Wednesday, 4 March 2015

A Ton Of Luck

I mentioned in the last post that taking an ROI seriously after just 100 bets probably isn't the best of ideas.

The FTL this season illustrates quite neatly how different entries have gone on good and bad runs. The six monthly prizes have each been won by a different entry, and there have been five 'worst of the month' losers. For those wondering, it is Fairfranco - he managed to have the best record in November, followed by the worst record in both November and December.

Peter Norsted's Drawmaster is another good example. After 100 bets this season, Peter's ROI was an impressive 18.9%

However, a prospective investor carrying out his (or her) due diligence, would have looked at Drawmaster's record in 2013-14 (-16.45 points from 183 selections, ROI -8.99%) and suspected that a regression to the mean was likely.

Sure enough, after 222 bets so far this season, Drawmaster's ROI is -8.5%, and over the two seasons combined, the record is 405 selections, -35.40 points and an ROI of -8.74%, which is not quite as impressive as that 'middle sequence' of 100. 

Peter writes about this, saying:
We are going through a bit of a torrid time with the draws and indeed we have only had a couple of reasonably successful weeks.
The draws should at least be hitting 30% however currently we are hitting around 27%
Last season's strike rate was actually 26.8%, so this seasons 27.5% is an improvement. but here the ROI is a more useful measure of success than strike rate. The torrid time may be relative to the lucky start, but 27% is close to the long-term strike rate.

I'm not sure what Peter means by 'should be hitting around 30%'. He includes some leagues that I don't touch, but in the top five European Leagues, the overall strike rate for draws is 27.2%.

In the Lower Four English leagues, the strike rate is 25.1%. League One and the Conference National are at 10 year lows.
Overall in these nine leagues, the draws are hitting at 26.0%, a number that is beaten by four of the Draw Portfolio members, but only two of whom are currently showing a profit. It's worth mentioning again that the prices used in the FTL are usually beatable, so these numbers are on the low side.

It would be interesting to know why Peter thinks his selections should be hitting at 30%. 

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