Saturday, 22 February 2020

The Urgent Zone

No one posts comments on blogs any more, at least not on this one, but I do get comments on twitter and via email so I know that someone is reading.

One recent email from Fadai concluded with this line:
And your blog is the most useful and interesting blog that I've seen (not just in betting)
Mark preceded his question with:
Thank you for providing such an interesting resource.
José is a fan too, writing:
Hey! I'm just reading your blog Green All Over and I find it very interesting.
Tibor said:
I like your blog a lot. Very insightful.
All much appreciated.

However, the most exciting email while I was away was from a TSA agent (strangely based in Qatar) who sent me this exciting news:
How are you today? My name is Mr. David Peter Pekoske from Transportation Security Administration (TSA) agency of the U.S. Department, please I’m very sorry for my late informing you about a package box worth sum of $11.8 million which was abandoned here in my office by one delivering man named Mr. John, please get back to me now, because your package box is free only waiting for your confirmation's just to say yes you are the owner and also reconfirm your full name and address if everything is the same with the information’s we have here then the delivering of your package box will takes place now okay.
Okay indeed! Seems totally legit, and this may well be my last post. Just finalising the details now - apparently I need to send some money first but I'm sure it's just a formality. I checked with @rast8 and he confirmed that I should give it the benefit of the doubt as he had not heard anything negative about this offer.   

The NBA is back after the All-Star Break and the strategy of backing Overs when the total is set high went into the break with a great record. At the start of the season I wrote that:
For anyone else interested, I'll be looking at backing Overs when the line is set as 229 points or higher to start with.
At the All-Star break, this total had a record of 95-66-3, which at 59% is a very good return (ROI: 14.9%). Hopefully the record after the break will continue to be positive.
 
Since 2013, back-to-back-to-back games in the NBA have been very rare, but the NBA announced today that the Lakers v Clippers game postponed at the end of January has now been rescheduled and the Lakers will now play on three consecutive days, all at Home, on the 7th, 8th and 9th of April.

Such sequences didn't used to be so rare, and using the last 112 such series as our guide, the following edges are found.

In the first game, Home teams cover 68% of the time. In the second game, Home teams have just a 39% record ATS, with Unders a solid bet here with a 59% record. And in the third and final game, back the Unders. 

The 2020 MLB season isn't far away with Spring Training in full 'swing' and the earliest ever start date of March 26th a little over four weeks away. The regular season will feature games in Mexico, Puerto Rico, London and the first professional baseball game in Iowa since 1875. Even older readers are unlikely to remember the Keokuk Westerns' disappointing record that year! 

The most impactful rule change from a betting perspective would appear to be that:
A pitcher must face at least three batters, unless the inning ends or the pitcher is injured.
This is an attempt to speed up the game, but is a significant change with managers no longer able to bring in pitchers to just get one out as has always been the case previously. Unfortunately in-play trading has pretty much dried up over the past few seasons, so how useful an edge understanding this rule change will be is probably limited, but rule changes often offer a temporary advantage to the thinking bettor.

The annual newsletter from Warren Buffett was released today, and as always included some interesting and amusingly written anecdotes. One such was this story about Berkshire Hathaway owned Lubrizol:
I must add one final item that underscores the wide scope of Berkshire’s operations. Since 2011, we have owned Lubrizol, an Ohio-based company that produces and markets oil additives throughout the world. On September 26, 2019, a fire originating at a small next-door operation spread to a large French plant owned by Lubrizol.
The result was significant property damage and a major disruption in Lubrizol’s business. Even so, both the company’s property loss and business-interruption loss will be mitigated by substantial insurance recoveries that Lubrizol will receive.
But, as the late Paul Harvey was given to saying in his famed radio broadcasts, “Here’s the rest of the story.” One of the largest insurers of Lubrizol was a company owned by . . . uh, Berkshire.
In Matthew 6:3, the Bible instructs us to “Let not the left hand know what the right hand doeth.” Your chairman has clearly behaved as ordered.
On the topic of focusing on your strengths, we have this:
Here, a pause is due: I’d like you to know that almost all of the directors I have met over the years have been decent, likable and intelligent. They dressed well, made good neighbors and were fine citizens. I’ve enjoyed their company. Among the group are some men and women that I would not have met except for our mutual board service and who have become close friends. 
Nevertheless, many of these good souls are people whom I would never have chosen to handle money or business matters. It simply was not their game. 
They, in turn, would never have asked me for help in removing a tooth, decorating their home or improving their golf swing. Moreover, if I were ever scheduled to appear on Dancing With the Stars, I would immediately seek refuge in the Witness Protection Program. We are all duds at one thing or another. For most of us, the list is long. The important point to recognize is that if you are Bobby Fischer, you must play only chess for money. 
And on the topic of Berkshire Hathaway being prepared for the ultimate demise of Buffett and Charlie Munger, he writes:
Three decades ago, my Midwestern friend, Joe Rosenfield, then in his 80s, received an irritating letter from his local newspaper. In blunt words, the paper asked for biographical data it planned to use in Joe’s obituary. Joe didn’t respond. So? A month later, he got a second letter from the paper, this one labeled “URGENT.”
Charlie and I long ago entered the urgent zone. That’s not exactly great news for us. But Berkshire shareholders need not worry: Your company is 100% prepared for our departure.

Friday, 21 February 2020

Pastafarianism and Snake Oil

One is generally best served in life by maintaining a healthy scepticism towards any outrageous claims that fly in the face of common sense. This is particularly true when the claimant is attempting to relieve the more gullible among us of our money.

The term 'snake oil salesman' originally referred to fraudulent health products or unproven medicine but has come to refer to any product with questionable or unverifiable quality or benefit.

