Last week, in an interview with Squawk Box, Pete Rose was asked about the things he looks for when picking baseball games, and the answer I found most interesting was about how teams are playing lately.
Rose explained that teams’ good and bad play can extend for days at a time. In other words, it seems that he likes to back (or fade) streaking teams. Is this a valid profit-making strategy? The answer was surprising.
What is the common perception on what a “streak” entails? Is it winning or losing three in a row? Four? Five? More than that? I feel a streak starts when you beat more than one team during the run. In other words, with most series being three games, winning or losing four games in a row qualifies.
With that in mind, I decided to pull out all of the games from the last three-plus seasons in which a team won or lost four or more games in a row. I then analyzed what that team did in the follow-up game in a variety of scenarios.
Of the 24 instances this season in which a team had lost four in a row, 14 saw the losing streak end right there. In the four cases where a losing streak reached six games, three teams ended streaks in that next game.
In the 28 times in 2021 in which a team had won four straight games, only 11 extended the winning streak to five.
This contrarian type of result in 2021 follows a pattern of recent years. In fact, it is generally a better handicapping strategy to fade the winning streaks and back the losing streaks. This would certainly qualify as a “fade the public” mode of betting. Of course, there are exceptions to every rule, and had bettors chosen to fade Oakland when its winning streak reached four games back on April 13, they would have lost a significant bankroll chunk all the way through April 25. The A’s impressive 13-game winning streak was the exception, not the rule.
Going back to the start of the 2018 season gives us a sizable database to work with, and thus the findings should be of value.
Overall records of streaking teams
Lost 4: 399-467, +14.4 units, ROI: 1.7%
Lost 5: 212-250, +16.4 units, ROI: 3.5%
Lost 6: 122-126, +34.45 units, ROI: 13.9%
Lost 7: 66-59, +31.3 units, ROI: 25.0%
Lost 8: 35-24, +23.6 units, ROI: 40.0%
Lost 9: 16-8, +17.2 units, ROI: 71.7%
Lost 10: 6-2, +8 units, ROI: 100.0%
There is a steady and consistent increase in ROI from backing teams in each successive game of a losing streak. Some bettors may consider this a method of chasing. In theory, the longer a losing streak continues, the more the market typically plays against that team. That is a mistake, obviously. In fact, after the seventh consecutive loss, teams have actually posted winning records in the next game.
Won 4: 479-419, -48.65 units, ROI: -5.4%
Won 5: 250-226, -39.85 units, ROI: -8.4%
Won 6: 120-129, -48.95 units, ROI: -19.7%
Won 7: 64-56, -7.15 units, ROI: -6.0%
Won 8: 30-34, -13.25 units, ROI: -20.7%
Won 9: 14-16, -4.7 units, ROI: -15.7%
Won 10: 6-8, -5.05 units, ROI: -36.1%
While not a near-perfect slope like the losing streak data, the negative ROI of teams getting deeper into winning streaks also tends to increase with successive games. There seems to be a breaking point on this data, too, that being after a sixth straight win. Teams tend to almost hit a wall at that point, both in terms of winning percentage and return for bettors. That said, the overall takeaway here is that it is never profitable to consistently back teams that have won four or more consecutive games.