From an article on SmartMoney.com comes this worrying piece:
It may be depressing to think about, but a soon-to-be published paper on money and aging argues that while our experience and accumulated wisdom make us smarter for a while, this effect is ultimately swamped as our minds begin to decline with age. The tension between these two forces means that the sharpness of our financial decision making rises and then falls over the course of a lifetime, like an upside-down U.
The authors of the paper even put a number on the peak of that upside down U: 53.
That's the age, on average, where people's increasing experience begins to be outweighed by the inexorable deterioration of all parts of the human body -- including, of course, the brain. As the baby boom generation heads toward retirement, there will never have been so many people with so much accumulated wealth heading into such an extended period of cognitive decline.
I need to make the most of the next four months, although as with many other disagreeable statistics, I assume they apply only to other people, not to myself.
Monday, 23 November 2009
Sunday, 22 November 2009
Overall, a very pleasing weekend. I have had to widen my spreadsheet to accommodate the rare occurence of a double-figure goals tally after Spurs 9-1 win over Wigan. Perhaps not surprisingly, this win exceeded the expected win by 2, but of the ten Premier League games this weekend, four finished with the exact expected margin.
Although the two intra-group games did not result in any draws, both went under which brings the total to 19 unders from 26 games to date. Draws are now 9 from 26. Looking ahead to mid-week and next weekend and there are no less than six such games on the schedule:
Fulham v Blackburn Rovers
Arsenal v Chelsea
Aston Villa v Tottenham Hotspur
Fulham v Bolton Wanderers
Wigan Athletic v Sunderland
Wolverhampton Wanderers v Birmingham City
Saturday, 21 November 2009
An interesting day today, with three spot-on predictions on the Premier League more than making up for three losses. With Chelsea predicted to win by 4, I not only backed them to win, but for the first time ever had a bet on Any Unquoted at 3.85. The gods gave me a draw at Burnley, courtesy of an 86th minute goal, but took away a win for West Ham that looked probable early on. Manchester United also won easily enough.
The other disappointments were Birmingham winning, and even more so, Sunderland beating Arsenal when the latter were expected to win by 2. Liverpool were picked by 2 but with their form the second worst in the Premier League at the start, I left this one alone.
Finding the draw is an area that is showing potential. Although 4 winners from 10 picks doesn't sound great, with an average price of 3.4, this is a good strike rate, although we will need a much bigger sample before getting too excited.
Tomorrow's game at Bolton is not only predicted a draw on the ratings, but is also an intra-group game.
In other news, another value basketball lay (New York Knicks at 1.5) failed to deliver when the New Jersey Nets couldn't close out the game, but I had a couple of winners during the night, so it's all about the big picture.
I have written before about Benford's Law, and how it can be applied to identify faked results, and this article by Leighton Vaughan Williams on the Betfair blog from five days ago is worth a read.
In a fascinating article published in the New York Times, a certain Malcolm Browne relates how Dr. Theodore Hill would ask his maths students to go home and either toss a coin 200 times and record the results, or else pretend that they had done so. Either way, he would ask them to produce for him the results of their (real or imaginary) coin-tossing experiment.
Dr. Hill's purpose in this experiment was to show just how difficult it is to fake data convincingly. It just isn't that easy to make up a random sequence. Based on this knowledge, he would astound his students by unerringly picking out the fakers from the tossers!
One of the ways he would do this would be to spot how many times heads or tails would be listed six or more times in a row. In real life, this occurrence is overwhelmingly probable in 200 coin throws. To most of his students this long a sequence is counter-intuitive, an example of what is often termed the Gamblers' Fallacy, i.e. the erroneous perception that independent random sequences will balance out over time, so that for example an extended sequence of heads is more likely to be followed by a tail than a head. The fakers, susceptible to the Fallacy, are thus easily exposed. Ordinary people, even mathematics students, simply can't help introducing patterns into what is random noise.
