fallacy or a 2-0 lead?

For whatever reason, footballing tradition has it 2-0 is the most dangerous lead in the game but, when it comes to investment, believing that stories like that trump hard facts is potentially far more risky



Simon Adler
Fund Manager, Equity Value

Just over a quarter of the way through the Premier League season, the Telegraph picked up on some curious statistics.

After 10 rounds of matches, both the proportion of games won from a losing position and the number of points per week clawed back after a team went behind were – at 8% and four, respectively – at their lowest levels since the current incarnation of English football’s top tier came into being 25 years ago.

Therefore – and whisper it quietly – the old adage that 2-0 is the most dangerous lead in football no longer stands up to scrutiny.

Not that we ever really thought it did, here on The Value Perspective – but, then again, we find ourselves pretty sceptical about the possible reasons the Telegraph suggests as to Why the first Premier League goal is more important than ever.

  • One is that the limited resources of the poorer clubs means they are setting themselves up more defensively with a view to frustrating the opposition.
  • Another is that the stronger clubs have become more effective at seeing out games once they have taken the lead.
  • And a third is the amount of money coming into the game from television and elsewhere means teams find themselves able to buy better defenders.

What the article fails to suggest as a possible – indeed, to our way of thinking, highly probable – explanation is that the historic lows for these two statistics are entirely random and will in due course ‘mean-revert’.

In other words, they will eventually edge back towards their longer-term average of roughly 11% of games won from behind and five and a bit points per week clawed back from a losing position.

Humans love a story

Of course, of all the available explanations, our one is by far the dullest on offer and the things about human beings is that we do love a story.

This broad inability of our species to look at any sequence of facts without imposing some sort of story upon them even has a name – narrative fallacy.

Thus, as and when the two statistics have mean-reverted, it is a decent bet somebody will come up with a story to explain that too.

Similarly, spend a couple of minutes on Google and you will start finding articles explaining away the Premier league season that saw the most games won from behind and points per week clawed back from a losing position – respectively, 15% and seven – way, way back in … 2012/13.

Same outcome, different reasons

According to the EPL Index website, for example, reasons the eventual champions Manchester United won more points than any other team after falling behind included then-manager Sir Alex Ferguson’s willingness to change tactics when in a losing position, the signing of striker Robin van Persie from Arsenal and the resulting ability to bring striker Javier Hernandez on late as a game-changing substitute.

That’s right – neatly mirroring the reasons in the Telegraph piece, there were more comebacks five years ago because richer teams were setting themselves up more offensively and teams were buying better attackers.

Indeed, repeating that latter point shows just how odd an argument it is – after all, surely any team in any year is going to set out to buy the very best players, whether in defence, in midfield or in attack, it can afford.

What is more, as we showed in What Alan Shearer has to teach us about inflation, Premier League clubs have, right from kick-off, always had the money to go out and buy the very best players.

So, fun as an article such as this is to read, it also illustrates two human frailties that can contribute to bad investment decisions – a desire to create a narrative where none exists and an unwillingness to accept the power of mean reversion.

Of course, an investment strategy such as value that focuses on numbers over stories can help guard against these frailties.

And, on the subject of statistics trumping emotion, here on The Value Perspective we are grateful to the Telegraph for arming us with the knowledge that, far from being the most dangerous lead in football, Premier League history tells us fewer than 3% of all two-goal leads have ever been overturned.


Simon Adler
Fund Manager, Equity Value


Behavioural finance
The Value Perspective
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