Monday, 15 November 2010

Football Hoi Polloi

Laying at 1000 on the exchanges doesn't seem to me to be the best way to make your money. A few weeks ago, someone laid 'no corners' for 1000 in the Wigan v Chelsea game back in August, and yesterday the Correct Score of Sunderland 3:0 at Chelsea was matched at the maximum also. While the 'no corners' lay was actually value, I have my doubts that the 0:3 Correct Score was a value lay. Regardless, I made a little on this game laying Chelsea in-play and backing the Over 2.5 goals. Chelsea's rating has decreased in each of the last six matches and my ratings show their form to be the worst in the league. The best? Surprisingly, it's Bolton Wanderers. Combine that with one draw coming in at Lorient, and wins for Bologna and Auxerre, but losses elsewhere, (Milan, Cagliari, Sampdoria, Everton and Bari - who missed a penalty) and the net profit for the day's football was a whopping £2.74. I guess I have to continue working my day job, at least for a few more days.

Reading the Trading Times blog, this post on laying-the-draw caught my attention:

Ian Erskine's FTS and system 3 what can you say about that this weekend? If anybody who reads this subscribes to his picks then I bet it was a proper brown trouser weekend. Finally after a good part of the season is gone I can say in proper Theo style .... "Im Out"

The results for the weekend were poor but more than that I just cannot see any profit being made following picks that even I could come up with. The lay the draw games are always big odds on favs, with high draw odds and then when the 'dog scores first its just wait and see if it hits the fan. The system 3 picks are laying 1-1 scorelines and again at odds of 7/1 a couple in a row mean a long wait to get back in profits. I actually think from studying the picks that your best actually backing the draw, you have a much smaller liability and if the 'dog does score first the odds come in, not out, so giving a green book opportunity. The picks for the weekend were Man City the odds were about 5.2 on Betfair laying that for £100 gives a £420 liability, the other games were just as bad and today's pick was 0-0 until the 93rd minute which would have been another hefty loss, and even though both 1-1 lays today were winners you would have had to wait to the 85th minute. Its just not worth it. So that's my take on the situation.
My draw picks are having a tough time of it right now, with just two winners form 14, but the risk to reward ratio is within my comfort zone. Laying the draw is fraught with problems. As Eddy says above, it the underdog scores first, the draw odds don't shorten, and then if the favourite equalises, the draw price is still shorter than they were at the start, and you have less time on your side. I know Ian Erskine claims to have made a million from trading football, and well done to him if he has, but you just never know where these draws are going to come from. 8.68% of matches in the five major leagues are scoreless this season, although you could reduce that number by excluding the French Ligue 1. Anyway, it's hardly a 'back swan' event.

Anonymous continues to miss the point that Football Elite are named Football 'Elite' and not 'Football Hoi Polloi' for a reason. Understanding that in the real world where most of us reside, no one is going to be able to consistently find value across a large number of matches, FE specialise. They focus on what they are good at. Currency traders specialise. Commodity traders specialise. McDonalds do not sell software. Stock-analysts do not cover every stock in the market - they specialise, and similarly Matt specialises on the matches where he can find an edge. Perhaps (long-shot) Anonymous doesn't work for NASA, but it's not that hard to understand. I am much happier subscribing to a service that offers a few quality selections than a list of 49 tips each weekend. That would not inspire confidence. But then
Time after time you show you don't understand some fairly basic points of gambling.

If you truly don't understand why someone who apparently is constantly reaping a double digit ROI is not having enough bets then there's little hope. Maybe another reader would care to explain.
Yes, I must just be on a lucky run - since 2005. Amazing. On another blog, Anonymous is no doubt advising Usain Bolt that because he's a great sprinter, he should enter Marathons as there are so many of them. Joep did try to explain, with a well-considered comment, but still the points continues to escape our Anonymous friend, or more likely he doesn't want to admit that he's being somewhat naive on this one.

Here's Joep's comment
As a subscriber to FE I'll give it a shot. For starters, Matt does offer more bets than the recommended bets listed on the website, he also offers so called "short list" bets, on average about 5 a weekend, that are on average so far profitable, yet not as profitable as the main picks. I personally see them as value picks, yet second rate compared to the recommended picks.

Secondly, FE recommends 4% stakes (or a 25 point roll) for every recommended bet. A tipster that uses such an agressive betting strategy needs to have a rather large edge in his bets.

Say for instance the average odds of FE picks 2.5, according to Kelly the picks need to win at least 42.4% of the time, which equates to a little less than 2.36 average odds. This means that the payout needs to be over 10% of the true odds (in this example) to be able to use such an aggressive betting strategy. If one would incorporate weaker tips, say those where the payout is only 5% over the true odds, according to Kelly, no more than 2% of the total bankroll in the same scenario. In order to maintain the same absolute profits in this system, the number of picks should be more than doubled with all long term profitable picks, which is a hard thing to accomplish in my opinion.

So by increasing the number of bets provided, even when they are slightly profitable, due to the increased volatility, you're forced to reduce betsize and thereby losing ev instead of gaining it.

