Sunday, 15 March 2015

Professor And The Peons

Tage is becoming quite a regular commenter on this blog. It may simply be that Danish doesn't translate easily to English, or it could be just me and that I am getting sensitive in my old age, but Tage's commenting style comes across as a little brusque at times, if not downright passive-aggressive. That he is an intelligent man is not in question, but the manner in which he treats lesser mortals (i.e. pretty much everyone) is.

Quoting this sentence from my post earlier:

"For me, successful betting starts with finding an edge, and this is the hard part. Once you can generate selections with a high degree of confidence in their long-term profitability, then you can play around with staking methods to increase your profits."
Tage has some comments:
Most bettors subscribe to services, they are unable to find an edge by themselves.
I beg to disagree here. In my opinion, only a very small percentage of bettors subscribe to services. 
Most tipsters use level staking, they are unable to find a better staking method.
While it may be true that most tipsters, although certainly not all, use level staking in recording results, one good reason they might choose to do this (rather than be "unable" to) is that the merit, or lack thereof, of the picks is readily apparent with level stakes. Variable stakes tend to obfuscate results. It's one reason why the FTL mandates one point bet per selection. Besides, one could make the argument that the tipster's task is to give the true prices for matches and let the subscriber decide if there is enough value, and what staking method to apply.
There are a few good services that use f.ex. (fractional) Kelly staking.
Good for them. Kelly is the King in theory. Fractional Kelly is the King in practice.
Staking is actually 'only' applied math (Utah paper) whereas building a profitable model requires math, statistics and more.
A closing comment which rather supports my assertion that finding selections with an edge is the hard part of the selection / staking process. I am well aware, as are all readers of this blog, that staking strategies can improve systems that are 'profitable at level stakes'. What they can't do is make a 'losing at level stakes' system profitable.
The fact that most tipsters don't use better staking methods is for me evidence of a lack of necessary education.
A rather elitist comment. Since when has the betting business required a 'necessary education'? It's patently obvious that many so-called 'betting experts' are not well educated - a quick look at how poorly many blog entries are written is a big clue! The lack of any regulation and the ease in which anyone can set themselves up as a tipster is one of the reasons why it is important to be diligent before subscribing.

But it is not up to the tipster to baby-sit subscribers. Only the tipster knows what staking method they use for their own selections, and as said previously, recording official results to level stakes is good for comparison reasons. A service might suggest a stake for subscribers, but ultimately is up to them to stake how they wish. I'm sure that at the end of a season, it would be rare for any two subscribers to a service to have exactly the same returns.  

That a service doesn't send out recommended stakes isn't necessarily because the tipster isn't as well educated as the brilliant Aarhus Professor Emeritus Tage. Some tipsters want to avoid the 'nanny' approach.
Many tipsters are just 'monkeys throwing darts'
Joe Buchdahl has showed this in his books and on his website.
Correct. The problem with a hugely popular sport like football is that finding a long-term edge is very difficult, and a season is a short-term window. It behoves the potential subscriber to be diligent and research a tipster before parting with their money. Even more so than the financial industry, services all come with an "As with any investment, a services past performance is no guarantee of its future success". Questions such as how are results recorded are key.

Longevity is always a plus of course, and the likes of FTL entries Football Elite, Football Investor, Skeeve and The Football Analyst have all been around for a while.

Tage also had a comment on the FTL itself, specifically in regard to the formula used for settling lay bets. Although I should probably ignore it, given his petulant demand to "Please comment on your blog", (he must think I am one of his students), I will simply say that the rules were laid out from the beginning of the season, and following constructive input from Jamie A, amended slightly in September. Updates were communicated on the blog at the time.

