Tuesday, 23 October 2012

Looking Down

Poppy Appeal
Following on from the weekend, I had a couple of interesting emails / comments to mention.

First was an email from Football Elite’s Matt, talking about the poor results of late for his Recommended Bets. Down 4.15 points on the season, ROI – 31.9%, is certainly not where Matt would like to be a quarter of the way into the season, but as he says, we have no control over the sequence of our results. If bets are value, then long-term they will be profitable, but there are no guarantees in the short-term.

Drifting off topic for a second, I received a request on the XX Draws site asking:
Please, can you give 4 or 4 u.k. football matches that will not fail to result to a draw? If yes, how much can it cost me in a week?
Not asking for too much, is he? The answer is no, I can’t. Neither can anyone, and certainly not when it comes to draws! There is no prediction in football that cannot fail. All we can do, whatever our niche selections are, is find matches that, in the long run, will prove profitable because our evaluation of the true probability is more accurate than the market’s. Which is easier said than done of course.

Back to Matt and I can empathise with him, especially now that I send out my own XX Draws. I probably shouldn’t allow it to, but running a service does make the weekends a lot more stressful than I ever imagined. I feel more than a little responsible for the outcomes of my selections, and late goals such as Atletico Madrid’s on Sunday night have the potential to ruin one’s day.

We all know that bet size is meaningful only to the individual, but I know that at least one person puts $500AU on the Draw and Under 2.5 goals markets, and to me that’s a lot of money for a bet of this nature. Having sent out my selections though, what people do with them, and the stakes they use, is out of my control, so perhaps I shouldn’t let it worry me. For all I know, several subscribers might be laying the draw on my selections, and keeping a table somewhere showing the outcome!

At least this week the news from Australia made for pleasant reading:
XX Draws had an amazing week with over $6,000 profit. All the profit was wiped off by FB Elite who is having a terrible season and FB analysts Euro picks.
One thing the pressure doesn’t do though is influence the selections. One advantage of an automated, or at least objective, selection process is that emotions don’t come into it. Matt is second-guessing his decision to make most of his selections Draw No Bet recommendations, although to me, the long-term returns should be about the same however you back the selections, so it all boils down to what your comfort level is on losing streaks.

Shorter prices, mean shorter losing streaks, which means smaller, but more frequent, winnings. Longer losing runs are the opposite, but the net returns should be about the same. I say 'should' because in a small sample of matches, randomness manifests itself and net returns can be quite disparate.  Look no further than the XX Draw results. Selections are made according to the same criteria, but individual bets run hot then cold.

Back to Matt, and his thoughts on how switching from the more aggressive win only bet to a DNB selection may have affected his selections:
Having that draw safety net there may be subconsciously affecting my selection process. I know I shouldn’t let it of course, but that is easier said than done. I’m not generally a fan of automating everything into ratings and/or systems in football as I think it’s a sport that needs a bit of manual intervention but the downside to that is it leaves you open to falling victim to natural human weakness. In this case I don’t think it is in terms of the bets I’m picking but in terms of the bets I’m not picking. Those 2.0 – 2.25 win bets that keep things ticking over are harder to pick as 1.4 DNB bets as there’s kind of a subconscious need to have a higher standard and take less of a risk at those odds. Stupid, but human nature. I’m writing this here and not hiding from the fact as I think it’s important to publically acknowledge when you’ve messed up to ensure it doesn’t happen again.
A very honest assessment, and I hope Matt doesn't mins my repeating this except here. Although Matt records his bets as he should, none of his subscribers are obligated to follow them exactly. I often compare his selections with my own, and may leave his selection alone, may play the bet as recommended, or may play it differently. If the selection is Genoa for example, you can back them to win, lay the opponents, back with DNB, back them on the Asian Handicap, back them to win either half. It's all up to you.

Chris posted a comment:
Good update, must take you a while to process all the results although probably a little more fun when the table is screaming out that the XX draws service is currently beating all comers. Still it's a long season so there is still hope for the rest of us...
Well, not exactly. The flagship of the XX Draw fleet should be the Classic selections, with the red-headed stepchild the Bundesliga picks, but leading the way by some distance are the Extended selections, and boy am I glad I decided to include those for this season!  But at least overall, the X Draws are in profit. 

And then we had this very interesting observation from Henke:
One of the problems I see is that most of the people are only inclined towards the major leagues. Like the premiership, most of the time it is harder to draw conclusions than say, even compared to the Bundesliga. My tip would be to select a niche "not-so-much-popular" league, focus and follow it for a whole season seeing what you could get away with. For instance the Dutch League, the 2nd Dutch League, the Scandinavian Leagues, the Turkish league might be a better value, as the odds are usually slightly higher for favourites (especially in scandinavia). Obviously they are harder to guess, but as I said a focus on a niche market rather than playing just for the major leagues, especially the Premiership, might perhaps be a good idea. At least for experimenting to see what you could get.
Moreover I always believe there is quite a lot of money to be made especially on UEFA cup due to differences in league qualities. Although last round was a bit weird, playing handicapped for the favourite might be good idea. As said, experiments on that could be made.
While guessing isn't my practice, this is something I have thought about in the past, and intended to get around to this season, but never quite did. It may be more glamorous to scan the matches involving teams from Milan, Madrid, Manchester, Marseille and Gelsenkirchen but as I have noticed in other sports, the widespread attention these matches attract doesn't necessarily mean bigger profits, and quite often it means the opposite. If you know what you're doing, liquidity is overrated.  

There are good reasons to pick the top leagues, one being that the teams stay more constant than lower leagues, with just two or three teams being replaced at the end of the season. There's a wealth of data out there, but of course everyone else also has access to the same data, so while finding an edge might be tough, at least you shouldn't be too far wrong with the efficient markets. TV coverage is readily available, so you can watch your selections in action, although again, this might not be a good thing. The justification that by picking the top leagues, you are ensuring a fair game doesn't even hold true, as is shown by the shenanigans seen in Serie A, but drop down too low, and you have other problems. Smaller squads mean that key players really are key players, and any injuries, personal problems etc. can mean that your value price really isn't.

I've always felt that Leagues One or Two might be a good one to try this theory out on. It's English for a start, which means decent media coverage, and the possibility of a fix is in my opinion very small. I wouldn't be so sure about some leagues to the East in Europe. League One sees close to a third of its composition arriving from either above or below, which means early season form can be unreliable, but there are more games so it's not all bad. Non league always seems a little too low, with teams folding rather too often these days, or at least going to administrations. Boston United, Salisbury City, Chester City and most lately Kettering Town, to name but a few. I spent many happy hours watching Kettering in my youth, and very sad to see their decline of late. 140 years of history about to disappear.

Anyway, it's a great point, and from a purely financial viewpoint, I can see that a competitive and professional, though less well studied, league should offer greater potential than a Real Madrid v Barcelona game, where you are looking for your edge along with literally millions of people.

I think I've talked myself into a new set of Elo ratings.

1 comment:

gundulf said...

Cassini, whilst I appreciate that the various selections you and the others make for your Friendly Tipster League are essentially straight backs I can't help wondering how often over the last season a late goal such as Falcao's on Sunday snatches defeat from the jaws of victory?

I'm sure you keep good records and am further wondering what effect on your p&l and roi a simple hedging at say 85 minutes (or 40 mins for the H/T selections) would have had?