Sunday, 2 March 2014

Illogical Lays

I had a good question from a subscriber regarding the Bundeslayga Selections for this weekend. With Borussia Dortmund priced by Pinnacle at 1.286 at the time of the email, I added a comment that:

Borussia Dortmund will not be a selection if they shorten to 1.26 or less
Not unreasonably, I was challenged with:
Why would you not want lay Dortmund if they go shorter ?
A perfectly good question, with the answer being that these selections are based on a perceived weakness in the prices of some favourites in the Bundesliga, rather than based on the matches themselves.

Any system based on prices should make no sense at all, since there is no inherent reason why any price band should be wrong over the long term, and basing a selection on what the market thinks rather than what you think, is diametrically opposed to the logical method of identifying value by determining your own price and comparing it with the market's.

In the short-term, short being a relative term that may well cover more than one season and/or hundreds of bets, there will be always be what appear to be weak spots, but they won't normally persist. We humans look for patterns where none exist.

Take any full season's worth of data from any league, and it is 100% certain that you could find a winning 'system'.

Back the draw in matches where the home team is priced between 2.0 and 2.99 (English Premier League 2012-13, 134 Selections, 51 Winners, +43.38 points [Pinnacle prices]).

Lay the draw in all matches (Eredivisie 2009-10, 306 Selections, 244 Winners, +25.27 points [Average prices]).

The thing that makes the Bundeslayga unusual is that the system has been profitable for several seasons, and that the profile of the league provides a reason why this should be. Selections are also from a fairly broad band (1.3 to 2.0) and while it's not a system that will make you rich, it is ideal for generating a slow and steady profit and mitigating either current or future Premium Charges.

Any time a selection is made from a narrow band, say 1.6 to 1.69, with no logical reason why this band should be different, it is likely to be the result of back-fitting, and it is unlikely to be profitable in the long run.

Similarly, any claims to have a winning system based on just a few selections or over a short period of time, should be treated with a large degree of scepticism.  

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