Bubbles explained


Dear Heart Blame,

                                I am a passionate Doggies fan struggling to come to terms with things after the round 1 loss.  What happened? I thought we were going to go through the season undefeated!  This is really a savage blow.  I feel so deflated.  Can anyone at Heart Blame explain what happened?

Footy Fanatic Fred From Footscray

PS: The only positive was that we lost to a really nice team in Collingwood.  Otherwise the pain would have been even worse.




By Penny Dredfell*


Dear Footy Fanatic Fred From Footscray

In the world of finance, bubbles are always appearing and then bursting.  A share price may rise dramatically and people will buy only because others are buying.  Like the dotcom story at the turn of the millennium.  Or the housing market will rise on the basis of easy credit – only to come crashing down when credit is tight and the economy dips (like the US in recent years).


The same is true in footy.  But there are two types of bubbles (well, three, if you count Michael Bubble):

The first is the typical stock market bubble.  In this case, the stock market rises, everyone gets excited as new records seem near.  Then, without much warning, a disaster occurs; or something happens and the market deflates quicker than a pricked balloon.  These bubbles always end in tears.  This is what happened to the Dogs against the Pies in round one 2010.  The Dogs were so close to a Grand Final in 2009.  Then along came Big, Good Barry Hall.  Expectations rose.  As if they weren’t high enough already, he kicked 5 in the last quarter of the NAB Cup grand final.  The victory seemed to indicate that the flag was there for the taking.  All upwards and onwards from there on!  But then reality bites and they are 5 goals down at quarter time in round one.  “SELL!” everyone suddenly yells.  But it’s too late! The game is gone and the tears flow for Dogs supporters.


The second type of bubble in football is the two stage bubble.  A prime example of this in 2009 was Collingwood in rounds 9 – 16.  The Pies were on a long winning streak of 6 games from rounds 9 – 14.  They had won each game comfortably.  How long could they keep going?  The two stage bubble was about to supply the answer.  In round 15 they played the Dogs and their run of easy wins looked set to continue.  At ¾ time, they led the Dogs by 34 points.  But then the Bulldogs came with a big run and finally, the Pies fell over the line by a point against quality opposition.  So what next.  The two stage bubble, of course.  The two stage bubble theory tells us that a team on a long winning run will generally show signs of an impending loss by tailing off badly at the end of a game.  In round 16, the Pies played the Hawks.  Hawthorn weren’t travelling too flash at the time.  They had lost to the Dogs by 88 points in round 14 after losing to the Eagles in Perth in round 13 and being towelled up by the Lions in Tassie in round 12.  They had a hard fought but unimpressive win against North in Tassie in round 15.  So no hope to beat the Magpies in round 16! Right?  Enter the two stage bubble.  It almost burst against the Dogs.  Then BOOM! A 42 point victory by the Hawks over Collingwood.  Quite often, the two stage bubble does not lead to disaster and the Pies trounced Carlton in round 17.  And many, not understanding the bubble, predicted big things for Hawthorn late in 2009.  But no, it wasn’t a Hawk revival!  It was just the two stage bubble placing them in the right place at the right time.  They won 1 of their last 6 matches to miss the finals.


*  Penny Dredfell is a fictitious character and please seek your financial adviser before following her investment advice.