Sunday, 14 March 2010

Value - Or The Greater Fool Theory?

"Finding value in a gambling market and investing are not at all similar in any respect"
was the well argued comment by (of course) Anonymous, backed up with no examples or evidence whatsoever. I guess it shouldn't be a surprise that these dullards hide behind the cloak of anonymity when their ideas are simply nonsensical.

So finding value when investing in stocks, currencies options or sports doesn't matter ...except of course, that if you are not finding value in either, you will lose money. The principles are the same whatever the market, and anyone who thinks they can make money in the long run without finding value is someone who is in for an expensive lesson. The Greater Fool theory will catch up with you sooner rather than later. Of course, the comments are open if anyone can give a reasoned argument as to why value isn't important in the long run.
To make money, you need to be finding value. If you are making money, you are finding value, even if you are blissfully unaware of the fact.
Again a quiet day today starting with an easy win for the Queensland Reds over Western Force in the Super 14. Priced at a generous 1.38 before the start, Reds won by a club record 40 points and the outcome was never in doubt.

There were just three football investments today, all punts from Football Elite. Two recommended bets, with Bologna (2.68) only able to draw with Sampdoria, but Almeria at 2.14 beat Malaga, and from the short-list, Tenerife at 2.36 beat Espanyol for another profitable day. I have a feeling that the Manchester United 3-0 score over Fulham was probably a bullseye for the ratings, but until I can catch up the numbers I won't know for sure.

Someone (anonymous again of course) left a comment a few days ago during the debate on odds-on value about the success of Mike from the winabobatoo tipping service. From reading JP's blog, it appears that this service is in fact NOT a great example of finding value at any price, and even if Mike did once hold to the philosophy of not backing at odds-on, he has now re-thought that with selections being made at odds-on.

While we're on the subject of tipping services, I'm considering adding a second subscription to the Cassini Investment Portfolio - this time to the Sports Betting Professor. Jon at Talkbet has found this service to be profitable, and other reviews around the betting forums are similarly favourable, so watch this space. The Sports Betting Professor covers the NBA, NFL and MLB and is statistically based, which is right up my street.


Anonymous said...

Hi cassini - Gt blog, keep the posts coming.

I'm a subscriber to the SBP and can only echo what Talkbet has said. Excellent service. I've only been on it for 6 weeks but up £140 approx based on £10 level stakes.

Anonymous said...

Sorry mate, you only need to look at the home page to see it's just another typical american betting service. Probably riding some short-term luck at the moment. Wouldn't touch it with a barge pole.

Good to see you're suddenly into rugby when you can claim you had a nice win. How long did it take you to find a game where there was such a convincing result you can pretend you backed.

Anonymous said...

Hi Cassini,
Have enjoyed reading your blog for a number of years now.
Your current articles about value is certainly thought provoking. I think that it is very difficult to actually define value in investing/betting as everybody has a different idea of what value actually is.
If you look through the history of the stock markets, there are many examples of people who have made (and lost fortunes).
You will no doubt remember reading about Hetty Green in New York (I recall you wrote a small article on her a while back). She did inherit money, however her aim was to compound her money by 7% pa. This was done through bonds equities even jewellry. Buying when everyone was selling and selling when people were buying ie going against the crowd. If you go to the other extreme and look at Larry Livermore (the boy plunger)he was only concerned with market direction (the line of least resistance)and in his lifetime he made and lost many fortunes trading those directions.
Turning to the betting markets up until the advent of Betfair it was estimated that about 5% of gamblers made a profit every year, however, with the popularity of Betfair I would suggest that the 5% figure has increased because the laying of sporting events is now possible.
I recall reading an interview with Harry Findlay who estimated that if you made 9% on turnover, then you were doing very well.
Probably the biggest difference between stock markets and betting markets, is time scale.In the stock market a share can be researched and if it meets your investment criteria you buy the share. If after buying the share it drops say 20% its now a dog, however if you decide to hold the share and after say 18 months its 50% above your purchase price you are very relieved and probably consider yourself the next Warren Buffet, however when holding the share where do you differentiate between good and bad value?
With sports betting/trading like every form of investment/trading the real value is in the amount of effort and methodology that is put into carrying out your research and your knowledge of the market you wish to participate in. In addition discipline is required to stick to your methodology.
After my ramblings I would suggest that value cannot be measured because being individuals we all have an interpretation of values.



Anonymous said...

"I guess it shouldn't be a surprise that these dullards hide behind the cloak of anonymity when their ideas are simply nonsensical."

Touche, You hide behind rhetoric and there is no evidence anything you have ever said on the blog is true or that you make any money at all. When challenged you just tell everybody they are wrong and you are right. No evidence has ever been posted that you are actually ever earning any money from your own advice.

Anonymous said...

Completely wrong cassini.

When you invest you are paid to hold stock as an owner of a company. The company invests your money and produces a return. The longer you hold it the more chance you will make money.

When gambling you need to find something that is badly priced. That is all. No element of investing ever takes place and the two are not comparable in any respect.

If trading currencies or options you are speculating that you can buy and sell and take some money out the game. You don't really care about price or general direction, you just want to turn a profit.

All three are very different and are not related.

Anonymous said...

Cassini is just some dullard blogger taking thru his arse with his own perceived air of authority. Most of his value bets lose, I read quite a few blogs and like cassini all the losing ones avoid talking about the real aim of gambling their pnl.

Anonymous said...

Pretty unfair comments above as I don't think Cassini has put much stock in how much/whether he makes money as they are generally an irrelevance to his interesting pieces. He does come over a bit pompous but I think that's just he's writing style and anyway we are all making up this full time betting lark as we go along.

I'm slightly unsure about your faith in tipsters at the moment as I know in the past you've been against them. JP's blog could be a lesson on whether tipsters work as his short term losing run seems to be turning into a longer term one (from around August last year) and this is somebody who seems quite effective at getting early prices.

Anonymous said...

I suspect Cassini's ratings predicted Liverpool to beat Portsmouth by three goals in the first half tonight. Bullseye.

Anonymous said...

Of course he predicted a 3 goal spread, somehow I doubt his betting account did though