Sunday, 13 December 2009

Rough With The Smooth

When I look back on my spreadsheet in years to come, the total for yesterday, a profit of £3.55, will be quite unremarkable. Hidden behind that number however, is much drama. Losses on the Premier League games, wins on the Scottish Premier League, losses on basketball, wins on basketball and finally wins on ice-hockey. The bottom line is all that matters, but it makes for a roller-coaster of a day when the biggest single market loss exceeds £960 yet somehow the day ends in profit. There's always the 'if only' feeling, but of course you never know when the winners will come or when the losers will come. All you can do is keep investing when there is value and take the wins and losses in your stride.

It would be wonderful to invest, make 1% a day, and repeat, but investing doesn't work this way for sports or financials. The stock market has been great overall this year, but last year was a nightmare with some huge daily swings both up and down. In sports, even though you might be confident that you have an edge, within any long sequence of investments, there are going to be some dispiriting sequences, but also there will be runs where it seems nothing can go wrong.

The key is to stay detached from individual outcomes, to be grateful that opportunities arise even if they end up as losing bets, and stay the course. Changing strategies after a losing run can be costly. Inevitably, losing runs end, but if you have moved on to another method, then you miss out on the gains when they do come.

There's probably no better example than the stock market. A bull market picks up steam, the world and his uncle jump in, and everyone in the pub becomes an expert in pricing up shares. Suddenly the market turns, loses several percent in value and the world and his uncle give up and sell, just before the market turn back again, and the whole cycle is repeated. What the world and his uncle should be doing is the opposite. Buying when the market is flat and getting out when the market is flying high for no apparent reason.

There are a number of blogs or forum posts out there that set ridiculous targets such as making 1% a day, and which all inevitably fail. They are quite boring actually, with none of them ever mentioning how the author thinks he is finding an edge. No staking method in the world will make a coin-toss system profitable if the price on each outcome is 1.9. It speaks volumes for the optimistic nature of gamblers I guess, that so many people think that the laws of probability somehow do not apply to them.

The Football Elite service had one recommended bet yesterday, which was Stoke City who came up short against Wigan Athletic. On the one-hand, Stoke gave up a wonder goal, but on the other-hand they were lucky not to lose when Wigan missed a penalty.

In their short-listed selections, they finished with three winners from six, but their pick of Bari at 4.7 v Juventus ensured a nice overall profit. Perhaps Borussia Moenchengladbach's 5-3 win over Hannover 96 (at 2.19) was a little fortunate - Hannover conceded no less than three own-goals in this game!

Birmingham rounded up the winners at 2.18, with Burnley (2.78), Hull City (3.05) and Cagliari (2.41) coming up short - the latter thanks to a 96th minute equaliser. Although not all selections were winners, not one was a loser so a conservative laying system could offer a low-risk steady income.

Today they have three recommended selections. So far Mainz 05 is the only completed game, and they drew 1-1 with Stuttgart at 2.81. Updates on the other selections later.

1 comment:

JS said...

If it weren't for our emotions we'd all be very rich and very boring indeed :)