It is essentially deceptive marketing and unfortunately the betting world has more than its fair share of characters engaging in such activities.

A few of these have been mentioned in this blog, including Psychoff, who as I mentioned recently has apparently resurfaced and is now offering a trading course for the not insignificant sum of £1,999 for up to 10 people.

As might be expected, views on the merits of this opportunity vary, with some like myself finding it extremely unlikely that such a course could be worth anything close to that amount, to those such as @rast8 who think there is a possibility the course might be worth every penny. 
Now to be clear, of course I concede that there is a possibility this course is indeed worth £1,999. Unfortunately, based on the evidence we have, this possibility is extremely small.

There's a possibility that the Flying Spaghetti Monster exists but the onus is not on me to prove that it doesn't actually exist.

The onus is on those making the outrageous claim (FSM / course is worth £1,999) to provide the extraordinary evidence that makes their case.

I have seen no such evidence from Psychoff, @rast8, or indeed anyone, justifying such a rich price tag.

Let's start with what we do know, which is that it was claimed 10 years ago that Dr Guven was having some success trading low-level Eastern European football games in-play. Given that the liquidity in such games is likely rather low, and the number of market participants similarly low, this is certainly feasible. I used to trade in some pretty thin markets myself, and there was money to be made but at the price of giving up hours of your life. Fortunately for me, this coincided with a time when I was working all hours of the night and could combine trading with my regular work!

If this strategy in these markets is still profitable, and I suspect such markets are not as lucrative now as maybe they once were, why would Dr Guven be willing to sell it to anyone?

As soon as there are 10 more people trading these games, his share of the pie essentially disappears. Not only that, but the 10 new entrants would find their opportunities also pretty much non-existent too, and it would be hard to justify their course fee.

If the strategy is no longer profitable, clearly the sale of such a course is an attempt to rip-off others. 
@rast8 suggested (above) that maybe Psychoff is tired of trading, and is switching to teaching his course as an easier way of making money, but in my experience:
If you're tired of trading, why not just take a few weeks off or cut down on the time you are trading and see how you feel after a break? When I used to occasionally work overtime it was great at first, the extra money was worth it, but after a time it would get old, but I didn't then quit my job. I eased back, took a holiday.

Does it really make sense to sell the golden goose just because you're currently bored or tired?

In the unlikely event that Psychoff has truly uncovered an edge in trading liquid football markets, this would be such a valuable edge that it would not make any sense to share it, and certainly not for a mere £20k. Such an edge may well be worth £20k to one person, but by sharing it among 10 others, it becomes valueless. I think we can safely eliminate this possibility anyway. Shouting from the rooftops that you have an edge would be strange behaviour from someone, especially a Doctor, who really did have such an edge. In my experience, there's often an inverse correlation between the amount someone talks about their success and the actual degree of their success.

And again, in Dr Guven's own words, he uses will-power to achieve success, although curiously this wasn't enough to overcome his weight problem. 

This is a big hint that things are not quite as claimed. We've had traders reviewed in this blog who claim fantastic success, posting pictures of themselves on vacation, interested in brand new cars and yet who dress like a homeless person and live in rented accommodation or famously, in a caravan in their mother's front garden. Look at the evidence available before reaching a decision, and in the meantime, err on the side of caution.

Caveat emptor. If you are going to throw away £1,999 on this course, at least weigh up the evidence rationally. What return are you seriously expecting on that money? As I've said before:
You can put 50 people in a room and teach them how to trade. But you can't teach them how to be a trader. It's a personal journey and one of self discovery.

Thursday, 20 February 2020

Market Inefficiencies and Psychoff Offers A Slice for a Price

In response to a tweet posted by Hank Tate showing the results from a few 2020 bets on Road / Unders compared to Home / Overs, @stingerpicks wrote that:

This should come as no surprise to readers of this blog either, with most bettors overrating home sides and betting on what they want which is lots of scoring. 

What this means is that if you are absolutely clueless, you should look at Away / Road teams and the Unders as a good place to start if you want to lose your money slowly. If you are clueless, you should also read this blog from the start. It'll take you a while, but you'll be informed by the end. 

Many systems I play use the 'Road' angle for this reason. 

Looking at the Unders in every sport covered by Killer Sports, the database all-time results illustrate this inefficiency. In every one of the eight sports, Unders has won the coin toss of Over / Under:
The numbers are similar for Road teams, with the exception of MLB where backing the Home team would have resulted in a smaller loss than backing the Road team, although this has has evened out over the past five seasons.

These observations only mean that this is a good place to start looking for inefficiencies. It is not suggested that anyone blindly start backing all Road teams and every Unders as you need a 51.23% strike rate to beat the vig when betting into -105 lines, and only three sports would have given you that on the Unders and only in the CFL would blindly backing Road teams have been profitable. 

The other two forms of American Football (NFL and NCAAF) have also been profitable for Road teams and Unders since 2014 though, with readers well aware of the benefit of backing Unders in NFL Divisional games with another profit last season, albeit not the biggest!
As discussed in this blog before, home advantage in many sports is disappearing with technology leveling the playing field and leagues making travel schedules less onerous than they once were.

In other NFL news, and related to rich people doing dumb things as touched on yesterday, the Cleveland Browns Offensive Tackle Greg Robinson, who has made $29 million playing football over the past seven seasons, was just arrested trying to enter the US with 157 pounds of marijuana in his car and now faces up to 20 years in prison.

Moving on and I liked the below tweet, in more ways than one, which while it relates to financial traders rather than sports traders, the point remains the same. 
Sports betting / trading is not easy, and with no barrier to entry, the competition is stiff. It's a fun hobby but don't kid yourself you can make a decent living at it. 