This is an example of a broader analysis which is usually referred to a Benford's Law, which essentially states that if we randomly select a number from a table of real-life data, the probability that the first digit will be one particular number is significantly different to it being a different number. For example, the probability that the first digit will be a '1' is about 30%, rather than the intuitive 10%, which assumes that all digits are equally likely.
The empirical support for this proportion can be traced to the man after whom the Law is named, physicist Dr. Frank Benford, in a paper he published in 1938, called 'The Law of Anomalous Numbers'. In that paper he examined 20,229 sets of numbers, as diverse as baseball statistics, the areas of rivers, numbers in magazine articles and so forth, confirming the 30% rule for number 1. For information, the chance of throwing up a '2' as first digit is 17.6%, and of a '9' just 4.6%. The same principle applies to trailing (i.e. last) digits. It's a great way, therefore, of checking the veracity of receipts. If, for example, there is an unusual number of trailing digit '7's, there's a decent chance that the figures are cooked. Tax authorities are alert to this.
So randomness is not so random, it seems. Applying the analysis to some recent real-world events, Nate Silver, founder of www.fivethirtyeight.com, polling guru and all-round statistical wizard, examined the results of the recent Iranian election, declaring them "probably forged." More recently still, he's turned his attention to one of the US's high-profile pollsters. The results of his analysis of their findings and his interpretation make fascinating reading.
It's important that survey results are genuine, as they are integral factors in driving the markets, and in particular the election markets. If you are able to differentiate the genuine from the phony, it may thus give you the edge in beating the odds. Let's call it Benford's bonus!
Friday, 20 November 2009
Liverpool v Manchester City: The ratings say Liverpool by 2, but their form is terrible. Back them at your peril.
Birmingham City v Fulham: Draw
Burnley v Aston Villa: The claret and blues to win this one*
Chelsea v Wolverhampton Wanderers: Chelsea by 4.
Hull City v West Ham United: West Ham by 1.
Sunderland v Arsenal: Arsenal by 2.
Manchester United v Everton: Manchester United by 3.
Bolton Wanderers v Blackburn Rovers: Draw
Tottenham Hotspur v Wigan Athletic: Spurs by 2.
Stoke City v Portsmouth: Stoke by 1.
* I was being silly about Burnley and Villa - this will actually be a draw.
It's probably not too often that you end a session in which you layed a losing team at 1.38 for a sizable amount, and come away feeling disappointed. That was the case in the early hours when I layed the Phoenix Suns as they made a poor start in New Orleans, but when they recovered and started to trim the deficit, I locked in my profit. It's always seems to be the way with these decisions that if you let the bet run, it goes pear-shaped, and if you lock in your profit, the initial bet proves to be a winning one. Annoying on one level, but in the long-run the decision to even up was the right one.
I then followed this with a lay of the San Antonio Spurs who looked poor from the start at home to the Utah Jazz. Now as I'm sure we are all aware, Utah hadn't won in San Antonio since Bill Clinton was President, nor had the Jazz yet won consecutive games this season, and the Spurs are usually a good home team, so when the Spurs staged something of a comeback, again, I took the profit, influenced by the aforementioned factors no doubt. However, in this case I was so convinced that the Spurs would go on to win, that I gave up the profit and more for a big payout on a Spurs win. Of course, again, the initial lay went on to be a winner, and I ended the session in the red once again.
So what could, and should, have been a stellar night turned out to be something of a disappointment, but at least some of my decisions were proved correct. I think sometimes one can try to hard. On another day, perhaps in the middle of a better run, decisions may have been different. They shouldn't be, but as I mentioned a couple of days ago, taking the emotion out of it in the heat of battle is the hardest part of it.
The ever-wise voice of reason JPG left a positive comment that is appreciated. Essentially, adopt the mindset that every bet has value, and not to worry or care if it loses.
Anyway, it is said that you learn more from losses than you do from wins, and so it's onward and upward, except for the fact that I shall be heading to Las Vegas and California next week for Thanksgiving with my fiancee's family and a little rest and relaxation. Probably a good time for a break and some sunshine.
Premier League predictions in a few minutes.
