Wednesday, 16 June 2010

Holy Fix

A poster on the Betfair forum is under the impression that “the best professional gamblers hope to make 4-6% a year”.

He’s wondering ‘why bother?’

Wild statements like that reveal a not so sharp mind. That figure is of course a generalization, and it refers to percentage of turnover, not percentage of bank.

Pro punter Patrick “part brain surgeon, part mad axeman” Veitch claims 16%, whereas Harry Findlay reckons on no more than 8%.

The differences in part are due to betting styles. Findlay appears to favour lumping on at short prices, which makes achieving a large ROI rather difficult.

Veitch has a different style, which is basically that he owns horses himself and uses information from racing insiders to gain his edge. One example from his book talks about backing one of his horses, Exponential, in from 100-1 to 8-1 and winning himself £235,133.71 in the process. With a betting style of that nature, a much larger ROI is possible.

As an aside, although the author, for obvious reasons, tries to play down the influence of his inside information, what is revealed should be enough to put anyone on the outside off horse racing as a means of investment. One forum poster who claims to have lost close to £200k in the horse racing markets before finding an edge said of his horse betting

“…big mistake, I did not lose money to the market. Overall I was robbed by the bent market of horse racing, believe me, don’t believe me, but since those silly days, I have done well enough to schmooze with certain smaller type owners and my worst fears about the industry have always been 100% confirmed”.
My experience also.

Back to profits though, and it’s not all about ROI, it’s about turnover too. It’s better to have an ROI of say 8 per cent on turnover of £5m than an ROI of 16 per cent on turnover of £1m. This is important if your edge is in something like the Eurovision Song Contest or worse, UK General or Papal Elections. (Even worse would be North Korean General Elections I suppose, and with the winner already known...)

To take an extreme example, if you made your living from hovering, snapping up all those 1.01s on tennis, football and horse racing with your fast pictures, you would never have a losing bet, your ROI would only be 1%, but you would have a steady income every day.

If you’re limited to Papal Conclaves, your ROI might be huge, but your opportunities are somewhat limited.

1 comment:

Anonymous said...

What is your ROI Cassini?

Personally, I aim for 5%. If I make something 50% I won't play at a price under 2.10.

If I make something 58% I need 1.81

I tend to feel more confident when I price outcomes between, say, 40-60% which is normally the case when backing handicaps and the like. I would normally look for a slightly bigger edge with more "extreme" numbers.

I'm actually bang on 5% for the last couple of years so something is going right.

Of course, to look for a 5% edge you need to price up an event in the first place rather than rely on feel. Something which lesser quality bettors struggle to do.

I'd be interested to know how, for example, would you have priced the Germany -0.75 market v Australia?