I'm reading that our old friend Psychoff (aka Dr. Guven) is back and generously offering a trading class at just £1,999 for up to 10 people. You will have seen my tweets on this topic if you follow me on Twitter, but if you are pondering this, save your money. You are not going to learn any secret winning formula, as no one with an edge that has supposedly made him seven figures would be stupid enough to give it away so cheaply. What you will probably get is a lot of common knowledge albeit it with some nice folders and materials about trading, but the problem with this is that:
You can put 50 people in a room and teach them how to trade. But you can't teach them how to be a trader. It's a personal journey and one of self discovery.
Remember, this is the man who claims to be a physician who would:
use my willpower to get what I want week after week
Try using willpower in trading and see how that works for you. Results are comparable to those of prayer I've found. 

He also claimed to be interested in psychology and self-improvement and yet admitted to having a weight problem.

Something doesn't seem quite right, and although some of the comments on the referenced post above predicted a coming sales pitch, the post is now over 10 years old, so it's taken a while!

The final comment was interesting, from someone claiming to know the good Doctor from a forum. He offered some insight into the methods:
FYI, Betfair is illegal in Turkey and nobody can manage to use it.
He is located in Sweden, he got 7 different dishes to scan all the live football broadcasts all around the Europe + a Dreambox receiver to decode the encrypted channels.
As I am living in Hungary and I can watch the local games, I can honestly tell you that when you can follow the low leagues + eastern European games, even if the liquidity is low, there are couple of hundreds to make per game since nobody is Tevez, Rooney, Drogba , Henry or Messi to change the destiny of the game in 3 seconds...
The reason why he does not give any ideas about his methods is quite simple, there is a certain amount of sweet pie to eat, why would he create competitors?
So after the trading class, there will be at least 11 people watching low liquidity Eastern European games fighting each other for a slice of the rather small pie? Or perhaps the pie has gone or else why create the competition? Proceed with caution.

Meanwhile, the value of my Tesla stock has now almost tripled, with another crazy day yesterday. 
   

Wednesday, 19 February 2020

The $10m Cheque Was Not Honoured

Yesterday, I mentioned Matchbook's suspension by the Gambling Commission, but the good news based on my son's experience, is that funds can indeed by withdrawn currently with no issues or delays.

As to what led led up to the suspension, and who knows how long it might last, it appears that basically Matchbook extended generous lines of credit to some wealthy, but not very sharp gamblers. 

Being an exchange, the money these whales proceeded to lose in what appears to me almost record time, was won by others, but the credit was never fully repaid by the losers, leaving Matchbook to cover the losses themselves.

All very incompetent and reckless of course, if not illegal, and the best detailed explanation of the facts comes from Ireland's Independent and this article from the very Irishly named John Mulligan. Interestingly the article was published more than two weeks ago on January 30th, a while before the suspension. Here it is in full:
A gambling firm formerly operated by employees of Cork-based betting technology business Xanadu Consultancy has secured a judgment totalling $12.6m (€11.4m) in London against a number of defendants who laid bets of as much as $1m a day and engaged in what a judge described as a "co-ordinated deception".
The case shines a unique light behind the scenes of the world of global high-stakes betting.
The Channel Islands firm, Eurasia Sports, was part of online betting group Matchbook.
Xanadu Consultancy - which had no part in the deception - helped to procure high-rolling gamblers, including the defendants in the case, through Eurasia for Matchbook.
Xanadu is owned by an Isle of Man firm whose directors include the Cork company's CEO Mark Brosnan, as well as former Ryanair CEO and ex-RTÉ finance boss Conor Hayes.
Wealthy individuals were targeted directly by Eurasia to facilitate enormous wagers that could not typically be made via the Matchbook website.
"In essence, the service offered provided a brokerage product, working via Skype or over the telephone, which enabled large clients to bet considerable amounts quickly," noted the judge hearing the case.
All of the defendants in the case are businessmen who the court said were well-known in Peru or internationally, and all were known to each other.
One of the defendants, Lan-Chin Tsai, also known as Martin Tsai, was a "compulsive gambler", the court heard.
On September 2, 2014, Paul McGuinness of Xanadu, and Andrew Pantling, a director of a firm called Triplebet which trades as Matchbook, visited one of the defendants, Juan Omar Machi Aguad, at the Atlantic City Casino in Lima, which Mr Aguad owned.
Mr Aguad was keen to place bets of up to $500,000 on American football games that were held under the NFL in the US.
Eurasia was prepared to offer Mr Aguad $1m in credit without any security, given his reputation and what Mr Pantling said was the competition amongst betting firms for high-stake gamblers.

A day after the meeting, after due diligence paperwork was completed, Mr Aguad was given the $1m credit.
By the next day - the first day of the NFL season - he had lost it all after failed bets on matches. Further credit was advanced, and by September 7, Mr Aguad owed Eurasia $1.5m.
Mr Aguad offered a transfer of $500,000 to Eurasia via a business associate, if an account could be set up for that associate.
It was, but Mr Aguad also bet via that account and lost $500,000 on it. Days later, his associate transferred $500,000 to Eurasia.
Less than two weeks later, Mr Aguad said he would transfer $375,000 to Eurasia in part settlement of his account. He asked Mr McGuinness for more credit in that amount, which was allocated. The same day, Mr Aguad bet and lost all that $375,000.
In 2014, another of the defendants, Jose Roberto de Romana Letts, was to be appointed by Eurasia as an agent in Peru to introduce South American gamblers to the firm. In October 2014, he suggested that he provide security for the bets placed by the proposed new customers.
He said that because he had been involved in a tax investigation, he would provide the security via a $10m cheque.
On the basis of that cheque, further client accounts were opened, which also later benefited from credit from Eurasia, but which ultimately owed large sums to Eurasia after failed bets.
The $10m cheque was not honoured.
None of the defendants was represented in court for the case.
"I am in no doubt that this is a case involving well-informed and sophisticated defendants, most of whom have at some stage been legally represented and all of whom have been served with the claim form, the claimant's evidence and the trial notices in such a way as to have made them aware of the case being brought against them and the date of this trial," said the judge in the case.
"In my judgment the overwhelming probability is that the defendants' absence from the trial is due to a strategic decision on their part not to attend," he added.
It makes you wonder how some of these people ever accumulated such wealth. 

For me, Matchbook lost all credibility when they introduced a Premium Charge after smugly claiming that "they would never have to apply additional charges as some of our competition has chosen to do". 
Roll forward to 2018 and this news...  
Presumably neither of these thresholds applied to the targeted wealthy individuals, which is another issue altogether, but for us mere mortals, the lifetime limit is useless.

As I quoted Mark Iverson in the 2018 post on this topic:
It's all about the dream. Without that nobody starts.

Tuesday, 18 February 2020

Bettor Fans, Better Profits

I'm back, rested and recharged after a few weeks in South Africa with my son which was a great trip. The only negative was the rental car window being smashed in on day two of the trip during the nightly load-shedding (rolling blackouts) and my jacket being stolen, but other than that it was a wonderful experience to see a new country. I suspect I'll be back again fairly soon as my wife now wants to go and experience some of the highlights from the trip.


As for the cricket, we saw the ODI in Cape Town on 4th February which England lost, and the second ODI in Durban which was abandoned after a few overs of play. The efficiency of the ground crew left a lot to be desired, but it was quite entertaining watching the covers come off and go back on several times. They earned their money that day.

We also got to see some Super Rugby, and some not so super Rugby on TV with England looking very poor in their opening games of the Six Nations. 

After Durban we flew to Port Elizabeth to drive the Garden Route back to Cape Town stopping at Bloukrans Bridge on the way for my son to enjoy the world's highest bridge bungee jump at 709'. I was hoping to use my age as an excuse, but the oldest jumper there was aged 96 and as old as I am, I am nowhere near that impressive number! 
When I left, Tesla was trading at $564.82 which I was already excited about, but when I arrived back it was at over $800, and has just opened in New York close to 6% higher today, so the trip was more than paid for, and South Africa is a cheap country to visit. I hope some of you joined me on this stock when I wrote about it in the low $300s in 2018.

What did I miss in the betting world? Well I've missed a few bets of course, and the Superbowl, but a small price to pay for some life experiences. I also see that Matchbook have been suspended by the UK Gambling Commission. Not something that impacts me as their Premium Charge lifetime limit of $20k and 60% rate made this platform a non-starter, but my son has requested his funds be withdrawn and is a little nervous. The claim that they are a peer-to-peer betting exchange designed for smart bettors who want more value is hardly supported by their practices! It would appear that some of their decision making regarding extending lines of credit to compulsive gamblers has been anything but smart.

Back to the NFL, and for the Small Road 'Dogs it was another profitable season, with an ROI of 13.9%. 12 of the last 14 seasons have been profitable following this simple strategy. In Divisional games, the ROI was 9.3% with 10 of the last 14 seasons profitable.

I'm also noticing that bigger road 'dogs (>8) have been profitable for two consecutive seasons, something that last happened in 2005 and 2006, an area that night be worth monitoring, especially in the NFC. 

In the NBA my trip overlapped the All-Star break, but the Road Favourites system moved to 20-11-1 on the season (an ROI of 25.1%) while the Overs at 229 or higher has continued to generate profits and now sits at 95-66-3 for the season (ROI 14.9%).

I also missed the NHL's All-Star break, but the NHL System continues to have an ROI north of 20%, something that is not unusual for this system since the re-alignment in the league in 2013. 
The current win streak after last night's win by the Florida Panthers is now at seven. In my opinion, relative to the big three US sports (NFL, NBA, MLB) the NHL is somewhat overlooked and clearly the markets are less efficient. 

At least one study found in the NHL "that most bettors act more like fans than investors" which is exactly what seekers of market inefficiencies want. Exploit these while you still can.

Friday, 24 January 2020

NFL, Rest and Heading South

Hopefully some of you ignored the 'Andy Reid and Unders' advice out there last week, and followed me on the Overs this past weekend in the NFL Championship games:

Overs do have a 20-13-1 advantage
Some of you may have seen the trend that since Andy Reid has been the head coach of the Chiefs, Unders is 37-19-4 in home games. While this is true, in playoff games this record is an insignificant 3-2.
So the Kansas City Chiefs will play the San Francisco 49ers in the Superbowl, and I shall be in Cape Town that weekend so you're on your own looking for an edge in this one, and good luck finding one with the game one on the most analysed in all of sports. 

If the market does have an inefficiency it would appear to be that the favourite is over-rated, (6-12 ATS in Superbowls since 2001) which makes sense given the public and 'square' money coming in to add an interest to the game. 

In games where the line is greater than a field goal, the 'dog is 10-2, but unfortunately the line looks like it'll be close to 1.5 with the Chiefs favourites.

I'd have expected Overs to be 'over'-backed also, but 'over'all these are 9-9 over the small sample size. However when the line is relatively small, i.e. fewer than 4.5 points, Overs has a 7-3 record. 

And that will be it for the NFL 2019 season, one that flew by and was again profitable for followers of the Small Road 'Dog System. I'll try to remember to do a summary when I return from South Africa in mid-February.

This will be my last post until then. 

I don't have time to go deep into the topic right now, but I have seen some recent comments about the importance of 'rest' in some sports, but in my opinion the impact of this is pretty well understood and factored in. 

I've written on this topic before, and where someone might want to focus their attention is where the rest might not be as straightforward as simply looking at the number of days since the last game. 

