Perhaps it's considered good branding for a top-flight investment bank to issue its predictions for this year's soccer World Cup: Goldman Sachs, JP Morgan and UBS have all published their own guides to the games. But these banks would do better to heed their own advice to investors: past performance is not indicative of future results. To the discerning fan, their predictions are unapologetically shackled to the tournament's long history and ignore major changes to the game over the past decade.
Goldman Sachs notes that of the 19 World Cup tournaments to date, 12 have been won by just three countries Brazil (5), Italy (4) and Germany (3). Uruguay won twice in the early years, while Argentina won in 1978 and 1986. England and France have each won once. And at least one of Brazil, Italy, Germany and Argentina has played in every final.
Those who follow the sport closely, however, rate Spain the strongest of the European contenders based on the team's form over the past three years, its abundance of talent in every position, its players' leading roles on Spanish and English club teams that have dominated the European Champion's League over the past five years, and the mental focus of the same basic squad and coach that won Europe's mini-World Cup two years ago. None of that impresses the sages at UBS, who dismiss Spain on the basis of history. "Spain favored by many will likely not do well, and could exit before the semi-final stage."
Such unapologetically static analysis ignores the profound impact globalization has had on the game over the past decade. The World Cup is no longer a unique quadrennial moment of international football that pitches players from different continents against one another, often for the first time. Today, most of the elite players from all 32 countries at the World Cup play each other every week in European pro leagues for which the tournament is simply a punctuation mark between seasons. The migration of players and coaches since the 1990s has profoundly altered the global balance of power in the game. African teams have grown into major international contenders, while within Europe the movement of players towards the dominant leagues of England, Spain and Italy has had a positive effect on a number of the national teams they represent during the World Cup. Those who predict England has its best chance in years a perennial refrain acknowledge that this year it's because they're being coached by an accomplished Italian, Fabio Capello. And Brazil are rated by many as favorites to win, not because they still play their free-flowing brand of "samba soccer" but because they've adopted many of the dour defensive habits that have been so successful for other teams over the years.
For institutions focused on predicting global trends, the bankers' prognostications are unusually backward-looking and, unfortunately, rather Eurocentric. Goldman Sachs' suggestion, for example, that the unheralded Swiss side will beat Chile and Honduras may be an example, or its assumptions that Denmark will finish ahead of Cameroon and Slovakia will shut out Paraguay. Eurocentricity reaches almost comical heights in Goldman's entry on Portugal, which likens the journey of the team to South Africa to that of the 15th century explorers that opened the way to Portugal's colonial era. The piece hails four of Portugals key stars, expressing the hope that the "sublime Pepe, Nani, Simao and Deco" will have the same "brave disposition [as the explorers] that made their country great 500 years ago". But although Pepe and Deco may be playing for Portugal, they're actually Brazilian, while Nani hails from Cabo Verde; their ancestors may not have been as fond of Portuguese colonial greatness.
Still, commend Goldman above their peers for at least attempting a team-by-team guide, even if it's quality is uneven. Some entries are plainly written by Goldman analysts whose focus is stocks, bonds or currency, rather than football. On the other hand, there are knowing assessments of the prospects of Cameroon and Ivory Coast, England, Germany and France, and outstanding insights into Italy a squad of familiar faces that Goldman accurately paints as past their prime. The bank even seems to have a working knowledge of North Korean football unlike most fans outside the hermit state and their package offers a brilliant tactical analysis of the evolution of Spain's "progressive possession" game, written by a former Spanish player, Angel Ubide.
Among Goldman's dodgier predictions: South Africa finishing second in its group (bet on France); Serbia or Australia to qualify for the second round at Ghana's expense; Switzerland to beat Chile and Honduras into the knockout stages; Mexico losing to Nigeria. Perhaps wisely, the premier Wall Street investment bank stops its predictions short of the final game: it calls for England, Argentina, Brazil and Spain to reach the semis. JP Morgan, on the other hand, offers a mathematical model factoring in past World Cup performance, FIFA rankings and other statistical indicators based on what it calls its "quantitative research" methodology an enterprise too complex for a lay football fan to parse. Without providing the detailed results along the way, Morgan assures us that running the numbers proves that England will beat Spain in the final, with Holland finishing third. Needless to say, many football analysts might call predicting that England will win the World Cup about as as safe as a mortgage-backed securities. (Doesn't past performance count for anything, people?!)
UBS, for its part, offers the more sober prediction that Brazil will win the tournament. But its view that South Africa will be the only African country in the round of 16 is more questionable; Ghana and Cameroon arguably have better chances of making it through the group stage. (Remember, as the host nation South Africa wasn't required to qualify for a place at the tournament; if it had been, its less-than-stellar results in intra-African competition would prevent it from competing in its own World Cup.) UBS' semifinalist picks of Brazil, Germany, Holland and Italy are also relatively safe, although again, it's reliance on historic results that gives Germany and Italy better prospects than Spain.
Having trashed the best efforts of some very clever people, this writer is compelled to reveal his own risky predictions for the record. They are:
Group A: Mexico wins, France runners up
Group B: Argentina, Nigeria
Group C: England, USA
Group D: Ghana, Germany
Group E: Holland, Cameroon
Group F: Italy, Paraguay
Group G: Brazil, Portugal
Group H: Spain, Honduras
In the round of 16: Mexico beats Nigeria, Germany beats England (on penalties!), Ghana beats the USA, Argentina beats France, Holland beats Paraguay, Brazil beats Honduras, Italy beats Cameroon and Spain beats Portugal.
In the quarter finals: Brazil beats Holland, Germany beats Mexico, Argentina beats Ghana, Spain beats Italy.
In the semi-finals: Brazil beats Germany, Spain beats Argentina.
And the winner is: Brazil beats Spain in a tightly fought final.