Another Perfect Final

Betfair's official Starting Price for the League Cup Final between Liverpool and Chelsea yesterday was 3.8, while the 'official' odds I record using the Odds Portal average price was 3.73.

For the Under 2.5 markets, an alternative - lower volatility - way of investing in these selections, the most traded price on Betfair was 2.52 with 2.4 the average on Odds Portal.

A winning result for both investments, with another 'perfect' draw, and the ROI on the last 20 League Cup Finals increases to 56%, and that from the Under 2.5 (only 16 Finals available) to 19% using my conservative numbers which should be easily beatable in practice.  

In the seven Finals without a fair-priced team at odds-on, the Draw has come in five times, an ROI of 148%, and in the 11 "Big 6" Finals, the Draw has won 7 times with an ROI of 133%.

I've updated the Sacred Manuscript and hopefully as well as subscribers, some (if not many) of you followed my advice from last week regarding this match. 

Berkshire Hathaway Annual Letter 2024

The 2024 annual letter to Berkshire Hathaway shareholders was published this morning, and as some readers will know, I both own shares in this company and often comment on the newsletter's contents.

For a traditionally rather boring stock, it's been on something of a tear this year, up 17% already, second only behind my less boring Bitcoin "investment" (+31.7% YTD) in my individual holdings. 

As for the newsletter, unsurprising Warren Buffett opens with a tribute to his longtime partner Charlie Munger who passed away last November just shy of his century, crediting him with being the “architect” of the present Berkshire, while "I acted as the 'general contractor' to carry out the day-by-day construction of his vision."

Buffett introduces a sister, Bertie, and makes an observation about her that many sports bettors would be well advised to heed:

She is sensible – very sensible – instinctively knowing that pundits should always be ignored. After all, if she could reliably predict tomorrow’s winners, would she freely share her valuable insights and thereby increase competitive buying? That would be like finding gold and then handing a map to the neighbors showing its location. 

As he often does, and again readers will know that I have long followed this strategy, he extols the virtue of owning US stocks writing:

I can’t remember a period since March 11, 1942 – the date of my first stock purchase – that I have not had a majority of my net worth in equities, U.S.-based equities. And so far, so good. The Dow Jones Industrial Average fell below 100 on that fateful day in 1942 when I “pulled the trigger.” I was down about $5 by the time school was out. Soon, things turned around and now that index hovers around 38,000. America has been a terrific country for investors. All they have needed to do is sit quietly, listening to no one. 

The index is actually above 39,000 right now, and while I prefer to track the broader S&P 500 Index, I'm sure there will be a lot of articles written when the 40,000 level is reached Started in 1896, it's not quite the OG of indexes, but it's second behind the Dow Jones Transportation Average which started in 1884. 

Buffett is very much a proponent of leaving things alone when they are going well, and talks about the holdings in Coke and American Express that Berkshire Hathaway have held for many years:

During 2023, we did not buy or sell a share of either AMEX or Coke – extending our own Rip Van Winkle slumber that has now lasted well over two decades. Both companies again rewarded our inaction last year by increasing their earnings and dividends. Indeed, our share of AMEX earnings in 2023 considerably exceeded the $1.3 billion cost of our long-ago purchase. 

And of interest to me with my new focus on dividends, Buffett adds:

Both AMEX and Coke will almost certainly increase their dividends in 2024 – about 16% in the case of AMEX – and we will most certainly leave our holdings untouched throughout the year.

The newsletter touches on a variety of topics including climate change, mental health and the challenges of hiring employees in the rail industry and as always, the 17 pages are worth a read in full - it can be found here. 

The annual review I mentioned yesterday went about as expected given the "financial headwinds" that have been mentioned, presumably to dampen expectations. It was no secret that senior grade levels would not be receiving any merit increases this year, and the bonus was down about £20k from last year with the options and RSUs set the same as 2023.