For example, a night game that went into double overtime followed by a day game on the road in a different time zone still counts as zero rest, same as the opponent who is at home following a blowout day game in which the starters were rested for much of the second half. Surely few would agree that the "rest" parameter for both teams is really the same, and it can be useful to consider these details.

Something to think about, but I have a plane to catch for my first, and long overdue, visit to the southern hemisphere and some cricket matches.

I shall return.    

Tuesday, 14 January 2020

Tesla and Totals

Last week, I cautioned against blindly backing the the Overs in NFL Divisional Playoff games and in the end they split 2-2. 

As for the apparent value for Overs, I'd be wary. We're dealing with a small sample again, and while Overs has a 37-31 record overall, most of that advantage is in games where the line is 12 or higher, and none of this weekend's four games are close to that.
When the total is 48 or higher, the Overs is now 17-9 with the one qualifier (Kansas City Chiefs v Houston Texans) easily covering by 31 points. The win was secured by half-time, and the Chiefs made the 51 points on their own.  

Road Teams in this round getting 7 points or more tend to have an edge, but that didn't work out this weekend with just one winner form the three bets. With a 24 point lead at the end of the first quarter, the Houston Texans were looking good but the Chiefs came back strongly. 

The totals are currently set at 45 for the Chiefs v Tennessee Titans and 52 for the San Francisco 49ers v Green Bay Packers. 

So onto the Championship Round next week and there's half the data we have for the previous two weekends, i.e. not a lot. Road Teams are 16-18 while Overs do have a 20-13-1 advantage

Some of you may have seen the trend that since Andy Reid has been the head coach of the Chiefs, Unders is 37-19-4 in home games. While this is true, in playoff games this record is an insignificant 3-2.  

Neanderthal's blog has an interesting post on the subject of backing the Under in the NBA, something this blog looked at less than a week ago. His numbers are worth comparing with what I have found, and for those of you interested in the College version of the game, there's a little secret given away.

Some of you may recall my recommendation of Tesla shares from back in 2018, when they were trading in the low 300s, and while I doubt that anyone would have followed me on it, nor should you without doing your own research, the stock is certainly flying high right now:
Less than a month ago, Tesla were in the low 400s

As the short-sellers get driven out by forced covering and interest costs, the price could go even higher. A one day gain of close to 10% helped the spreadsheet last night, but didn't do much to support the "efficient market" hypothesis.

With parallels to betting markets, Warren Buffett's succinct observations on this topic (EMH) are appropriate:
Observing correctly that the market was frequently efficient, they [academics, many investment professionals and corporate managers] went on to conclude incorrectly that it was always efficient. The difference between these propositions is night and day.

Friday, 10 January 2020

Kyle Lowry - 9.1.15

There was a 'trend' highlighted on Twitter yesterday, which was that, and I kid you not:

Since Jan 9, 2015, in games where the Toronto Raptors are favourite, coming off a loss when they were favourite, and when more than half of Kyle Lowry's made field goals were 3 pointers.
The 'trend' was that of the 17 games since that memorable January day of 2015 (no, me neither), the Unders had a 16-0-1 record.

As often happens with these 'trends', the act of publishing it is all that is needed to doom it, and the game last night (Raptors @ Charlotte Hornets) went comfortably Over.

The thing is, such 'trends' are merely curiosities, the result of some presumably time-consuming data mining. 

Maybe these things are interesting to some, but as indicators of where a market offers value, they are dangerously useless.

Of course nothing happened in Kyle Lowry's life on January 9, 2015 whereby the relationship between his two and three point baskets suddenly took on a mystical importance.

Look at enough combinations of data and of course you will find examples like these, but if there is no rationale behind them, they are worthless. Not to mention that checking a database daily for five years and having just 17 selections probably isn't the best use of your time. 

No one on the planet is looking to back Overs "in games where the Toronto Raptors are favourite, coming off a loss when they were favourite, and when more than half of Kyle Lowry's made field goals were 3 pointers" and thus pushing the value to Unders.

There's another one tonight if anyone is interested:
Since December 2019, a road team that is off a win in which they were not winning at the end of the third quarter and they allowed fewer than 28 points in the fourth. It is 20-0 ATS and it is active tonight!
This one is actually slightly interesting because it's based on a solid idea - that there might be some carryover when a team finishes strongly and wins. 

However, I'd expect the value to be on the side of opposing these teams, since recency is such a strong bias. I'm not interested in the number of points that the opposition scored in that final quarter, nor do I believe that the night of November 30th was momentous. That's just fluff to make the 'trend' look more glamorous. 

So as I do, I took a look at teams who came from trailing after three quarters to winning the game and here's what I found going back to the 1995 season in regular and playoff games:
Over the last one and a half seasons, backing road favourites in this position (regular season) has a 31-21 (59.6%) record.

Wednesday, 8 January 2020

Going Under In The NBA

I've spent a little more time looking at the free football data and while I was focused on Pinnacle's numbers, it seems rude to ignore those of Bet365. 

Having done so, I can see why I pretty much ignore other books. Based on 3306 matches where we have data from Bet365 and Pinnacle for both the Money Line and the Under / Over 2.5 Goal markets, the average over-round (Money Line) for Pinnacle is 102.4% compared with Bet365's average of 106.7% while for the Over / Under market the numbers are 102.8% and 105.8% respectively.

If you were stupid enough to back the Home, Draw, Away, Under and Over in every game, I hope you'd have at least saved yourself 622.43 units by betting with Pinnacle!

Backing the Draw at the better of the two prices in every match would have resulted in just about breaking even, though not quite, with a loss of 29.49 units, or slightly less than 1%. 

