NBA - No Basketball Action

I make a point of not stressing about things I have no control over, and when the NBA owners and players settle their dispute and start playing again is one such issue. There was an AP article which covered most of the bases - excuse the mixed sports metaphor - but in my opinion missed one important section of the community who will also be suffering collateral damage with the lockout. The full, original, article is here, but I have added a new section, a massive improvement in my humble opinion.

In the grounds of his palatial stately home in the English countryside, I spoke to world renowned NBA trader Cassini about the lack of basketball.

"It's rough," Cassini said, glancing toward his monitor. "It's painful when it's out of my control."

Last week, the NBA cancelled its pre-season, and on Monday, Commissioner David Stern wiped out the first two weeks of the regular season as his millionaire players and even wealthier owners failed to agree on how to split revenue and cap salaries.

Sure, players are temporarily out of work and will have to find ways to maintain their skills. But Kobe Bryant has the luxury of potentially signing with an Italian team to do that, earning a big salary until the labor unrest settles.

Others aren't as fortunate. The loss of one game, let alone 10 or maybe all 82, will have a devastating impact on workers with jobs dependent on pro basketball's six-month-plus season. A few teams have already trimmed their staffs and more layoffs could be forthcoming if the discussions drag on. Then there are those who don't work directly for an NBA team but who still depend on the excitement the league brings to town.

Ushers, security personnel, parking lot attendants, concession workers, restaurant employees and sports traders all stand to have their hours cut or join the country's 14 million unemployed.

"I do feel that the players and owners are being incredibly selfish" said Cassini, as he lay by the pool sipping on a glass of the finest champagne and nibbling on black caviar and truffles.

"Basketball is my top sport for trading" he added, before revealing that his hope for a place in the Sunday Times Rich List 2012 was now in some doubt. Back in 2004, Latrell Sprewell famously turned down a 3 year, $21 million contract extension saying that he "had a family to feed", and Cassini can certainly identify.

"Already, I have been forced to make cuts. My full-time household staff is down to just Mrs. Cassini, and we have had to cut out the daily Duck Foie Gras lobes that we loved so much. The maid, pool boy and chauffeur have all had their hours cut, and this really is a tough time." When it is suggested that other needed cuts might be the hedges and grass, Cassini admits the gardener is on "gardening leave".

When pressed as to how much the stoppage will actually cost him, Cassini is coy. "It's so vulgar talking about money, but let's just say that the XX Draw selections had better keep winning, or it'll be Margate next summer, not Necker Island."

Adjust Meant For Trading

A great example tonight about the opportunities the NFL throws up almost every week. The Indianapolis Colts are a poor team this season. They have a great quarterback in Peyton Manning, but he is out injured, and without him, they have struggled this season losing all four games. Kansas City Chiefs are not much better, winning just one of four games. The visiting Chiefs were slight pre-game favourites, and everything pointed to a close game. Late first half, and it was all Colts - up 17-0 and later 24-7, and my lay of the Colts wasn't looking that great.

Momentum is key though, and the Kansas City Chiefs scored a touchdown late in the half after a drive where the Colts looked their usual hapless selves, and receiving the ball first in the second half, I wasn't as down about my position as I might have been. It is noticeable how the two halves in an NFL game can be complete opposites - one team dominates early in the game, the other team makes adjustments and returns the favour in the second half. As is often the case, I was proved right in my assessment, as the Chiefs dominated the second half and ran out relatively comfortable 28-24 winners, and I was just a little annoyed that I started backing the Colts back too soon and ended up with less of a profit than I should have. At least there was no panic tonight. In the past, I would have likely evened up and gone red-all-over at half-time, but the value was in opposing the Chiefs even more, but I was in deep enough already for my comfort level on this one.

Seventeen point comebacks seem to be almost the norm this season. When people are backing as low as 1.05 with more than half the game to go, there is a massive upside to opposing them.

Swinging Low

No football today, and idle hands make light work for the devil it is said, and sure enough, I placed a fun bet on England to beat France in the Rugby World Cup, despite my knowing better. It will reduce the Premium Charge next week anyway, and rather than being fun, actually made England's elimination even more painful.

At least the International break allowed me to get the numbers up to date, and send out the XX Draw selections well ahead of time. Peter Nordsted's Drawmaster dipped into the lower leagues today and came up blank. I'm not sure why Peter does this. Are there value draw selections in the lower leagues only on International breaks? I think we can safely say that the answer is no, so the question then becomes why would one not include these lower league bets on other weekends too? And why stop at three? Value doesn't stop at three. On any one day, it may stop at zero, or it may stop at 99 (unlikely though). My XX Draw selections might be none one week, 12 the next, although six seems to be the most it comes up with from the 49 matches each round.

I've also been playing with the spreadsheet. One of the problems with the three outcomes is whether it is better to back a value selection, albeit at longer odds, or lay the opponent and get the draw on your side. Initially I decided to back selections up to 3.0, but if the price exceeded this, to lay the opponent. The result at the break was as follows:

If I adjust that parameter to a mere 2.0 (i.e. evens), the situation changes to:

While the really important part is the bottom line, and the ROI increasing, I also like the improved strike rate across the board.

