Tuesday, 18 June 2019

A Tale of Two Podcasts

It was the best of podcasts, it was the worst of podcasts.

Well worth 50 minutes of your time is the Pinnacle Podcast with Rufus Peabody. Rufus focuses on three sports, two of which align with my sports markets of interest, and his comments confirm my belief that profitability is all about exploiting inefficiencies in the betting markets, that the reason these inefficiencies exist is because of biases, and that you need to think creatively and logically as markets sharpen and the number of people who are "good with numbers" continues to climb.

Also interesting to me was that Rufus, like myself, finds the challenge of beating the markets, i.e. the competition, more of an incentive than the money itself. As I wrote more than ten years ago:
I was thinking in the shower this morning, (yes, once a week, whether I need one or not), Betfair really is the ultimate video game. I've never been one for games, (friends at work spend hours playing Call of Duty - why? What's the point?), but in many ways the exchanges are one big on-line game. It's me versus an unknown opponent. My opinion versus yours, except in this game the points are real money.
Or as Warren Buffett describes beating the markets:
"In a sense, the game that I'm in gets more interesting all the time. It's a competitive game, it's a big game, and I enjoy the game a lot"
It's not often that I can compare myself with Warren Buffett.

There's plenty of other content that is worth listening to, if only to understand the level of competition you are up against if you are trying to create a model, and how the markets have changed over the years, although Rufus is a relative youngster!  

He also claims at the end to not be a speaker, and hopes people will make it through the podcast, but for me it was easy. 

This was a very good listen.

On the other hand, not worth 50 seconds of your time, are the same old nonsensical ramblings from Mel "Scientia Trader" who is back spouting his rubbish after the "huge" set back of losing £472.35 in March.

Mel is most definitely not a speaker, but appears to be blissfully unaware of this, offering viewers / listeners a 100 minute mono-tonal lecture, littered throughout with "you knows", or at least the parts I selected at random were, and remarkably absolutely no content of interest. I take my hat off to anyone who can sit through this, and if there is anything of interest, please let me know along with the time. 

One unintentionally amusing moment I did stumble upon is when Mel explains how he had a problem registering with bet brokers who don't accept UK customers, but then suddenly realised he had dual citizenship. Problem solved! 

Amazing stuff. I mean, who among us hasn't suddenly remembered that we have dual citizenship when it comes to betting? While it is true that this is a useful advantage, it's not likely true that its value only dawns on a bettor several years into his betting adventure. As a plot twist, this one is a little bit of a stretch.

I shall leave to the reader to draw their own conclusions as to why the loss of such a small amount, a miniscule draw-down from the profits already (supposedly) reaped, would trigger a ten week disappearance, and the need to "Reflect, Recover and Restart", but to be clear, the idea that anyone can consistently have a win rate of 55% to 60% for an outcome with a probability of .357 (i.e. 2.8 in decimal odds) is complete and utter nonsense.
Some markets might be inefficient, but none are quite that inefficient, or would remain so for long, and as I have written before:
This risk to reward ratio implies an average price of 2.8, i.e. a win probability of 35.7% for his bets, so anyone achieving a 50-60% win rate at that price would clearly, and rapidly, be on the way to a fortune and keeping very quiet about it.
If, by some miracle, Mel really does reside in a world where the laws of probability actually suspend themselves [say Hi to Tony while you're there], the idea that the amount risked should be 1.5% is similarly, literally incredible. 

Using Kelly, the suggested stake with this kind of an edge is over 28%, which should be a clue that something doesn't quite add up! 

Even a more modest quarter-Kelly suggests a stake in excess of 7%, so either Mel is terribly confused about the edge he has or he's clueless about how to make the most from it. 

The evidence suggests that both are true.

I did attempt to listen to a few minutes to see if Mel had learned anything, but once the name of fantasist Adam Heathcote was mentioned as a source of inspiration, it confirmed that thinking logically is still not Mel's strong suit. 

Not a good listen - unless you have trouble sleeping.

"You can't speak butterfly language to a caterpillar." - Unknown   


Doc Sportello said...

Great to see more frequent posts, Cassini. Thanks.

Rufus also has a quite interesting podcast with Jeff Ma - Bet the Process - or at least he used to. Will be sure to give this one a listen.

JA said...

Adam Heathcote. I was part of the production team of Blag a Million!. What I saw, and which you can see if the following video, looked genuine to me. See for yourself: