Attack and defence

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You may note with horror the subject of this post seems to be football. It isn’t really — the JC’s basic disinterest in/ignorance of the beautiful game is widely known and mocked — but football does serve as a good analogy. To the sportsphobics: apologies — there’s a bit of tennis in there, too: hopefully you’ll think it worth it. I will eventually get to the point.

“On 18 December 2022, he fouled Randal Kolo Muani to give away the penalty for France’s opening goal in the final, where Argentina eventually won 4–2 in the penalty shoot-out after the match ended 3–3 at extra-time, to win the World Cup.”

— Wikipedia, Nicolás Otamendi

“Mbappé became only the second player in history to score a hat-trick in a World Cup final, scoring three goals against Argentina in the 2022 World Cup final. Argentina led 2–0 with just over ten minutes remaining before Mbappé scored twice in two minutes, the second from a volley after playing a one-two.”

— Wikipedia, Kilian Mbappé

It is amazing what we remember.

The 2022 World Cup Final will be remembered for Lionel Messi, yes, but also for Kilian Mbappé’s hat-trick — the first in a World Cup Final since you-know-when. (A brief recap: Argentina dominated for most of the game and led 2-0 with ten minutes to play. France awoke from its stupor, equalised and, in extra time equalised again, only to lose on penalties. Striker Kilian Mbappé scored all of France’s goals.)

On reading the papers the next day the asymmetry between how they evaluated attack and defence was strikiung. Compare, for example, their breathless coverage of Mbappé’s performance with their more qualified assessment of Argentine defender Nicolás Otamendi’s game.

The common consensus: Otamendi had a solid game, but made one big mistake, giving away a penalty that brought France back into the game. Mbappé, on the other hand, was more or less invisible for 80 minutes, but sparked to life ten minutes from the end, scoring a hat-trick to take the match to penalties which, despite another Mbappé penalty, France then lost.

The world’s media rated Otamendi’s game at 5/10 and Mbappé’s about 9.5. That two of Mbappé’s goals were penalties, which you’d expect any top flight striker to score, did not dim the papers’ appreciation, and has already dropped out of Wikipiedia’s executive summary. The fact that the Argentina’s defence was so dominant that France substituted half of its forward line before half-time, nor that Argentina eventually won — seems not to have helped Otamendi.

It seems our criteria for evaluating attackers and defenders are different. A striker can horse about for eighty minutes and, as long as he gets on the end of at least one cross before the final whistle will still be remembered as a hero. A defender must put in a faultless 90 minutes shift.

I know which I’d rather do.

Relative cost

Especially when you see how they are respectively paid. The top paid footballers earn between £20m and £35m, and most are strikers. Not one is a defender. The ten top-paid defenders in the world earn between £12m and £18m a year.

The point here is not to challenge these ratings but note the different success criteria for attackers compared to defenders. The payoffs are asymmetrical. You can — as the Argentinians did — shut the brightest star in football’s firmament out of a World Cup Final for 80 minutes and get 4; you can be shut out for that time by a not-especially notable centre back (who is apparently playing poorly!) and get a ten.

It seems like there should be an arbitrage here: one should pay more for quality defending — it’s cheaper, and definitely better value for money — than a fancy-Dan striker who doesn’t do much for most of the game.

On attack and defence

Knowing whether what you are doing is “attack” or “defence” can therefore help you figuring out your own performance criteria. It is not always intuitive. In tennis, one defends when serving, and attacks when receiving. You cannot win a tennis match by holding serve. But you can ensure you don’t lose it, but your defence must hold up flawlessly for the entire match. You only need to break service twice in a 36-game, three set match, to win.

Likewise, securities trading. portfolio investing If you are a football striker, a well-timed volley can bring you adulation, this is almost never going to happen to a salesguy. Unless he blows up. You would most likely not have heard of Nick Leeson, John Meriwether, Jeff Skilling, Bernie Madoff, Bill Huang or Gabe Plotkin had they not blown up. Credit Suisse made USD$20m per year from Archegos; they lost $US$5.5bn on it overnight.

The business of preventing Mbappé’s immortality requires a ninety minute shift and consistent but unglamorous execution and no-one is likely to remember you, either. Unless you fuck up. And then you may be assured Michael Lewis will be optioning books about you to Hollywood.

Post script: spare a thought for poor old Olivier Giroud, substituted off after 40 minutes.