Liverpool have somewhat surprisingly moved ahead of Manchester City into second place in the EPL ratings, albeit by a single point. The top eight are actually the same as they were at the start of the season, except for Chelsea who have have dropped from 2nd to 4th. At the bottom, it's Swansea City, Blackburn Rovers and Sunderland who take up the relegation spots.

Crapshoot

The two best regular season teams in each Conference, the league best Philadelphia Phillies and the New York Yankees were both eliminated in the crap-shoot best-of-five Divisional Series in the last couple of days. The Phillies won 102 regular season games, yet lost to Wild Card St Louis Cardinals (90 wins), who came from 10.5 games back in late August to pip the Atlanta Braves to the Wild Card. Opposing the favourites in a short series can be a lucrative strategy. I think I'm right in saying that only twice in the last 15 seasons has the team with the best regular season record gone on to win the World Series. If I find time to confirm this during the International lull, I will, but even of I'm off by one or two, it's still a winning strategy.

Mind Being Relaxed Under Pressure?

I have written before, and one day I should really get around to some kind of an index for this blog, about the problems created when you 'need' to make profits from betting rather than 'want' to. There is a saying that scared money never wins. Bet with money you can afford to lose. Trading is an emotional activity, and being in the right place mentally is crucial.

I am reminded of this by Center Court Trading's latest post Emotional Pressure - worth reading in full, but some highlights are:

The pressure, stress and anxiety involved with full-time trading is immense, especially when things are not going well. Some of the mistakes I've made recently as a full-timer, I would almost certainly have not made as a part-timer. Why? Because there wasn't the same amount of pressure to make money or to protect what I have. You can always reload your bank if it gets blown when you are part-time but if it's your only source of income, that bank is all you have.

The anxiety of needing money can cause you to lose patience and can make you start trying different ways to make cash, such as betting on other sports, changing strategy or forcing opportunities that don't exist. People will say 'Lower your stakes' or 'Take a break' but it's not so easy to do that if it means you might struggle to make enough to survive on.

Not the recipe for success in my opinion. Play the markets part-time with money you can afford to lose. Stake sensibly, and you are more likely to make smart decisions, for example letting the winning trade run rather than locking in the profit simply because you can.

The Two Rooneys

In December last year, I wrote this exclusive in-depth post about Motherwell's midfielder Steve Jennings, and commented on the coincidence that the large(ish) bet mentioned was placed in Liverpool, Jennings' home city.

Little did I know at the time, but it turns out that bet was placed by a certain Wayne Rooney, although the Sr. Rooney and not his more famous son Lil Wayne - "everybody dies but not everybody lives" - seriously, who knew this blog author was so cool?

Anyway, I'm not even sure they are actually father and son. I mean, you'd never guess from their looks, although they are handsome devils the two of them.

So Jennings faces up to 10 years in jail, while Rooney Sr. stood to win all of £5,000 on his bet at 10/1. And what else might the Rooneys have been up to? Did he really get caught on his first transgression?

Cathal Kelly wrote

If this was a conspiracy, it was one of shockingly small ambition. A return of 5,000 pounds is paltry when one compares it to the speculative value of Rooney Jr.’s reputation, which can’t help but be tarnished as a result.

I'm not sure Wayne Rooney's reputation can be tarnished too much more (the name Patricia Tierney ring a bell?), but stories like this won't help speed up his redemption.

A World Cup win in 2014 would help though.

Playoff Lottery

The baseball post-season matches have shown improved liquidity as I mentioned previously, which makes for opportunities. Experience, confirmed by a quick check in The Book - Playing The Percentages In Baseball - told me that the St Louis Cardinals, down by two in the middle of the first to the Philadelphia Phillies, were a value bet at close to 4.0. Pre-game they were slight outsiders, at 2.12, but with 27 outs to play with, and at home, it seemed too good to be true. Cardinals came back to win 5-3.

There's another consideration in the first round of the playoffs, which is that these series are short - Best of 5, not best of 7. In many ways, the Wild Card qualifier, in this case the Cardinals, almost has an advantage in that while their opponents have coasted into the post-season, the Wild Card team has effectively been played playoff baseball for the past few weeks. In a short series, the regular season best team can struggle to find top gear again. Perhaps a similar situation to the Football League Playoffs where the top placed play-off team in the Championship has won only 7 promotions in 25 seasons.

Not that American sports would understand the concept of promotion of course.

Graham Dilley (1959-2011)

When I read of the death of someone a similar age to myself, it's always a reminder that I'm not getting any younger. Graham Dilley, the former Kent, Worcestershire and England bowler, died today, reportedly from liver cancer, at the age of 52.

The father of Worcester Warriors' captain Chris Pennell, Dilley is possibly best remembered for his Test Match debut in 1979 when he bowled to Australian Dennis Lillee who was caught by Peter Willey resulting in the classic scorecard entry of:

"Lillee c Willey b Dilley"

I used to think that 52 was a good innings. Not so much any more. Another reminder that our wins and losses on the exchanges are not quite as important as we sometimes imagine.