As with financial investing, the impact of commission or fees on your transactions should never be an after-thought. The impact of higher fees on actively managed funds over time has been covered in this blog previously, and one big reason why investing in low fee index tracking funds is my preference, but the same logic applies to betting, with the added complication that the "best" prices might not always be an option for you, in which case you have to go with the best prices available to you.

Polish NBA fan Wojciech Malinowski tweeted:

I'm not sure if Pinnacle operate in Poland or whether Betfair allow bets from there, and if so at what rate of commission, but for sure, overcoming a 12% tax would be quite a challenge to say the least.

Ben sent me this suggestion a few days ago, and rather rudely I don't think I ever said thank you as I was away at the time, but hopefully he will accept a late thank you here and not mind me sharing this personal recommendation more widely:
Have you looked into using a betting brokerage platform like Sportmarket to place your wagers (avoiding the Betfair premium charges)?
I’ve been using the company for a bit over a year now and have withdrawn with ease each time.
I regularly beat the Betfair starting price (inclusive of commission), simply due to the availability of multiple asian books.
Personally I have no experience of this platform, but Ben is a quality individual and I have no reason not to trust his opinion here.

Regarding the second part of Wojciech's comment on the NBA Unders, and the challenge right now is that finding Unders is a little like trying to find a stock to short in a soaring bull market.

They are out there, but a rising tide lifts all boats as the expression goes, so caution is needed. As a refresher for any new readers out there, point totals in the NBA have increased quite dramatically since the 2012-13 season. It's been covered in this blog for some time, but here is an interesting article from this season with tables to show the changes:
The 2012-13 season, or seven years ago, is when the league truly started exploiting the math and realizing they could reallocate some of the hardest field goals to convert into jump-shots with a greater reward (three-pointers).
Sports and consequently sports markets do evolve, even if it is impossible to prove to the satisfaction of a statistician, but then:
Arguing with a statistician is a lot like wrestling with a pig. After a few hours you begin to realise the pig likes it.
To find early signs of changes, it is important to keep tracking key metrics in games. 
If you see the average number of possessions changing, the likely effect is a corresponding change in point totals. 

If you see the number of three-point shots being taken is increasing, likewise. 

Are all teams changing their tactics the same way though? 

Fortunately (from an investing perspective) not. Three point attempts this season range from 44.3 per game (Houston Rockets) to 27.4 (San Antonio Spurs), while possessions per game range 104.4 (Milwaukee Bucks) to 97.1 (Charlotte Hornets).

Not coincidentally, the Houston Rockets lead the league in points followed by the Milwaukee Bucks, while the Charlotte Hornets languish in 28th place (out of 30 teams).

I'm getting slightly away from the original question, but the point I'm trying to make is that any evolution isn't likely to be taking place at the same pace across the league, and with teams playing in conferences, changes may be somewhat localised. 

So, is there value to be found backing Unders when the total is set low? The bias that is in play here is that if the total is set low, instinctively less-informed punters will see value on the Over.

What is a 'low' total? Because this sport is changing so fast at the moment, there is no mean total, so I start with looking back three seasons and the 211.2 number. 

Unders when the total is set below 211 over the two and and a bit seasons since hit at 56.3%. This increases to 57.2% in games between Western Conference teams, I suspect because the West is known for being higher scoring.
Probably the most active bias in sports betting is that of recency and in games between teams where both are coming off an Under, the win percentage goes up to 59.5%.

I'm not sure I like the name 'Anti-Beast' for a system though. 'Teddy Bear' perhaps, but the answer to the question is yes, value is there on lower point totals. At least for now. 

Tuesday, 7 January 2020

EPL Draw - Over Consideration

The NFL play-offs get underway today with the Wild Card games where historically the value is on Unders. Only twice in the last fifteen seasons has Overs 'won' more than two of the four games, the last time being the 2011 season. Of the other thirteen, three were split for an overall 40-27-1 record.
I hope a few of you were able to make some money on the Wild Card games this weekend, with all four matches going Under, the bet recommended above. 

This is the second sweep on Unders since 2012, and after the league reörganised in 2002, the Under is now 44-27-1. Tuck that thought away for this time next year. I also pointed out that:
Road 'Dogs are generally under-rated at this stage also, with a 28-22-2 record ATS, and in the last two season are 7-0-1.
Not perfect on this one, (Buffalo Bills missed out on making it so by 1/2 a point) but I'll take two out of three winners any day, and overall this bet is now 30-23-2 over the same period. The Seattle Seahawks were road favourites, but the record on such teams was an inconclusive 7-6-2 and as an Eagles fan, it would have been tough to back against them anyway.

Onto the Divisional Round next week where the value play tends to be the Overs, with Road teams continuing to do well ATS. Regarding the value on Road teams, I suspect that the bias at play here is that the Home team is rested in these games after a bye week, and expectations for them to do well are set unrealistically high.

Home teams do win the game 69% of the time, but ATS they are just 30-37-1. Road teams from the Eastern Time Zone have a 23-11 record, but for the first time ever (well, since 2001), there is not an Eastern Time Zone team on the road.

As for the apparent value for Overs, I'd be wary. We're dealing with a small sample again, and while Overs has a 37-31 record overall, most of that advantage is in games where the line is 12 or higher, and none of this weekend's four games are close to that.

I took a look at the data A Lucky A Day linked me too for the EPL Draw, and it has Money Line data going back to the 2007-8 season, 4695 matches and if you had backed the Draw in each one, you'd have an ROI of -3.9%.  

Ignoring the matches where there is no Pinnacle price for the O/U 2.5 market (and remember, these prices are all opening prices, so this exercise is out of curiosity rather than to 'prove' anything) we have 3311 matches, and if you had backed the Draw in all of these, your ROI would have been -1.39%

You really have to work quite hard to lose money backing the Draw, because by simply ignoring matches where the Draw is priced at 4.0 or higher, you are into profit, albeit by just 0.04%, but of course, readers will know there are other ways to eliminate losers, namely ignore games where one side is odds-on.

