Saturday, 5 September 2015

Cheap Money

The term "free money" is eye-catching, but like much in advertising or marketing, it is often not exactly true. Fellow blogger Peter Webb has a post with this title today looking at the short prices on international (mis)matches. While internationals are generally not of any interest to me from a betting perspective for a number of reasons, Peter's words on 'shorties' were interesting, mirroring my own observations on them in the top leagues.

Using Pinnacle's prices for the three season 2012-15, backing every selection at 1.05 or shorter has a 100% winning record. Mind you, the competitive nature of league football means that there was only one qualifier in those three seasons (Barcelona v Celta de Vigo, 26 March 2014) so we need to lengthen our search.

Looking at those selections with an implied probability of 75% or greater,  sub 1.34 in decimal odds terms, there were 516 candidates, of which 437 won for a 17.539 point profit (ROI  3.4%).

Peter writes:
So the curious thing is, that there is probably value at that end of the market, but why won’t anybody take it?
  • The first thing to note is that nobody will recommend it. If you do and it gets turned over, people will remind for the rest of your life. Therefore it’s safer to ignore it or pass it off.
  • Second, there appears to be little satisfaction at grabbing value at short odds. Land a 60-1 and you are a god, pinch some cash at 1.04 and you are a moron.
  • The third element is staking. If your staking is inconsistent then the one loss could kill a whole bunch of positive results. Human nature will rear it’s head again and the ‘sods law’ fallacy will prevent you from pressing the button if you use a larger stake or a progressive staking process.
So I suspect value gaps like this will probably always exists, because human nature will always get in the way and stop people from exploiting it; even if there is (effectively) free money on the table.
While many ill-informed punters are of the opinion that backing odds-on selections is a losing strategy, the truth is to the contrary. Value can exist at any price, including 60.0 and 1.04, and an ROI of 3.4% over 516 bets is a great result. When you consider that Pinnacle's prices can usually be beaten (although whether higher prices are available to you is another thing altogether) this simple strategy is, in practice, even more profitable.

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