Thursday, 19 November 2009
Jack was hit by a flying penny from the crowd as he left the pitch after one match at Kenilworth Road. It cut his face and he had to have six stitches. Eric Morecambe went to see him to ask if he was OK and to make sure he wasn't going to report Luton. When Jack confirmed he wasn't, Eric said "Good, now can I have my penny back?".
So France got past Ireland, albeit in somewhat controversial fashion, and if Uruguay get past Costa Rica, all former World Cup winners will be in South Africa next year.
Once we see the draw on December 4th, it'll be time to start getting excited. No Russia, Croatia, Czech Republic or Ukraine to name a few 'big' countries missing out, but some rare attendees, e.g. Greece, New Zealand and North Korea (I'm old enough to remember their last appearance in a World Cup at Goodison Park).
My trip to Germany for the last one really was great. If you haven't been to a World Cup finals yet, you need to go, although admittedly Germany is a lot easier to get to than South Africa. With my son now at university and my wedding in August, I'm not sure a visit to South Africa will be practical but I live in hope.
My only bets today were under 2.5 in the France v Ireland game, figuring it would be a closely contested affair, and Brighton who won as the numbers predicted. Bolton v Blackburn and Stoke v Portsmouth could be worth a bet on the draw and unders.
Wednesday, 18 November 2009
November is traditionally one of my strongest months of the year, but so far this month hasn't been as good as expected. I didn't even have to pay a Premium Charge this week, proof that every silver lining has a cloud perhaps.
It's just been one of those runs where value bets haven't paid off, in particular several basketball teams have been holding on to 2 or 3 point leads. The tide was stemmed yesterday with the Rockets trading at 1.7 at half-time with a three point lead at home to the Phoenix Suns. As much as I know from past years that 1.7 is too short a price, it's hard to shake the loss of confidence that a losing run brings.
A day earlier and Orlando Magic are trading at 1.25 at home to Charlotte Bobcats with a two point lead in the third quarter. Of course Charlotte then go on a run of offensive fouls or poor shots and I had soon had to cut my losses short.
Putting the emotions to one side is undoubtedly the hardest part of trading. Basketball remains my favourite sport for trading though, and leaders will continue to trade at prices that offer value to the layer. Early in the season it seemed as if every game played into my hands, so these runs come and go. The key is to stay detached and trade like a robot. Easier said than done though. It's a lot easier to lay £1,000 at say 1.4 when your last trade was profitable, than it is when your last profitable trade was a week ago!
While the expression "you're only as good as your last trade" (which I just made up) is not true, it does start to gnaw away at you when the inevitable losing runs come along.
Finally, once again, Brighton are at the center of the domestic football world today, and should beat Wycombe Wanderers by 1.4 - they're a goal up as I write this as are Ireland. A World Cup without France? That'll serve Platini right for rigging the play-offs by deciding that teams should be seeded.
Sunday, 15 November 2009
Saturday, 14 November 2009
With Internationals this weekend, it's a rare opportunity to focus on the lower leagues for a change.
In League One, best bets to win at home are Colchester United (1.62), Huddersfield Town (1.43) and Norwich City (1.42) with draws possible at Gillingham and Yeovil. Away win for Millwall (2.49).
In League Two, draws at Bradford City, Darlington, Lincoln City and Port Vale with Northampton Town (1.71) to win.
In the Conference, I'm looking for a draw at Cambridge United (although personally I'd rather see Kettering win...)
Wednesday, 11 November 2009
Gus Poyet has been appointed manager of Brighton and Hove Albion, a club with (not so) high ambitions it would seem.
He told BBC Sussex:
"This is another challenge for me to take the club where everybody in Brighton wants to be and that's in the Championship."
The Championship? Goodness. There was a time when Brighton's ambitions were somewhat loftier, but a dose of reality seems to have settled in at the club these days. Frankly, there's more chance of them playing in the Conference South than the Championship any time soon, based on this season's form.
I wish them well.
"No one can win long term backing odds on it's just common sense. Gambling is always for mugs and trading is the only way you can ever make money."