I know that FE historically offers more value than needed in order to use optimal Kelly using a 25 point system, but I'm sure that's a choice Matt made to build in some security into his system, which would also be incorporated if he would choose to include weaker tips. Also, I think most, if not all, long term successful tipsters only use a fraction of Kelly instead of full Kelly, so his choice here is also very reasonable.

I hope that story made some sense to you and that my math isn't off :).

Correction: Oh, I did err on the safe side by using 5% edge on all bets in the 2nd example, could get rather complicated due to 2 unknown variables otherwise and I'm not exactly a math expert.
Thanks Joep, although here's the reply:
I'm not quite following your explanation fully.

One point. If the staking plan is based on Kelly, then why is each bet the same size (in % terms).

Even if you aim for, say, 10% value for each bet (too high, just an example), your perceived edge on each bet won't be precisely 10 % so therefore stakes should vary if using Kelly.
Football Elite doesn't actually tell its subscribers how many points or percentage of the bank to bet. That is entirely up to the individual.

A slightly bigger profit was achieved in the NFL action today, so I can afford the commute to work at least. The SBP went three out of six, a reasonable outcome for a coin-toss - and I actually made most of my NFL profits today on a team he had picked - the Seattle Seahawks, who seemed excellent value to win the NFC Division game at the last placed Arizona Cardinals. I picked up a little on the Miami Dolphins win over the Tennessee Titans and on the late game where the New England Patriots continued their tremendous record in games following a defeat - one loss since 2006.

A quiet day in the NBA with the Utah Jazz not in action after their unbelievable road trip, (it'll be interesting to see how they play later today at home to Oklahoma City Thunder) and only five games to choose from. In-form Minnesota Timberwolves covered the spread via the back door in the early game at the even more impressive Atlanta Hawks, and the Los Angeles Lakers again started too short (1.22), this time against the Phoenix Suns, but I messed this one up and managed to turn a good position into a bad one.


Joep said...

FE does advise on staking plan, for instance the 8.12 points profit he made this year equals 32% ROC, which would be correct for a 25 point staking system.

Also remember Matt saying in an email he advises a 25 point bankroll, think it was in last email of last season or the first one of this season. (40 points for the shortlist bets)

Anonymous said...

Again, you're missing the point.

The Football Elite P/L stats show a very high ROI.

The high ROI suggests they have a strong edge.

Let's assume the ROI over time is 15%.

Such a high ROI means they are very good at what they do (I'm assuming the stats to be correct - there are numerous ways of twisting ROIs in your favour).

Given the level of expertise they appear to have shown, then it's almost beyond doubt that they should be able to spot bets that offer less value but still have a positive expectation.

Therefore they should be using their expertise to bet on these lower value outcomes and highlight these to their subscribers AND include them in their breakdown even if it means reporting a lower ROI.

Now, there are various reasons why tipping services may be reluctant to do so:

When looking to attract subscribers, a high ROI easily grabs attention.

Conversely, a lower ROI may put people off and hence lower the income generated from the service.

If I were to be looking for a quality tipping service, I would be looking for the highest possible PROFIT over a period of time, not the highest ROI.

15% on 100 units over the course of a season equates to a 15 unit profit.

10% on 200 units equates to a 20 unit profit.

Which would you prefer?

Let's make the example more extreme and pretend FE finetune further and look for 50% ROI. The unit stakes will decrease further, the ROI will increase (this is assuming calculations are made over a significant sample size).

Would you rather FE looked for 50% ROI, and tipped up only those bets, or 15% ROI and tipped up many more? The answer's obvious.

Successful long-term professionals would be more than happy with a 5% ROI. The very best would be content with an even lower figure.

The better you are, the lower your ROI will be. The better you are, the higher the turnover will be and the profits will be greater.

If you have an edge, then use it. Profit is the name of the game, not ROI.

For a good gambler to look for too much value is to underestimate their quality. And long-term they are missing out.

The specialisation examples you use are misleading. To specialise in an area should mean you are capable of spotting smaller pricing errors than if you tried to take on all areas.

Profit maximisation dear chap.

The world is not flat but you'll probably argue the toss with me on that too.

I note with interest the decreasing returns on your "strong draws". The fortunate strong start this season may keep you in profit for a little longer than I would have expected. I trust you will keep us informed.

How are your winning margin bets coming on?

Anonymous said...

have been following the debate about profits and ROI for some time, I have come to the conclusion that rather than keeping and analysing my own stats I really should use a tipping service, which would save me a lot of time and effort.
By chance I had an interesting e mail from a Kumai Assabuda who is a Nigerian witch doctor. Kumai
also has a very strong interest in European Football and has found
that by throwing his bones into cold ashes before cock crow on a thursday he can predict correct results 90% of the time. By using his staking plan, the profits have been quiet amazing ( I have followed his results since the beginning of the season).
Rather than charge an up front fee,he will just take a share of the profits, obviously you have to use the staking plan, so he can calculate your profits. I have given him my bank details so that he can take any monies owing to him.
I checked my bank balance on the way to work this morning and judging by his fee, I will have a nice balance on my betfair account when I check it later this evening.
If you are interested Anonymous I can let you have his e mail address.