Extending the metaphor

Strikes us that this metaphor: of defence being judged by by consistent perfection, and attack being judged by momentary inspiration, translates. We wonder how closely this translates to finite and infinite games.

Investing

It strikes us that betting on the consensus — in most times, that the market will rise, is defensive. Betting against it is attacking.

Thus, those who bet on consensus are collecting pennies in front of the steamroller: returns accrete, require patience, prolonged exposure and take time. You are betting against a tail event: the risk of being “caught in possession” is a function of the time you have exposure. The longer your time horizon, the worse the odds of tail event happening. The longer you must play, the greater your exposure.

To benefit from the consensus you must play a long game. Whether your strategy is a success of not depends on the rate at which you pick up pennies, compared with the rate at which you lose them in that tail event. In the same way, a football defence dependend on someone at the far end scoring goals more quickly than it concedes them at the near end.

Those who buy crash puts — or, as in the Redditors’ case, calls — are attackers. They cost a lot and, in ordinary times (against a competent defence), return nothing. They are paying their blind to be in the game, and expect in most cases to lose the small investment it represents. They are throwing pennies in front of a steamroller for others to pick up: they don't stand themselves to be run over, to the contrary, on those rare occasions when the defence fails and the steamroller flattens the rest of the market, they get to collect everyone else’s pennies. This will happen rarely: the key is to net more pennies in this haul than you have paid out in the mean time while things where hoopy.

Villainy

A criminal defendant will be severely prejudiced if there are is a single lapse in her story. The prosecutor, however, needs just one moment of inspiration, to breakdown that story, and find that lapse, and the prosecutions case can hold.

Compliance

A regulated financial services institution, likewise, must be flawless in its regulatory compliance.

That it may be unfailingly virtuous, altruistic, and motivated towards public good in 99% of its affairs will count for nothing if a single bad apple launders money for a single in an unregarded branch office in Murmansk.

By contrast, its supervising regulator, less so. What regulatory oversights it misses do not, generally form part of the public record: “what the eye don’t see, the chef gets away with”. It is not so closely monitored, nor held to account, and — to great extent — it does not matter how ineffectual its regulatory coverage or investigation was in any other regard: if it finds that one regulatory breach it can extract a fine and knee slide to the gallery.

When the hunter becomes prey

But, but, but — this is all true as long as you are in defence mode and not attack mode. For — but for an apex predator — everyone spends some time on attack — punching down — and some on defence — avoiding being punched down. Client mode is attack; adviser mode is defence. The SEC, when investigating Madoff, is in attack mode and, sure, it didn’t land one but the expectation is a clear round; when explaining its failure to find anything to a Congressional Committee, it is in defence mode.

There are notable exceptions, of course but these prove the rule by their relative absence the excoriation hand out to the Securities and Exchange Commission over Madoff, and the public criticism of BaFin over the Wirecard affair — but even here the relative punishments are in no way comparable.

See also

• Roll of honour

Those media ratings in full

Professional sports journalists rate a striker and a defender

Media	Otamendi	Mbappé	Comment
Guardian	6	9	Otamendi: Like his team, he had looked comfortable until Kolo Muani sorely exposed him in a one-on-one. Mbappé: Out of the game until turning it on its head and becoming first final hat-trick scorer since Geoff Hurst.
Sky Sports	6	9	Otamendi: Was playing so well - and then gave away a daft penalty to allow France back into the game. Mbappé: It felt a false start for 80 minutes but then the Grandmaster produced another work of art.
Express	5	9	Otamendi: Clumsy late penalty cost a straightforward win - the needless arm grapple gave Kolo Muani reason to tumble. Mbappé: Squeezed his first penalty past Martinez then came alive. Second brilliantly taken, the hat-trick emphatic.
Telegraph	4	10	Otamendi: Stupid mistake to give away the penalty against Muani as the 34-year-old had barely been troubled for 60 minutes by the French attack. Mbappé: One of the finest World Cup performances in history. Struggling to generate a spark for 60 minutes, then the supercharger came on and he hit a hat-trick.
Sun	6	9	Otamendi: His brain-fade moment turned a victory cruise into a desperate fight for survival and opened the door for one of the greatest games of all time. Mbappé: Zero to hero. Incredible. Was he playing in the first half? Looked like he’d picked the biggest game of his career to have the worst day of his life. Then….remarkable.
Average	5.5	9.2	Otamendi: Good game, one error, but what a doozy. Mbappé: Not sure he was even playing for an hour and a half, but came right at the end.