So went the first comment to yesterday's post. I thought I had explained as clearly as possible that the laws of mathematics do not suddenly stop working at evens (2.0) but apparently my explanation was still too complex for some.
Some facts. You can certainly win long term backing odds-on. It is not common sense to think otherwise. If it was common sense, wouldn't we all be laying odds-on for guaranteed profits? Why does it make sense to think that you can win long term backing at 2/1 but that you can't at 1/2? If your strike rate at 2/1 is 30% and your strike rate at 1/2 is 70%, betting at which odds would provide the best return?
Another comment mentioned the importance of a good staking plan, linking to a post which extols the virtue of the Kelly criterion. Here are my thoughts on the subject:
Staking plans can help turn a profitable system into an even more profitable system. What they cannot do is turn a losing system into a profitable system.
The only way to verify whether or not your system is a winning or a losing one is by looking at the results against level stakes.
If your system is a losing one, then no staking plan in the world is going to make it profitable. You might think that a loss-recovery system will overcome the negative expectancy, and it may well do for a while, but ultimately, the laws of probability will catch up with you and the inevitable losing run will finish you off.
A winning system can often be made more profitable by implementing a staking plan. Undoubtedly the best plan is to apply the Kelly criterion which, with mathematics far more complex than I claim to understand, has been proven to maximize profits on investments where you know your edge. Unfortunately in the world of sports betting, your precise edge can be very difficult to calculate. If your system is profitable, then you have an edge, and over time you will have a fairly accurate idea of your average edge, but this is still problematic. In sports markets, and with no access to inside information, it is unlikely that you will regularly have more of an edge than justifies your stake being more than 2% of your bank, and this is a good number to work with until you have enough data to justify changing it.
Monday, 9 November 2009
I don't know how often I have written about this, and I suspect it is more than once before, but one of the most ridiculous things I keep seeing in blogs or on betting forums is the notion that one should never back at odds-on.
This is absolute bollox. It makes no more sense than saying "never back at greater than 4/1" or for that matter "never back the home team".
As I've said before, and will no doubt say again, value can be found at any price, and there is nothing in mathematics that says this rule stops at evens. It's complete and utter nonsense.
Evens, or 2.0, simply means the implied probability is 50%. If the true probability is higher than this, back it, if it is less, lay it.
4/1 (5.0) means an implied probability of 20%. If the true probability is higher than this, back it, if it is less, lay it.
1/4 (1.25) simply means an implied probability of 80%. If the true probability is higher than this, back it, if it is less, lay it.
It's not rocket science.
I seriously question whether someone who affords this stupid rule any credibility at all should be betting. Probably not, since the concept of value clearly eludes them, and no one will be a long-term winner unless they are finding value.
It's hard enough finding value as it is without ruling out a large number of possibilities simply because they fall below an arbitrarily chosen number.
York City to beat Chester City - by 2. (Odds-on, but value...)
Sunday, 8 November 2009
"Tomorrow's expected results are draws at Hull and Wigan, Chelsea by 1 and Everton to win at West Ham by 0.5!"
With the draw at Wigan paying 3.35, Chelsea to win at 2.07 and lay of West Ham at 2.6 all coming in, today was an all too rare good day, and it was only a 91st minute goal that robbed me of an excellent day.
That's probably my good fortune used up for a while, but tomorrow, Liverpool are predicted to win by 3 against Birmingham City. A dabble on the draw at Barnsley too.
Some tasty ties in the next round of the Cup. A local derby between Northampton and Southampton. Kettering v Leeds. Staines Town v AFC Wimbledon. Or Millwall. (Anorak note - the original Wimbledon's last ever game as a non-league club was against Staines. Not a lot of people know that.)
While I'm on a roll here with my fascinating facts, how many know that Staines Town played in front of 70,000 at the Olympic Stadium in Rome in 1975? The return leg of the Barassi Cup (the English Amateur Cup winners versus the Italian Amateur Cup winners) was watched by a more modest crowd of 2,500.
For some reason, I can't find who Charlton have drawn in the second round...
