March 14, 2011
Here We Go!
It could be worse. You could be scrambling to fill out a 96 team bracket right now. The NCAA mercifully whittled that chaotic concept back down to a manageable 68 teams. But that’s still more slots than last year, which means more games, more coverage, and more research into obscure teams and talent to make sure your bracket doesn’t go bust in the opening round. With all that added “work,” we know you could use a partner in this process. Fortunately for our clients, Chatham is right there to serve and meet all your March Madness needs! This time of year, we turn our attention from currency baskets to college basketball, from interest rate term structure to the NCAA tournament structure, as we too follow the madness and endlessly build out hypothetical winning brackets (when not modeling swaps with embedded options, of course). While Chatham is purposely view-neutral when it comes to predicting market movements, we actually have strong views on which teams will make it to the championship game – just don’t expect any two of us to agree! Still, if you need a little basketball advisory to go along with your derivative deals, you can be sure we will oblige! And just to be sure that we hear from you, in what is historically one of the least productive weeks on the U.S. business calendar, we have brought back our Pick 6 contest!
Pick 6…The Great Escape (Win an iPad2!)
Several years ago, Chatham succumbed to the pressures of March Madness and developed its own NCAA tournament pool, creatively titled “Pick 6,” which is open to all Chatham clients and most other recipients of this newsletter. In our pool, each willing participant takes one shot at selecting six teams that he/she thinks will excel, or just win a game or two, in the tournament, and will garner an unmatched number of points for the participant. At the end of the tournament, the participant with the most points is named the winner and receives a beautiful Chatham gift, which this year is a 32 GB iPad 2.
You may be saying to yourself, “Well, that sounds great, but how do I get points and win?” Good question. Points awarded are contingent upon the seeds of the teams selected and the number of games won. For example, if you select a #1 seed, a first round win will get you 33 points and a second round win will get you 44 points. If you select a #16 seed, however, a first round win alone will get you 408 points, more than you would get if that #1 seed were to win six straight games (i.e. the coveted national championship). Because the tournament is expanded to 68 teams this year, the contest does not begin until the start of play on Thursday, March 17th (when all seeds including play-in teams have been finalized and only 64 teams remain!).
Now, this may seem like a no-brainer, so to speak. You just select bottom 6 overall seeds and you’re good, right? Well, not so fast. What I didn’t mention is that no #16 seed has won a first round game…ever!! Several have come very close, but none has quite gotten over the proverbial hump. So, if you buy into the “high rewards” theory and history reigns true this year, that portfolio of #16 seeds will earn you zero points. On the other hand, selecting the top 6 overall seeds may not be the answer either. What happens if a #16 seed does gain that elusive first round victory? You may have to watch some one-win wonder participant walk away with a Pick 6 victory. Clearly, there are better strategies. Remember, there are fourteen other seeds and including these in your selection distribution is likely prudent. Just like any good portfolio manager, if you allocate your selections wisely, while maintaining a healthy balance between prudent decision-making and wild bet-taking, you should do well. I can guarantee that you will at least have fun, and will experience the thrill of taking a view in a relatively risk-free environment.
Now for the fine print of eligibility requirements. This pool is intended for regular recipients of the newsletter who are typically clients, prospects, service providers, etc. If this newsletter is forwarded to you, and you wish to play the Pick 6, just contact us and we can “pre-qualify” you for the game! And of course, Chatham employees and their families are not eligible to win the prize (sorry dad!).
If you are interested in participating in this year’s pool, click here to download a ballot form with instructions. Send your completed ballot to Pick6@chathamfinancial.com. Remember, the First Four tournament games that are played on Tuesday and Wednesday, March 15-16 are not part of this contest. The contest begins with the first games that are played on Thursday, March 17th!
Ballots should be completed and returned to us prior to 11:00 am EDT on Thursday, March 17th. The winner and results will be announced in a future newsletter. Good Luck!