Now the ROI is 5.7%, with profits of 85.16 units from 1497 matches which might get your attention, although not that of everyone if this comment from the Betfair Forum is to be taken seriously (hint: it isn't):
i devised a system returning about 20% roi which is decent but not worth the time and effort that's involved
Good grief. Some people are clueless, this individual in more ways than one, but that's a good thing when using an Exchange!

Now it gets interesting. There are 229 matches where the Under and Over prices were both odds-on. Avoiding backing the Draw in these matches and you'd have boosted your return to 9.4%.

Which leaves 935 matches where Unders opened as the clear favourite, and 333 where Overs was clear favourite.

Now it gets very interesting. One might expect the "Under Clear Fav" row to generate more profit, but as you can see from the table below, this is not the case. 70% of the profits are coming from 26% of the matches. 

Pareto anyone?
Not only do these matches generate a higher percentage of Draws, but the average Draw price is also higher. 

While the percentages of matches resulting in 0:0 and 1:1 are close whether Under of Over is favoured, (and both above the long-term averages for these scores - top row below), the number of Draws of 2:2 and higher is greatly increased when goals are expected. 
It's important to remember that this data set uses the opening Pinnacle prices on the Under / Over market, prices which may well change significantly in the days prior to kick-off, and that the sub-set of matches already excludes games where one team is odds-on or the Draw is 4.0 or greater.

In these games, which in the EPL are already known to be profitable when backing the Draw, using the Under price isn't helpful. While still profitable, they are actually bringing down the ROI.

These are interesting numbers to keep an eye on as the data for Pinnacle's Closing prices from Joseph's site accumulate.

With only half a season of closing U/O data from Pinnacle, the loss is currently 11.32 units from 37 matches.
I mentioned the cost of the closing price data in my last post, which should make you appreciate the access to Joseph's free data all the more. If anyone has this data and wants to check the observations above, I'm sure many Draw lovers would be very interested in the findings. 

Sunday, 5 January 2020

Change Is Constant, Mean Not So Much

"The only constant in life is change" - Heraclitus
By some distance, although admittedly with no competition, yesterday's post is already the most popular of the year, prompting comments in abundance on Twitter.

Mel (Scientia Trader) does indeed appear to have vanished from the face of the earth, with Dionysios confirming that:
Indeed, hopefully the latter. Unfortunately for Mel, the laws of probability do not suspend themselves just because you want them to, and the claim of a 50% to 60% strike rate being sustainable at a price of 3.8 (implied probability 0.26) was always quite ludicrous. Hopefully he is alive and well, and gainfully employed and didn't lose anything more than his pride. Of course, it is always possible that his huge edge was genuine, and that he is now retired and living on a private island somewhere. Nah. 

A Lucky A Day sent me some links to data for the Draw and Under prices, with the free version being the less useful (but nevertheless interesting) opening prices from both bet365 and Pinnacle. There's about 210,000 rows of data so I may be gone a while!

The closing prices come at rather a high cost, and I'm not sure senior management here, still seething after seeing my 2019 alcohol expenses, will be approving it.
In addition to being very helpful, Mr Lucky did comment that:
Personally I do think draws get overlooked and inefficiencies could last a long time!
Agreed, and the Draw has served me well over the years with thanks due to Derek McGovern for planting the seed in my brain back in 1999.

They also served many readers well when I shared the XX Draw selections for three seasons in the last decade:

Not a huge return for the effort, but For comparison, backing the Draw blindly in every game in those leagues for the three seasons would have lost you 5.8%

In some ways it's a shame I had to discontinue the spreadsheet, as it was based on the idea of expected goals before xG was even a term, but as I've mentioned before, it took several hours a week to make all the updates and a promotion at work meant that was no longer a viable proposition. For most of us, time is a precious commodity and as the cost of spending hours watching a sport in-play waiting for an entry point, so there is a cost to spending several hours a week updating the numbers for ~100 clubs.

Graeme Dand back in 2014 had this to say on the Draw:
I really buy into the idea that few punters back draws and they are more interested in backing a team to win (same idea as why no one backs 0-0 when watching a game as they want to see goals!)
Another expert who saw the potential for value in the Draw (and Under for that matter) was Daily25, who had this to say back in 2012:
I love the "in the right circumstances" qualifier, (aren't all bets profitable "in the right circumstances?") but a quick look at the free data would suggest the Under / Draw relationship I mentioned yesterday might have some merit. 

The Premier League data isn't quite current, with the latest matches from early December, but they go back to the 2010-11 season which is a fair way.

Stripping out the matches where one club is odds-on or the Draw is priced at 4.0 or greater, backing the Draw in matches where the Under is odds-on produce the following results:
I may need to change the wording from "odds-on" to "favourite" but more to come on this, and thank you to A Lucky A Day for the pointer.

Then there was this comment from Joseph, a little passive-aggressive in tone perhaps, but Joseph is more into the theory side of betting than the practical side, so I'll assume positive intent:
The problem with talking about a regression to the mean when it comes to sports and betting, or at least my technical analysis based form of betting, is that there is no specific and invariable mean, because both the sports themselves, and their related betting markets are constantly changing. 

In sports for example, from 1888-1892, the average number of goals per game in the top flight of English football was 4,37, and the percentage of matches ending in a Draw was 14.5%. Is this the mean to which the number of goals is expected to return to?

As mentioned many times previously, sports change over time. Rules are updated and scoring becomes easier or harder. Look at the impact of the 1925 changes to the offside rule in football. Points for events are changed (e.g. Rugby and NFL). Strategies change, e.g, the higher scoring seen in the NBA since 2012. Divisions, conferences and schedules are rearranged. The list is long.