Saturday, 7 November 2009
Speaking of predictions, some close ones in the Premier League today, but only one (Tottenham) was spot on. I think it'll take a few more weeks for the new adjustments to bed in before they become viable, so in the meantime it's small 'fun' bets only.
Aston Villa (2,4)
Blackburn Rovers (1,2)
Manchester City (1,0)
Tottenham Hotspur (2,2)
So 4 winners but 3 at odds on, and once again Manchester City fail to win at odds-on. Laying odds-on continues to reward. Even with a sequence of 22 odds-on winners in 23, (with just one losing in September), it is still profitable to lay these. Even more profitable - lay away teams blindly!
In the Championship, only team teams stood out as winners and both (Blackpool and Newcastle) obliged, but again both were odds-on. I went hunting for the draw in the games at Plymouth, Swansea, Sheffield Wednesday and Watford, but to no avail.
Tomorrow's expected results are draws at Hull and Wigan, Chelsea by 1 and Everton to win at West Ham by 0.5!
Thursday, 5 November 2009
As many traders on the exchanges are doubtless aware, for a little over three years Betfair has not accepted bets from the USA. For those who would like a little more liquidity in their US sports markets, that ban may soon be coming to an end.
The following is a recent article from the Los Angeles Times by Michael Hiltzik which exposes just how ridiculous this ban really is.
The U.S. approach to Internet gambling, which is legal in much of the rest of the world, is absurd. The activity is unstoppable, so let's regulate it.
By Michael Hiltzik
October 19, 2009
No issue brings out America's talent for self-deception like gambling.
To persuade ourselves that we can keep this particular sin under control, we sequestered casinos in isolated places like Las Vegas and Atlantic City reachable only by superhighways, and isolated them on riverboats where not a single card could be dealt or slot lever pulled until the vessel left the dock.
In Mississippi, the law used to say you couldn't have a casino unless it floated on water. After Hurricane Katrina forcibly relocated a few of these sin barges onto land, the Legislature, reading the disaster as a sign from God, revised the law to let them stay put. (The riverboat states, similarly, eventually allowed their floating casinos to remain dockside.)
Then there are the Indian tribes that have fewer members on their rolls than slot machines in their multimillion-dollar casinos.
Which brings us to Internet gambling.
Rep. Barney Frank (D-Mass.) and Sen. Robert Menendez (D-N.J.) have both introduced bills in Congress to lift a federal ban on much online play and clarify the law, which is even murkier than it is for physical casinos, if that's possible. Their goals include taking a piece of the action for the U.S. Treasury, on the political principle that sins always seem less deadly when there's money to be squeezed from them. The consulting firm PricewaterhouseCoopers estimated in 2007 that legalization could yield as much as $43 billion in tax revenue over 10 years if it includes sports betting, $34 billion even if it doesn't.
Another impetus is that new Federal Reserve and Treasury Department rules requiring banks and other financial institutions to block gambling transfers will go into effect Dec. 1, and the banks are screaming bloody murder about the added regulatory burden.
Internet gambling is one of those issues that shines a light on the distribution of juice in Washington.
The repeal bills delight casino companies such as Harrah’s Entertainment, which is hankering to expand its thriving poker business online and has spent about $1 million this year alone to lobby Congress for legalization. But they also leave intact a ban on Internet sports betting, which pleases outfits like the National Football League, no slouch in the Washington lobbying game.
It's fair to say that the American approach to Internet gambling, which is legal in much of the rest of the world, is absurd. (Indeed, the federal ban placed the U.S. in Dutch with international trading partners that host online gambling companies, which have complained to the World Trade Organization that it violates trade treaties the U.S. signed.) State laws are wildly inconsistent and sometimes hypocritically excessive.
"Martians might have a difficult time understanding that if you play poker online for money in the state of Washington, you're committing a class C felony," Joseph M. Kelly, a gambling-law expert at Buffalo State University in New York, told me. "That's the same as rape."