The tone of the conversation was all rather negative regarding the future and when job cuts were hinted at, I took the opportunity to express an interest in negotiating a voluntary severance package which he will be taking to HR. 

Exciting times. I went out for my daily walk immediately afterwards, always good for processing thoughts and clearing your head, and I felt very positive about everything. With the US S&P 500 later closing at new high and my Royal London pension statement also up, it was a new high again for the personal spreadsheet so it's all good. 

If no agreement on severance can be reached, or no offer is made, it's not a big deal. Given my tenure, I'll get at least six months pay if / when they involuntarily sever me and by the time that date comes around I'll have worked a few more months anyway, and as I've mentioned before, it's very comfortable working from home so that wouldn't be a big deal anyway. 

Cups, Major Leagues and 673 Days

weirimdi followed up on his teaser of a comment regarding Cup competitions with some more data and some additional observations.

He wrote: 

Hello again, thank you for responding to my comment in your recent post.

As you suggested I looked at the ROIs of the respective leagues.
Here is a link the screenshot. https://prnt.sc/wAmY8WxJd54D

In addition to that you might want to look up the performance of major leagues in the Champions League when they play as an Away Team.
https://prnt.sc/u5y1fIA954AO

Another interesting angle here is that most of the Home Teams are underperforming. I included Group Stages/Qualifier/Knock Out Stages for CL and for the Cup selections too.

It has the data onwards based on maximum odds from betexplorer.com.
Thanks for the interest!

I might have mention this before, but I happen to love this stuff so thank YOU for the comment. The Cup data shows some interesting returns - Turkey's Cup with an ROI of 15.7% from 2000+ matches for example. 

As for the comment about teams from the major leagues when playing Away in the Champions League, yes I do track this although my idea about the 'major leagues' may differ since the highlighted ones are England, France, Portugal and Spain. 

Here are my numbers for the Big Five Leagues of England, France, Germany, Italy and Spain showing that opposing these teams (back the Home team if they are a Big Five club / back the Draw if not) is generally a good idea: 

More on this topic to come, possibly after the Round of 16 is complete and we have a little more data but - spoiler alert - backing an Away team from Germany, Italy or Spain is generally not a good idea with an ROI of -14%. 

Japan's Nikkei 225 index made a new high yesterday after 34 years, which is almost as long as the Israelites were wandering about in the wilderness, eating quail and manna. The S&P 500 index also closed at a new high yesterday, after recovering from a two year slump last month, and my own personal drawdown came to an end just shy of two years, (673 days to be precise) since a last high was reached on April 20th, 2022. 

The longest drawdown for my sports investing accounts was a mere 227 days back in 2007 but the mind is a funny thing and in many ways that felt a lot worse. I made a stupid mistake on New Year's Day and lost £5,000, what at the time seemed like a lot of money. As I've written before, it took me until August to recover, but I learned a valuable lesson from my error.

The new high comes at a good time psychologically. I have my annual review later today, and while any merit increase at my age is of little interest to me, I am much more interested in the size of my annual bonus and stock options. Perhaps not as interested as my wife, who has plans for new flooring, showers, cabinets and kitchen...  

With February extended by a day this year, there are still five trading days where it could all go horribly wrong, but I'm hopeful of ending the month at, or close to, a new high. 

Second Leg When Up / Down By 3+ Goals

With an early second leg match today in the Europa Conference League, and the remaining 15 matches in this tournament and the Europa League tomorrow, I thought a look at how the market views second leg matches - in ties that appear to be decided - might be of interest.

The data below is from the Champions League, Europa League and Europa Conference League games going back to the 2003-04 season. 

In matches where the first leg resulted in a Home win by three goals or more, the market overrates the probability of the Draw in the return game, and thus offers value on both the Home team and the Away team. 

I suspect a couple of factors are at play here - the Home team doubts their ability to recover from such a large deficit whatever the club's public pronouncements may say, and that the Away team feel that the job is done, whatever their comments might say. 