The net effect of this is that data from one season often cannot be usefully compared with another season and the idea of numbers regressing to a mean is nonsense. Values are not constants.

Similarly with the betting markets that accompany these sports. For one example, one need only look at the football markets from Joseph's own website from 2000-01 where the over-round (William Hill) averaged 112.54%. This season the average (Pinnacle) is 102.77%, which marks a huge difference and you can't simply compare the results of a strategy without recognising this difference.

Markets also have to change because the underlying events change. I've written before that if you are able to foresee how a change in the sport might impact results, you should make hay while the sun shines because at some point the market will catch up to you. It has to, and only a fool would think that it won't. 

Of course winning strategies should eventually go "tits up" as Joseph puts it, and there should be no need to "save face" when this happens, unless you are claiming your golden goose will live for ever, and yes, there are probably gullible fools out there who would believe that line. 

As Alfred Lord Tennyson put it so eloquently:
'Tis better to have loved and lost than never to have loved at all.
Assuming you didn't lose all your profits of course.

That some biases appear to be so strong that systems like the Small Road 'Dogs have had more winners than losers in effectively a coin-toss for 19 seasons and counting is the real puzzle:

All my strategies, and those of anyone, should have a limited shelf-life. The key is to identify current market inefficiencies, use them to your advantage until the market catches up and it is no longer profitable, and move on to the next idea.
 

Remember that the ideas offered on this blog are all based on technical analysis and are all offered for free, although donation to the retirement fund are always gratefully received. 

The main idea for this blog is to show the process required to identify market inefficiencies rather than offer selections themselves. I hope it also shows that making a profit from betting is also possible with the right approach.

Mean regression might be meaningful (pun intended) if you are measuring the performance of a tipster who is using fundamental analysis to identify selections, but for a technical system where the market is always changing, it is not. 

The idea that markets evolve shouldn't be news to anyone who is actively betting. I don't believe Joseph actually bets on a regular basis, and thus may not be aware of these changes, but as others on various forums have pointed out over the years, successful strategies can stop working literally overnight. 

You're basically buying a property on top of an eroding cliff. At some point, your house is going to fall into the sea, but you should be able to enjoy the view for a while before that happens.

Build up your bank while you have the edge, move a stop-loss up as your profits increase, and stop betting when (not if) your stop-loss gets hit. The idea that one should wait until the system has been 'proven' over 10,000 events, possibly going back years when the markets were quite different, is frankly nonsense. We're not testing a coin-toss or a roulette system - we're playing in constantly changing markets. 

The idea that betting markets evolve shouldn't be a surprise - the financial markets do too, and a punter, like an investor, needs to stay flexible:
The important thing to remember is that there is not a set rule you can apply. You must factor in what is going on in the world. For example, if the economy is in trouble, corporate earnings can be worse than expected. This lowers investor expectations, and stock prices will go down. Even if the market seems fairly valued at a P/E ratio of 14, bad times could cause the market returns to continue on a downward spiral with the P/E ratio going much lower.
On the other hand, during booming economies, corporate earnings can continue to rise, and stock prices can continue to rise for many years in a row. A P/E ratio of 16, or even 20, does not automatically mean the market is overpriced. In the early ’90s, many thought the market was overvalued based on P/E ratios, and thus they missed years of great returns from 1994 to 1999.
The point is that the betting landscape is constantly in a state of flux. New players with new ideas and sometimes sophisticated analytical tools, come in to the markets, sportsbooks with revolutionary business models appear or disappear: 
When Pinnacle began trading in 1998, most gaming companies used bonuses to lure potential customers. Rather than offer sign up or reload bonuses, Pinnacle became the first sportsbook to introduce a reduced margin pricing model or reduced juice, thus deriving profit from lower margins but a far higher turnover. Pinnacle began offering -105/-104 ($1.95-$1.96) prices on head-to-head match odds and spreads, significantly undercutting the standard -110 ($1.91) pricing model that was used by its competitors.
These changes are why the challenge of betting profitably is so much fun. 

What happens when NBA teams play faster and increase the number of possessions per game? There are more points scored. Do the 'traditional' sportsbooks sit and wait for mean regression? No, of course not. There is no 'mean'. There are 'means' over certain periods of time, but they are generally pretty meaningless (sorry, did it again). 

Finally, Mark had this to say on the topic of bookie restrictions:
Hopefully by mentioning him, his interest will continue for at least another day or two, but my point on this topic was really that anyone with the ability to become a long-term winner at betting is unlikely to be someone who would be surprised at having their business declined. Or as I put it last year:
Are you suggesting that someone with the skill to win at betting long-term is someone who would be unaware that they might not be able to extract money from a business indefinitely? This seems highly unlikely to me.
Anyone starting out today on Betfair is certainly well aware that in the unlikely event they are successful to the extent of the lifetime limit, there will be a Premium Charge applied on future profits. The complaint from the relatively few customers impacted at the time, (in reality, far more people were complaining than were, or would ever be, affected by the charges) was that the lifetime limit was being retroactively applied, and if you were already there or almost there, it was unavoidable, whereas if you were just starting out, it was fairly easily avoidable.

But life goes on, for me it's only a hobby, and we adapt.

Hopefully a few of you were with me on the Unders last night in the NFL Wild Card games. With two winners already, the worst case scenario for the weekend is a small loss after commission, but while my 'official' results will record the wins at 1.952, the actual bets were made at 2.08 (Tennessee Titans @ New England Patriots) and 2.02 (Buffalo Bills @ Houston Texans) so it will be a profitable weekend no matter what. Fly Eagles Fly.