The Government Accountability Office, surveying the legal landscape in 2002, found that five states specifically outlawed Internet gambling: Illinois, Oregon, South Dakota, Nevada and Louisiana. (Washington enacted its ban in 2006.) Gambling in physical casinos was legal in every one.
On the federal level, conservatives in Congress slipped an Internet gambling ban onto the books in 2006 by quietly attaching it to an antiterrorism bill no sane lawmaker could oppose.
That federal law, the Unlawful Internet Gambling Enforcement Act, has numerous flaws. It saddles financial institutions with the duty of enforcement by barring them from "knowingly accepting payments" derived from "unlawful Internet gambling." But it doesn't define what is unlawful.
It exempts fantasy sports and "skill" games, for example. But where does that leave the most popular online game, poker? The new regulations seem to outlaw the game, although its aficionados contend that it's a game of skill pitting player against player. They contend it's been swept into the gambling ban by lax regulation-drafting.
"This law and these regulations are simply a fraud," says Howard Lederer, a world-class poker player on the board of the Poker Players Alliance, a Washington group that claims 1.2 million members. "People who had a moral agenda wrote laws and regulations that were vague. And banks, which have the sword of Damocles hanging over their heads and no clarity, are probably going to block poker transactions."
As for other games, the Justice Department bases its position that all Internet gambling is illegal on the 1961 Wire Act, which outlaws the use of telecommunication services to place bets. But federal courts have upheld Wire Act prosecutions for sports betting alone, leaving unclear whether other online gambling is actually illegal under federal law.
Banks and credit card issuers aren't happy about having to screen billions of financial transactions for signs they're gambling-related starting a few weeks from now. An officer of the American Bankers Assn. told Congress last year that the proposed rules have "no prospect of practical success" in fulfilling the explicit rationale for the 2006 law, which was to combat money laundering.
Kelly thinks it might have the opposite effect. "You diminish reputable payment processors and replace them with those who don't leave a paper trail," he says.
It's not as though the federal ban can wipe out online play any more than Prohibition wiped out drinking. It just deprives players of the protection of a U.S.-regulated environment. Gambling sites are generally regulated by their home countries -- Britain, Ireland and Caribbean states such as Antigua among them -- but that's far to go for redress.
"If a player feels cheated, he'll stop playing on the site," says John Pappas, executive director of the Poker Players Alliance, "but without U.S. oversight, he can't file a claim in an American court." The Frank and Menendez bills would require sites serving U.S. players to accept U.S. legal jurisdiction in return for licensing.
Certainly Internet gambling has its hazards, including the prospect of addictive playing and the enticement of minors. But banning the pastime forces these problems into the shadows where they're harder to address and makes it impossible to enlist the industry in helping to fight them.
It's doubtful that Congress will act in time to put off the new regulations, especially given the more pressing issues on its plate. But next year isn't too soon for it to relearn the lesson of every attempt to enforce a morality that most people don't share. If you can't eradicate, regulate -- and take a big chunk out of the wages of sin while you're at it.
Sunday, 1 November 2009
After a Red October last year, this one proved to be my second best October, and without the Premium Charge would have been the best ever. October moves up to 4th in the table of monthly averages, but on a daily average basis is in 5th place behind February on account of the extra days...
The zenith was a value lay in baseball which made up for a disastrous start to the NFL season, a sport that I am still currently down on for this season despite last weekend's 100% record.
With good liquidity for the post-season, baseball has been excellent with plenty of money wanting to back teams at low odds with small leads. I think this year has seen more come-from-behind wins than usual which suits my trading style. Game 3 was a perfect example. Phillies up by 3, and layable at 1.3 or thereabouts, but the Yankees came back to win. It did rather scupper my unders bet though!
Football and Rugby were both lucrative, and the NBA season has started well. After five days, we've had three winning days, and two losing days and as with baseball, plenty of money wanting to back teams at too short prices.
For only the second time ever, all four major sports in the USA have events today. The first time was in 2001 when the 9/11 attack delayed the World Series. The MLS also has a big game between Los Angeles rivals Galaxy and Chivas plus New England Revolution and Chicago Fire.