Back The Lay The Draw Pick

Draws seemed to be hard to find this weekend, unless you follow Ian Erskine's Lay The Draw picks, as his two FTS games today were Helsingborgs v Norrkoping Current (4.7) and Marseille v Brest (4.7) - both finished 1-1! For those of us actually trying to find draws, not so good. The XX Draws went 0 for 3, with the best effort being Juventus v AC Milan which was a draw at the 87' before Juventus hit two late goals. A 73' goal cost us the Hamburg v Schalke '04 draw, and a 9' penalty broke the draw at Swansea City v Stoke City, which finished 2-0. Peter Nordsted's Drawmaster picks also went 0 for 3, as Wolverhampton Wanderers v Newcastle United finished 1-2, and Tottenham Hotspur beat Arsenal by the same. Pete also had Swansea City v Stoke. Griff's two selections were a little off the mark this week as Bolton v Chelsea finished 1-5 and Fulham v QPR ended 6-0. His long-term results were good, so I hope to be able to bring you the selections for a couple of week's time.

Back to the Tottenham v Arsenal game for a moment, and The Sultan over at Centre Court Trading wrote a very honest, and slightly disturbing, post analysing his emotions, or lack of, as he went chasing after a tennis loss. He put his entire bank, a phrase I find a little too dramatic since banks can always be reloaded, but anyway, he put some money on the North London derby having at least 2 goals. He won the bet, and actually had a good value bet in my opinion (the markets had the Overs priced at good value), but what is disturbing is how easy it apparently was for him to risk an amount that was meaningful to him, on a random bet with no consideration of value or stake size. Bad beats happen, but one has to have the discipline to stay in control at such times. It appears that our friend made the losing bet that led to the 'losing of the plot' while tired. If you feel tired, stop. There's always another day.

As we go into the latest International break, it'll be a good opportunity to take stock of the "Value" bets, which overall are -0.19 points on the season after 467 bets. Great for churning, but now I have invested so much time into them, a profit would be even greater.

The EPL is the worst league, with the Match Odds bets down 13 points in big part down to the strong form of the big three, Manchester's City and United, and Chelsea. I know that the week I stop laying these teams, they will all slip up. There is more promise on the Over / Under selections, which although down on the season by 1.72 points, have been winners over the last three rounds. 19 bets from those 30 matches, and 16 winners. That's the good news. The bad news is that the three rounds prior to that were almost the complete opposite with 18 bets from 30 matches and 15 losers! The optimist in me says that the later results show that the form and ratings are settling down. The pessimist says I have no edge and the results are just random.

Le Ligue has issues of its own. A process that finds not a single Under bet value since September 11th. needs help. At least both the Match Odds and Over / Under selections are in profit, but I'll take advantage of the quiet week to research why my goal expectancy is consistently higher than the market's...

...Unlike the Bundesliga, where the opposite is the case. Not since August 27th has the spreadsheet found value on a single Over bet. Again, this league does show a slight profit on both bets, but confidence in them isn't exactly high. The stats I use appear to need a 'league specific' component. This post from Soccer By The Numbers provides some food for thought.

Spain and Italy both have a healthy mix of Under and Over value bets, as well as No Bets, and Serie A is the star of the show right now, with the top two in terms of ROI being the Match Odds and the Over / Under bets from that league.

Anyway, plenty to work on. If betting on football was easy, everyone would be making money from it.

One final comment on these selections - the best value home bet of the weekend was Hannover '96 who were available at 2.86 yet rated by my spreadsheet at 1.88. Football Elite's one recommended bet of the weekend? You guessed it - Hannover '96 - who beat Werder Bremen 3-2. Matt selected them based in part on his opinion "Bremen's good start to the season and current position of 2nd in the table may be slightly false". I don't use league tables at all in my predictions. It is all about ratings, form and performance, and takes into consideration the strength of the opposition, so rather than have an opinion that a team's position may be false, I have a good reason to believe it so.

NFL today, and the St Louis Rams v Washington Redskins today was expected to be one of the more evenly matched games of the day. The Rams were getting 1.5 points, a price that traded pre-game at evens, and the Redskins were therefore slight pre-game favourites on the Match Odds market at ~1.7. The Redskins scored first for a one touchdown lead, and with over three quarters of the game to go, the price dropped to 1.1 - not for a huge amount admittedly, but to profit in three figures while risking 10% of that was to my mind, huge value. I've said it before, and I'll no doubt say it again - some of these relatively illiquid markets throw up some huge value bets if you are patient. In the end, the visiting Redskins prevailed, but dwelling on that rather misses the point that the value was clearly in laying. Another game from the early NFL schedule saw the Detroit Lions come back from a 0-17 and 3-24 deficit at the Dallas Cowboys, who traded at 1.01. Unfortunately one can't cover every game, and with nine matches in-play, there's an element of luck needed to be in the right place at the right time.

A problem that has largely gone from the baseball, now that the post-season games are here. Liquidity is up, and the strategy of laying the leader had a good day on Saturday night as home teams Texas Rangers and Philadelphia Phillies both came back after giving up early leads. I much prefer laying a visiting team in these games, in part because to be the home team in games one and two, the team has proven to be the better of the two over the regular season, but just the emotional factor of playing at home is important. Once a rally begins, and you see this in most team sports, that home support makes a difference.