The relevant rules are:
Selections will be recorded against the Pinnacle Sports Match Odds prices. For back bets, this is self-explanatory. For lay selections, the price used will be Pinnacle’s +0.025 (for odds-on or evens selections) and +0.05 for others. Thus for example, a winning lay at 2.00 will be recorded as a profit of 0.98 points.
Following Jamie A's advice, the following adjustment for odds-against lays was introduced in September:
The rather naïve assumption on my part was that lays would be mostly at odds-on and shorter odds-against, but the fixed formula needs to be changed so that higher lays (2.5+) are being made into a market that mirrors that for back bets.
The same rules apply to everyone, and the implication that they give me an advantage that others do not have access to, is frankly very irritating. Perhaps Tage missed the September update, but regardless the rules are the same for everyone.
"In fact the way you settle odds on bets gives you an advantage of at least 5-6% compared to Pinnacle prices which are used for all other bet types.
All odds-on and even lays use the first formula; all odds against use the second. Using two formulae admittedly isn't ideal, but as the September post makes clear, the decision was based on a naïve pre-season assumption and making wholesale changes in mid-flow was not a solution I wanted to apply.

Given his current position in the FTL table, despite using Backs and Lays himself at various times, might I politely suggest that Tage (Sjosta) would be better served spending some of his apparently plentiful spare time and incredibly superior intellect in working on finding profitable selections rather than finding fault with how hard-working tipsters (notably TFA and FI) run their services and casting aspersions on the integrity of the FTL which I am running as equitably as my feeble brain will allow?

It takes enough time as it is each week to make the updates without having to respond to spurious accusations. I'm two hours (all unpaid by the way) behind schedule now!


Joseph Buchdahl said...

"a winning lay at 2.00 will be recorded as a profit of 0.98 points."

Pinnacle Sports don't offer margins of 0.5%. If -0.5 is 2.000, a typical price for +0.5 will be 1.9 to 1.92 for a high volume market.

You could never make a profit of 0.98 from a 1 unit stake betting on a football market where one option is priced at 2.000 at Pinnacle.

Cassini said...

Hi Joseph – Thank you for your comment. To give you some context and background here, the calculation you are referencing is from the Friendly Tipster League – it’s a season long private (28 individuals), friendly contest and is not, and is not intended to be, a verification service of any kind reporting precise numbers. I leave that kind of thing up to you!

Several established tipster services are participants, but the expectation is not that their official returns will match those of the FTL. Rather it affords them the opportunity to showpiece their talents and the merits of their selections relative to others.

You refer to the settlement of a Lay bet, and unfortunately as you know, because Lays are only available on exchanges, Lay prices can only ever be approximations derived from the published back prices.

There is thus no “correct” number, but the formulae proposed (based on empirical evidence) were accepted by everyone entering at the start of the season - although following one nightmare of a weekend when one entrant submitted close to 100 bets, many of them higher priced Lays, I realised that simply adding 0.05 to the back price for these wasn’t adequate, and the rule for these was updated, published and implemented moving forward.

Again, the Profit and Loss numbers are used solely for comparison purposes within the FTL rather than intended to reflect accurately what returns could be expected in the real world.

Indeed, Pinnacle’s prices can often be beaten, and perhaps shouldn’t be used given their exit from the UK market in mid-season, but my opinion is that they are a decent benchmark and the fewer changes that are made once a competition starts, the better.

The settlement rules are not, and never can be, perfect if we are allowing for abstract bets other than Backs to be included. Unfortunately there is no industry standard for recording bets, even for traditional Backs, never-mind artificially derived Lays. However, the demand to allow Lay selections in the competition was apparent, and a simple (if imperfect formula) was proposed and accepted for use in the FTL. The same rules apply to everyone, and are certainly (at least in my opinion), an improvement on earlier seasons, and I’m sure they will continue to be improved upon if the FTL continues in future seasons.

Joseph Buchdahl said...

"Lay prices can only ever be approximations derived from the published back prices. There is thus no “correct” number"

I think there is a correct number. It's the +0.5 Pinnacle handicap. That is backable in the real world.

I just don't see the point in showcasing impossibilities. You don't need to use a special formula, just the +0.5 handicap odds.

Your Bundeslayga also appears to use some sort of formula (the same one?). This is a subscription service. Results for 13/14 are quoted as 4.34% from 96 selections. But applying real world prices (I've assumed a Pinnacle's typical Bundesliga Asian handicap market would be a shade over 1.02 margin) I get a yield of 2.1%.

I just don't see the point of applying artificial formulae when real world odds are available to do the job. You just set yourself up for criticism that you are deliberately trying to inflate your returns (even if that is not what you are doing), which is why I've ended up commenting here.