Sunday, 10 November 2013

Sporting Differences, Innate Ability

Cobo asked:
Hello Cassini, Are you sure that "advanced not publicly available stats" reasoning can only be made for NBA? I don't know, it may be the same in baseball, hockey, tennis... At least I really don't know where to get info like distance a tennis player run on each match, placement of shots, etc... and that is being tracked for sure. Of course, in that case the effect anything has on the player is even bigger than in basketball. I talk about tennis as it is what I trade, but the situation may be the same on other sports. Also, as much as I completely agree with your post on numbers VS intuition (people not relying on numbers), I certainly think there are people with an innate ability to price risk and take advantage from it consistently. Needless to say, these are just a few compared to the number of "pro" tipsters giving advice. Coming back to the NBA, if they have those advanced stats they for sure should be able to track the price in play far more accurately than you or anyone else.
I don’t believe I ever said that, and I certainly never intended to imply it. There may well be other sports it applies to as all sports are different, and need to be looked at individually. I just happened to be comparing football and the NBA in response to RandomMan’s comment, and because those are two of the few sports that I actively involve myself with.

Each of the three sports mentioned, baseball, hockey and tennis have their unique characteristics. Baseball is laden with statistics probably more than any other sport, and it is a series of short plays from a limited number of states. I doubt that there is any meaningful data in this sport that is not publicly available. Hockey has similarities to football (team sport, low-scoring), but the all-important power-play is a big difference, as is the importance of the goal-tender. Not as important as an all-star player in a basketball team though, a sport with a similar number of players but very high-scoring. Tennis (specifically singles) is an individual sport, and obviously anyone in the player’s inner circle, including the player themselves, is at a huge advantage, and as Cobo says, even more key than in basketball. Tennis is also technically the same sport whether played by men or women, but everyone knows that in practice the two are essentially different sports and need to be treated as such from a betting perspective. The inner-circle comment applies to horse-racing too, and here we have a sport where connections know a runner isn’t going to win, and it's an accepted part of the sport. Just don't be too obvious about it. Remember my Two Swallows story? I do, and a good lesson.

Regarding the use of stats versus the in-play price, the NBA teams who currently pay for the data are not interested in the betting angle – they are interested in winning games and the data they collect, is collected for that purpose. Their advanced stats will tell them, for example, based on the current opposition line-up, what match-ups and plays would be optimal, but not what the prices should be when up by five with 2:23 left in the third quarter, one all-start player with three personal fouls and another having an off-night shooting bricks. This might well change if in-play betting takes off in the USA, but for now at least, a combination of understanding the game, and understanding the market, affords an outsider a good chance of long-term profitability.

The reason that in-play offers value is, as I have written many times in this blog, that the market - driven by fear and greed - often overreacts and someone with the ‘innate ability’ to price accurately can profit from this. The ‘innate ability’ isn’t actually innate at all, but something learned from studying the markets and watching hundreds of games. After a while, you instinctively ‘know’ when a price is wrong – that ‘blink’ moment I have written about. Look at the chart towards the end of most NBA games, and see the ups and downs.

Some of those movements are down to errors – perhaps it is greedy people forgetting that basketball is a game of momentum, or a nervous nelly not understanding the impact of two early personal fouls on LeBron James. These errors in pricing do not occur, or at least not with any real money, in the settled pre-game markets where decisions are more deliberate (as in after long and careful consideration). In-play, he who hesitates is lost, so you need to instinctively ‘know’ value when you see it.

Contrast the basketball chart with one from football, and you’ll see why I am of the opinion that trading football in-play is, for most of us, unlikely to be a profitable activity long-term. With prices changing in minimum increments, and often stalling, there are just not many non-Suspended price-changing moments in football to take advantage of, and when there is, we are unlikely to be at the front of the queue with several thousand people watching the games in many countries.

Emp writes, perhaps a little patronisingly awarding me a Gold Star for my knowledge:
I am impressed you've done your homework and know why home-field exists in almost every sport. It's also worth noting that this is most pronounced in basketball, because more than any other sport, refereeing is highly subjective. Very large numbers of fouls, many of which are close/either way calls, not to mention that superstars at home can go from the locker room to the court without being called for travelling.
I can at least die happy now, knowing that whatever else I achieve in life, there was always that one time when Emp was impressed. It means a lot to me.

His final line was actually quite amusing, and I’ll give him the benefit of the doubt that with English a second language, he didn’t actually mean to come across quite as patronisingly I have suggested. I like to think that occasionally I know what I’m talking about.

Tyttetrading had this to say on my response to RandomMan, and his perfect English makes the point very clear :
Hi, also, I think Cassini did explain it in and earlier post. The difference is also in the difference between trading/betting using knowledge about the sport or if trading/betting using knowledge of the markets. As mentioned in many posts, one of the reasons for the value that often appears on the draw in soccer matches, has nothing to do with the sport. It's because the bookmakers adjusts there odds to level their risk. Most bettors want to bet on a team, meaning that not much money will go on the draw. To attract money to the draw, and thereby level risk, the bookmaker can offer higher odds on that outcome. I hope you understand my point, my English not being perfect (sure that Cassini will point that out:-)).
Finally, does anyone else find it quite amusing or bemusing that Ladbrokes are now actively touting their Exchange, while Betfair are actively promoting their sportsbook?


Emp said...

I think this may be cultural rather than a second language issue. English is my mother tongue for all practical purposes, though I speak two others. Does homework have a negative connotation for you?

I just said your research was impressive, why would that come across as patronising? Research is very important, and I don't think this is a very elementary observation; certainly, large numbers of blogs, sports-betters analysts and others haven't realized this, so it certainly is impressive, even though I guess you may have taken it for granted that anyone should know.

Emp said...

More on topic,

I do think that with regard to both in-play as well as pre-game, you are falling a little into the difficult/impossible conflation.

It's true that very very few people will have edges against a market dominated by smart money, but that isn't the same as impossibility.

The ease with which countless bettors manage to lose well over what they would with a random coin-flip selection method and level stakes implies that it must be possible to be profitable without inside knowledge.

Indeed if NBATipsGuy is as consistently bad in the future, his tips are as good (and probably better) than any of yours or TFA's.

It's obviously essential to contemplate what your edge might be, but I think it's also a mistake to ascribe deity status to analysts simply because they are running a hedge fund, have fancy computer models and swing a big line. Plenty of them manage to lose as well.

Cobo said...

Thank you for addressing my doubt in length Cassini.

It's true the markets pre-off are very very accurate and difficult to beat. At least in tennis they are, and they have improved even more these past three years. This is a fact. Or as some people say, a true fact.

Regarding in-play, it's true lots of things can happen that make the price more difficult to assess. That plus fear and greed.
Anyway, if there are opportunities in the Stock Exchange, which has far more people and money trying to profit from it, there is no reason to think betting exchanges should behave differently (except perhaps having more opportunities from that lesser competition).
Of course, having advanced stats of historic in-play game action from a team/player will always help make a better decission.


P.S: And English is NOT my mother language, so please forgive any mistakes ;). Thanks again.