Paths To Prosperity

After the worst personal financial quarter overall in money terms, if not percentage wise, the importance of thinking long-term was the topic of this interesting finance article from the pages of Yahoo! While trading the stock market isn't quite like trading sports markets, it's similar in that one is looking to time their entry and exit points rather than hang in for 'the long haul' (which in sports market terms is not that long really). It's also another reminder that the sports trading field is a lot fairer to outsiders than the stock market is. There is always someone who knows more about a share or option price than you do.

Just as I was considering another attempt at hastening my journey to wealth via some form of speculation on stocks, a wise old sage came along and told me not to.

"The game is rigged," says Jack Bogle, the octogenarian founder of The Vanguard Group. "It is too convoluted. It is too complex. You shouldn't be playing the game. You don't need to play the game."

With his paternal loyalty intact, the man who created the first index fund 35 years ago is unbending in his belief that speculators lose, and owning the broader market for the long haul is the best path to wealth appreciation. Not surprisingly, the enormous popularity and diversity of offerings within the fast growing universe of exchange traded funds or ETFs, has failed to convert him.

"The index investor doesn't need to be touched by any of the lunacy that is going on in the ETF market,"says Bogle. "The ETF industry, which has got to be the greatest marketing idea of this age, is not the greatest investment idea of this age, I can assure you."

It's not so much products with triple leverage that irk him about ETFs, it's more the velocity that they represent. Bogle abhors the notion of trading and timing, and the long odds that go with it. He insists no one is smart enough to do that for the long haul.

"If you own the stock market for a lifetime, you get those returns. Playing games in the stock market, over every day of that time, is playing the stock market. The stock market game is rigged, the business of investing is not rigged," says Bogle.

His reasoning is simple. The use of capital by companies to "develop new products, efficiencies, innovations, productivity, the improvement of consumer goods and services at lower and lower prices" is all very real and ultimately validated through earnings. It's a proven process that delivers long-term growth that mirrors the pace of economic growth, plus a pinch of dividends to round up the results.

The problem is that investors want more than 6 or 7 percent gains and they want it fast. Unfortunately it's been a wild ride over the past 11 years. We've made great highs and painful lows, until to finally landing at the same place we started from, a.k.a. "the lost decade."

It's the eternal rift that marks the difference between investing and trading. The intended outcomes are the same, but the paths to prosperity are wildly different.

Quality, Not Quantity

LayThatDraw wrote:

Hi mate, This may be a slightly odd question, but how many markets do you trade/bet on during an average month? You always read as betting advice that as punters one of our biggest advantages over a bookie is that we can choose when to bet or not to bet; just interesting to see how many bets you make. Thanks, great blog.

There’s no simple answer to that question, as it really depends on the time of year, and also the level of my interest in markets varies considerably. For trading at this time of year, I tend to focus on the NFL, perhaps 3 or 4 games a week, and I'll be checking to see if the in-play liquidity for the baseball improves now that the post-season is here. (Looking at the first game, it appears to have). For punting, it’s football, and while my ‘serious’ bets are usually less than 10 a week, I may have 40 plus bets a week for small stakes – games where I think there is value, but my level of confidence in them is low due to the newness of the selection process, and the fact that 40+ is clearly too many. The goal of the Value bets is ultimately to identify a handful of bets each week rather than 40 or so.

My lifetime markets total on Betfair is over 15,000, in 7.5 years. 2,000 a year. 5.5 a day!

The reminder that for punters, one of our biggest advantages over a bookie is that we can choose when to bet is an important, but I suspect oft forgotten, one. Bet only when you have value, in other words. If you find yourself betting on Japanese football in the middle of the night out of sheer boredom, you might want to ponder where your edge is.

Only 72 votes in the poll so far, but the majority of readers are currently either the eldest or an only child.

An interesting piece at fulltimebetting on the topic of bookie bonus offers and the 'spirit' in which they are offered from an insider's perspective.

Thanks All Over

Olympique Marseille v Borussia Dortmund - Draw at 3.45 - Over 2.5 is slight value at 2.34.

Valencia v Chelsea - Match Odds prices are almost exactly the same as mine. Over 2.5 is value at 2.2.

Thanks to all those who have shown interest in the XX Draw selections. I have put together a five page sales pitch, I mean 'prospectus', for your reading pleasure, and thanks to those who very generously used the Donate button - at least now I know it works! Seriously, it is appreciated, as is the comment from Mark who wrote:

What is a key element to facilitating long term profit, is touched upon with the FACT that .05-.1 are big ticks and an element of patience can become your biggest ally in beating the odds. Again though, if an edge is to be gotten through self creation, long live the impatient. The blog continues to deliver quality post after post Cassini.

Thanks also to Spad who informed me that the FTS Forum is indeed available to me.

Griff posted his EPL draw picks for this week, and they are Bolton v Chelsea and Fulham v QPR. Chelsea have a game to play, so I can't enter their rating in yet, but Fulham v QPR appears to be a "No Bet" for me. I have Fulham at 2.14 so slight value on the lay, but not enough to qualify as a value selection. Having drawn five games in a row, I can see the appeal of Fulham drawing another one, especially as it is a local derby.

Top Drawer

I was wondering why my hit count had dramatically increased lately (1400+ hits over the last two days) and in part, it was because of my recent post called Make Or Take aka "Can't Be Arsed", which appears to have been linked to on the FTS forum, frequented by a number of "Lay The Draw" aficionados. Despite being only two days old, the post is already in my top ten all-time. Unfortunately I can't read the comments over there as I am not a member, but it would be interesting to know what the general feeling was about my post. I can be a little provocative at times - just ask my sisters!

In contrast to the XX Draw selections, the Value selections had a poor weekend, dropping 13.78 points from 69 bets. La Liga was the worst of the leagues with more than half the points being lost here, (I'm beginning to hate La Liga) while Serie A was the best, up a miserly 1.04 points. There are clearly a few wrinkles still to work out with these selections, for a start 69 bets is far too many, and for the third round in a row, not a single Under 2.5 goals selection was found in France, while in Germany, when value is found, which is less often than France, it is currently always on the Under 2.5 goals. I'm also suspecting that the system may work better in the more competitive leagues rather than in La Liga and the EPL where the top two and top three teams respectively are almost certain before the season starts. France right now has five teams within two points of the lead and Italy, albeit after only four rounds, currently has no less than eight teams within one point of the lead! The Paris St Germain experiment could turn Le Ligue into a similarly boring one, but Olympique Lyonnais have been punching above their weight for a while, so perhaps not.

Six European games between rated teams this week, with the first games tonight. I see little value in the Bayern Munich v Manchester City match, with my prices close to the market's, although Under 2.5 goals is value at 2.16 versus my 1.88. Napoli (v Villareal) are a value lay at 1.75 (I have them at 2.0) and again, Unders is slight value at 1.85 (my odds are 1.69). As usual with these European games, there is little data to go on, so don't be putting your mortgage on any of them.

Now back to draws, and Griff stopped by to say:

Just wanted to give you a update on my own draw system. It's just based on the EPL so far this season: Strike rate 56.25% ROI 97.31%, and the back test over the past 3 seaons including also this season so far: Total matches 301, Strike Rate 36.88%, ROI: 31.37%.

Not too shabby. From January, when I first started recording the prices for these selections, the numbers for me are currently:

Since tracking the results of these selections, and assuming an average price based on the numbers for each league since 2011 (rounding down, but close enough for these purposes) my numbers are:

An ROI of 31.7% after 300+ matches is quite remarkable. I have a couple of questions: 1) Are all your selections from the EPL? 2) What was your longest losing sequence? 3) Are your returns to level stakes? 4) What prices are you using?

Sadly, the idea that people would be happy to donate after a weekend of winning selections is apparently a non-starter, as I suspected it might be. Worth a try, but I think that if people aren't delighted enough after a weekend of four winning draws from five selections, (with only a 90th minute goal coming in the way of a 500-1 accumulator), to make a donation, then the idea is clearly doomed. If anyone wishes to receive these on a subscription basis, and I am told there are a few of you out there, please send me an e-mail: calciocassini @ aol.com It'll likely be a while before we do as well again as this past weekend though!

Birth Order

There was an interesting article on Yahoo’s Finance pages yesterday, about how birth order affects you, although I have no idea what ‘noogies’ are. For the record I am a first-born, with two younger sisters (although in the past few years, I have started to lie about my age and deduct 10 years, meaning that I am now the last born). My choice of career still fits, as according to the article, first-borns, last-borns and even only children all tend towards information technology and my newly acquired last-born status would explain my enjoyment of writing. Fortunately, my change did not affect my IQ, which remains significantly higher than that of both my sisters - combined.

The article did get me thinking about how many traders are first-born, last-born, only children etc., so another poll appears. Feel free to participate.

How Birth Order Can Affect Your Job, Salary

It's just not fair: Middle children are in a bad spot

Not only did your big brother steal your Halloween candy throughout childhood, but as an adult he probably makes more money than you, too, say recently released survey findings.

As if years of retribution-free noogies weren't sweet enough, it turns out that first-born kids are the most likely to earn six figures and hold a top executive position among workers with siblings, according to findings from jobs website CareerBuilder.com.

Meanwhile, middle kids are the most likely to report holding an entry-level spot and earning less than $35,000, while siblings born last are the most likely to work in middle management.

"The first-born child is usually in a leadership role in the household and it continues into their career," said Michael Erwin, senior career adviser at CareerBuilder.com. "The middle child tends to be more of the peacekeeper. The last born is more of the free spirit."

The CareerBuilder.com survey was conducted online between May 18 and June 8 among 5,708 full-time workers. Results also indicate that only children are more likely to earn six figures and to be a top executive, while workers with siblings are more likely to have job satisfaction.

"You know how to work better with a team because you've had siblings. An only child is used to doing things on their own," Erwin said.

According to the CareerBuilder.com survey, depending on order of birth, individuals tend to be in certain types of work. Those who are born first usually go into the fields of government, information technology, engineering and science. Middle children often go into law enforcement, firefighting, construction, education, and personal care. Those born last frequently go into art/design/architecture, editing/writing, information technology and sales.

Only children tend toward information technology, engineering, nursing and law enforcement.

Life Is Unfair

Firstborns, before their siblings arrive, benefit from more parental investment, such as time spent talking.

"When a sibling comes along, one has a rival for that attention and one is going to experience an intellectual environment that is being diluted," said Frank Sulloway, an adjunct professor in the psychology department at the University of California, Berkeley.

Research indicates that earlier-born men and women have higher educational attainment and higher earnings. On average, the IQs of firstborns are about three points higher than second-borns, based on data for men, according to Sandra Black, an economics professor at the University of Texas, Austin. Just a few IQ points can have an outsized impact.

"These are relatively modest differences, but that's sometimes the difference between getting into Harvard or some other school, and who gets a better job. It's totally unfair, but that's the way it is," Sulloway said.

Small differences among different siblings can also mean that there are a disproportionate number of firstborns in challenging fields such as medicine and law, he said.

When it comes to annual earnings for men, firstborns earn about 1.2% more than second children, and about 2.8% more than third children, according to Black. For women, firstborns earn about 4.2% more than second-borns, and about 6.6% more than third-borns.

For earnings, much of the difference due to birth order is explained by differences in educational attainment, Black said.

"Birth order affects educational attainment, which then affects earnings," Black said. "Later-borns earn less than firstborns, and a substantial part of this different is due to the fact that later-borns get fewer years of education."

However, not all is doom and gloom for those who aren't the first-born child.

"Earnings are determined by a lot of different factors. So later-borns should not give up," Black said.

Birth Order and Personality

Birth order is not decisive when it comes to an individual's life achievements, but personality is shaped by experiences, and individuals have different experiences due to birth order, said Ben Dattner, a NY-based organizational psychologist.

"First-born siblings have an incentive to adapt to the family environment they were born into. There's a niche in the family for the first-born sibling to be a culture carrier — an open slot for the position of good-family citizen," Dattner said. "Second-born children are born into a family in which somebody has already occupied the position of good student, good kid, carrier of a parent's values."

Younger siblings will try to find their own niche — an area that firstborns don't already excel in, Sulloway said.

"To be different, younger siblings will often try to find their own domain, something they are particularly good at, something that is different from an older sibling's area of expertise," Sulloway said.

Later-born children tend to be more interested in foreign cultures and travel, and may be more likely to take risks, experts said.

"First-born siblings are less likely to move far away from their parents because they have adapted into their family's culture. But there are exceptions to every rule," Dattner said.

Who winds up drawing the shortest stick? It's the middle kid who tends to get less attention than either firstborns or younger siblings.

"Firstborns tend to receive more attention because they arrive first and receive 100% of parental attention until another sibling arrives. In addition, firstborns are older than their other siblings, generally assume a leadership role, and often serve as surrogate parents, assisting parents with child-rearing tasks, for which they derive certain rewards," Sulloway said. "Lastborns tend to receive an undue share of parental attention because they are the most vulnerable sibling, and hence the most in need of continuing parental investment and care."

Simple Minds

The XX Draws are back in form, winning 4 of 5 this weekend, except that of course, 'form' has nothing to do with it. Randomness contain no patterns, though to less sophisticated investors than readers of this blog, random events may sometimes appear to have a pattern to them. 

At an average price of close to 3.5, a strike rate of 37% is pleasing. We have no control over whether the winners come in bunches or evenly spaced, but it shouldn't matter so long as they keep coming.

Peter Nordsted's Drawmaster picks had a great weekend too, finding two winners from three EPL matches, helped by a 90'+ own goal at Queens Park Rangers today. One could do a lot worse than combine these draw selections.

I came across this example of a (not so) sharp mind on the Betfair forum today. A customer for at least two years, he posted:

I just want your insight on something that looks quite attractive to me in terms of betting over the long-term. What are your views on the following?

If I start with an initial bet of USD 100 and place ONLY one single bet (mostly live) at the odds of 1.10 today and bet with the winnings of USD 110 tomorrow and so on and so forth DAILY, choosing a SINGLE BET at the same odds of 1.10, over 80 days, should all of them win, it will win around USD 200,000.

Does that look too far-fetched?

I know that the key here is DISCIPLINE as well as LUCK!

But what’s the probability of the 1.10 odds not winning, barring the recent shocking performances by Real and Barca?

And yes, I’m not confining myself to football only. The bets can be placed on tennis, basketball, baseball etc.

Views as well as feedback from past experience most welcome!

An amazing idea, and the only surprise is that no one has thought of this before. I loved the line "But what’s the probability of the 1.10 odds not winning barring...". This basic misunderstanding of probability from Betfair users who have clearly not learned much during their apprenticeship is a great example for why we should be putting poor value bets out there! Somehow, our friend believes that his bets at 1.1 will defy the odds and never lose. Barring the recent shocking performances by Real and Barca, which of course, can never happen again.

Make Or Take

The "Lay The Draw", aka "The Cash Generator" system continues to come to the fore every few weeks. I'm all for it. The more people laying the draw, the better the prices available for those who prefer to back that outcome. "Lay The Draw" doesn't work of course, although I shouldn't say that. Proponents state that although there are fundamental flaws with the system, if you pick the correct matches, it's a winning system. Except that you can't "pick the correct matches", and that flawed logic applies to any system. 

Goalless matches can't be predicted, or why not simply lay the 0-0? Other problems - the web site goes down. The outsider scores first and the draw price doesn't move out before the favourite equalises. Or the equaliser is scored immediately after the 'bet winning' goal leaving you back where you started, but it's fun to read. I think it is so popular because it sounds so simple, and anyone can get lucky in the short term with it.

Hard to believe that people still pay money for this system though, but anyway, while reading another thread on the subject on the Betfair forum, someone posted this line

I would be willing to bet that at least 90 percent of people on Betfair just take whatever's up there, they can't be arsed to wait for a bet to be matched.

It raises a key point, because whether you are a maker or a taker of prices can make a big difference to the bottom line, especially when it comes to the draw where a tick isn't .01 but at least .05 (end of season Italian games excepted of course). Getting 3.45 rather than 3.4 or 4.1 rather than 4 is huge, and if you can put your bets up early enough, more often than not they will get matched by people "who can't be arsed to wait". 

Those ticks add up. It also pays to be a maker in illiquid markets. There may be a gap of several ticks between the back and the lay sides, but of yours is the best available, it will often get matched. If true value is in the middle of the spread, you are in good shape if you are able to get matched on the right side. My single biggest win came after I entered a lay bet of several thousand at a poor (in my opinion) 1.03 and was somewhat astonished to see it all taken in one bet. Would that money have come in as an ask at 1.03? It's possible, but somehow I doubt it. Someone saw the money there, greed kicked in, and they took the plunge. It's often easier to make your own edge than it is to take an edge.

And taking that logic a step further, feel free to try out the new Donate button. It was suggested to me that if people are willing to pay for selections, but I'm not totally comfortable with that idea, at least for now, that people may be happy to donate after, for example, winning on some XX Draw selections. I'm not convinced, but it'll be an interesting experiment.

Late Drama

The 90' goal put in two appearances today in my XX Draw selections, in Mainz and later in Valenciennes. A key match which came up on three radars, Mainz v Borussia Dortmund was a Recommended Bet from Football Elite - with the DNB (Draw No Bet) - and this match came up on the radar as an XX Draw selection, while the Value System also suggested a lay of Borussia Dortmund. Typical then, that Dortmund scored a 90' winner, and all three systems showed a loss on that game.

There was better news from Bavaria, where newly promoted Augsburg held Hannover '96 to a draw, (we finally had an XX Draw winner from outside of England and France), and then the late game between Valenciennes and Olympique Marseille where the home side trailed until the 92' before equalising. Some go for you, some against you, but two winners from three today, and indeed four from the last seven, have improved the ROI to 16.21%. Perhaps I should just stick to France, where the ROI is 120.6%!

Overall, respectable enough, but Pete Nordsted's Drawmaster had two picks today, Wigan Athletic v Tottenham Hotspur (1-2) and Stoke City v Manchester United (1-1) with the latter win lifting his ROI to an even more impressive 37.5%.

Updates on the value bets once the weekend is complete.

Decline And Fall

This article from This Is Money.co.uk reveals that the number of active customers on Betfair is down 19 per cent to 381,000. It's not clear [to me anyway] when this decline is measured from, or what the definition of 'active customers' is, or over what period that 381,000 is measured over (I suspect a quarter), but if it is prior to the introduction of the PC3 [latest Premium Charge], then there is surely worse news to come.

The news that Betfair founder and chairman Edward Wray could be the next senior manager to leave the embattled online gambling firm, will be met with raised eyebrows among investors.

The FTSE 250 business, which allows gamblers to bet against each other rather than against a traditional bookmaker, is already looking for a new chief executive after David Yu said in June he would move on when a successor is found.

But at yesterday’s annual meeting Wray, a former JP Morgan trader who co-founded the business ten years ago, said the firm had ‘started the search for a deputy chairman. The intention is for this person to take over from me as chairman at an appropriate time in the future’. This follows a spate of other senior executives who have also left the business in recent months.

And while all this has gone on investors have seen Betfair’s stock almost halve since it floated last October at £13, with a value of £1.3billion. Betfair yesterday closed down 60p at 723p, valuing it at £839million. The business has faced a number of disappointments and delays as it has tried to push its services into a host of European countries, such as Germany, Denmark, Italy and Spain.

And in August the UK government revealed online gaming companies based offshore would need a domestic licence to take bets from British customers. Betfair moved its headquarters to Gibraltar in March to save around £20million a year.

These constraints on growth are beginning to affect the business, at the start of this month the firm turned in first-quarter core sales down 7pc to £80.8million, with the number of active customers down 19 per cent to 381,000.

For Betfair the wider economic climate is tough, and the regulatory issues it faces are protracted. Investors will want to see a settled management quickly in place, who can then set about getting the share price moving in the right direction again.

It doesn't help that the site continues to have problems. As Peter Webb writes:

Of course you also have Betdaq that you can trade on. The liquidity on Betdaq is higher than ever at the moment and strategies that I use on one exchange tend to transplant well to the other. So whether you use Betdaq to hedge or trade outright its more viable than ever nowadays.

Guardian Articles

The Guardian had a couple of scathing articles relating to Betfair yesterday. Betfair's losing streak:

Barely a week seems to pass without somebody senior at Betfair announcing they're off. Yesterday it was Edward Wray, chairman, founder and 11% shareholder. He told the annual meeting that he, too, is preparing his exit, apparently because the company wants to tick every box in the handbook of good corporate governance.

Wray's departure will take a while – a successor will have to be recruited and serve a short apprenticeship as deputy chairman. Even so, it's a significant addition to a long list of departures announced since flotation less than a year ago.

The tally includes chief executive David Yu (going once a recruit can be found: the search is three months' old) and Mathias Entenmann, chief product and services officer, who was flagged up in the prospectus as another key employee.

Then there's Charlie Palmer, head of mobile; Robin Osmond, chief executive of financial betting exchange LMAX; Matt Carter, director of research; Lee Cowles, director of UK sports and gaming; and Andrew Twaits, chief executive of the Australian operation.

Investors, pondering a share price 40% below its float level, may remember the third of the four reasons given for going public. A listing would "assist in the incentivisation and retention of key management and employees".

Yeah, right. To judge by yesterday's meeting, public life seems instead to have created a bunker mentality among Betfair survivors – rarely a good sign.

And Bounced from Betfair's annual meeting

Whether Betfair's annual meeting on Thursday was a drama or a comedy is a moot point. Either way, the venue – the headquarters of the British Academy of Film and Television Arts – could hardly have been more appropriate.

The backdrop for this latest Bafta performance had been developing for months, following the betting exchange's stock market flotation last October. Since then, the board has worked tirelessly to craft a £770m gambling group from a £1.4bn start.

Has chairman Ed Wray become a tad over-sensitive when reminded of that feat? Very possibly. On Thursday, Wray banned the media from the company's inaugural annual meeting as a public company – a move almost unheard of in the 21st century.

Just to be safe, he barred journalists who happened to be shareholders, too. Admittedly, the Guardian is neither a large nor a long-standing investor, having acquired its five shares on Monday precisely in order to dodge the media ban. The company's registrar liaised with our chosen broker and we received a proxy voting form alongside a letter confirming that we would be able to attend.

Betfair, however, had other ideas. Apparently, we had the "wrong type of form" or the one that we did have was filed too late.

Then followed a series of unorthodox excuses: "It is not the job of the Guardian to doorstep AGMs," said one PR. "We don't make the rules," said another, (er, yes, you do), while Betfair's legal supremo, Martin Cruddace, offered that the meeting was solely for shareholders (excuse me!).

His flunkies blocked journalists from accessing the auditorium – with one of the enforcers being a sheepish-looking former Sunday Times city editor, Paul "Doorman" Durman.

So what did the company have to hide? "Absolutely nothing," says Wray.

Betfair has missed numerous financial targets and seen its shares plummet, while chief executive David Yu and finance director Stephen Morana have been handed total pay rises of 125% and 445% respectively. Those windfalls – in effect doled out as a reward for getting the inflated flotation away – were trousered despite objections from governance groups including the Association of British Insurers and Pirc. A string of top executives and managers have quit or are leaving the group – and chairman Wray said on Thursday that he too would soon be stepping aside to spend more time with his millions.

Will he be missed? The poll at the annual meeting suggests not. Only 47% of the company's shares were voted in favour of his re-election, and 17% actively refused to support the co-founder. The news of another planned Betfair departure knocked the shares again, as they lost about 8% to 723p – 44% below the £13 flotation price.

All of which may have gone unnoticed by non-executive directors Josh Hannah and Ian Dyson, who were notably absent from their chairman's side. Were they barred, too?

A far cry from the esteem in which they were held by almost everyone who wasn't a rival bookmaker just a few years ago.

Wray To Go

Ed Wray, one of the founding fathers of Betfair, announced at Betfair's AGM yesterday that he is stepping down as Company Chairman. Scott Ferguson formerly worked for Betfair, and had this to say about his time there:

It was all about working for Ed and Bert, and their dream. A dream that turned into something huge, and naturally, as it became a big corporate entity the fun slowly disappeared. It was no longer building someone's dream with an ethos of being the punter's best mate but turning into a soulless place desperate to float and with its heart set on screwing punters for every penny they can get.

Those comments certainly reflect the opinion of many, as the company has gone from being almost beloved by many to an, albeit necessary, evil empire in just a few years.

After reeling off a list of names of recent Betfair executives heading for the exit - CEO David Yu; chief product and services officer Mathias Entemann; head of mobile Charlie Palmer; director of architecture, research and prototyping Matt Carter; director of UK sports and gaming Lee Cowles; director of European and public affairs Tim Phillips; CEO of LMAX (Betfair’s troubled financial betting exchange spin-off) Robin Osmond; and CEO of Betfair Australia, Andrew Twaits - Peter Amsel amusingly asks

Is it bad form to remind shareholders that one of the company’s key rationales for going public was that doing so would “assist in the incentivization and retention of key management and employees?”

Interesting that all media were barred from the meeting too.

On to more important matters now, and we have five XX Draw selections for this weekend. They are:

And finally, after about nine years, the film version of Michael Lewis's excellent book Moneyball has finally been released to good reviews in the US. Not out in the UK until November 25th, but who waits for official release dates these days? And your significant other will likely be up for watching it with you, since it stars Brad Pitt, who incidentally also owns the film rights to Lewis's book "The Big Short: Inside The Doomsday Machine", which actually makes the financial crisis of 2007 understandable. That's recommended reading too, if I've not mentioned it before - a lesson in holding a position that evidence tells you is value, and opposing a stubborn market.