Both teams may also be tempted to make some changes to their starting line-ups making the game more difficult to evaluate.

As much as I enjoy a nice Draw, I'm quite selective in the profile of matches I select from, and the results suggest that opposing the Draw in these matches is a solid strategy. 

When a goal is scored, and only two of 65 such matches have finished 0:0, the tie is either effectively over or, depending on how much time is left, a consolation goal that the Away side aren't too concerned about.

Of those 65 matches, only 10 finished as Draws and in matches where one team was a fair-priced odds-on favourite, just two of 22 ended as a Draw. 

It's a similar pattern in the reverse situation, where a second leg Home team comes into the game with a 3+ goal advantage. Just seven of 46 such matches end as Draws, three being 0:0 draws, with profits to be found backing both Home sides and Away sides. 

Don't get too excited about the large ROIs when the sample size is so small, but definitely something to keep an eye on.

Moving on, and with the NBA at its mid-season All-Star Break, it's a good opportunity to catch up on how the systems for that league are faring so far. The basic system is up just 2.56 units (an ROI of 0.8%), with the more selective sub-systems up 5.17 units (4.7%) and down 5.82 units (-14.5%) for the smallest of profits, boosted by the Totals system which is currently up 5.5 units (3.9%).  

It's a similar story of meagre profits in the NHL which had its mid-season break a couple of weeks ago. Here the basic system is up 2.52 units (0.7%) but it's clear that the days of double digit returns on our investments are a thing of the past:

Since 2015, the Basic ROI is just 1%, with the Premium currently at 3.3%. 

Cups

weirimdi had a comment on my last post which was very interesting. He writes:

Hello, inspired by your work I collected the data for main international domestic cup tournaments.

The results are impressive.

I analyzed the data from main competitions in Europe, Asia and South America.

I looked for the results from 2017/18 up to the latest one this season.

The best performing ones:

Turkey +160 Units (mostly in early stages, but there might be a reason for that)

Korea +70 Units

Japan +50 Units

French Cup +100 Units

Spanish Cup +75 Units

Now I started looking at data depending on the respective leagues of the teams involved.

I think there are some angles that are worth digging deeper into.

Keep up the great work.

I love it when my posts trigger someone to research some of my thoughts and ideas further. weirimdi doesn't mention ROIs, but in fewer than seven full seasons, those unit totals are quite impressive. 

As readers will know, my focus for club football tends to be on the big European Leagues, the knockout stages of the European Club competitions, as well as the domestic English Cup competitions and end of season playoffs, but perhaps I need to broaden my horizons and take a look at some of the national cup competitions around the world. 

My reasons for not looking at other countries before are mostly a, possibly incorrect, feeling that the 'cup' competition is much less highly regarded than the League. 

In France for example, four recent finals (since 2000), have featured a club outside of the top two divisions there, something which seems rather unlikely to occur in the FA Cup despite Maidstone United's valiant effort so far in this season's competition, but the cup competitions in other countries might be worth a look based on weirimdi's research. 

Thank you weirimdi and feel free to share any more findings.

Right now we're in the middle of the European Competition knockout stages which are always interesting with some edges to be found. The Champions League is in its Round of 16 stage while the Europa and Europa Conference competitions are in a knockout round for a place in the Round of 16. It's only been in place for two seasons before this one and is effectively a Round of 24 with 8 teams receiving a Bye. While the results should be in line with those of the Europa Leagues former Round of 32, this may not turn out to be true as we gather more data. 

Back to England and the League Cup Final is just ahead. No surprise that the two finalists are from the Big 6 (11of the last 20 - this year Liverpool and Chelsea) nor that this is the second time these two clubs have met in this final in three seasons and the third in the last 20.

Backing the Draw in League Cup Finals has an ROI of 44% and in "Big 6" finals the ROI is 119%. 

International Draws Update

Although neither final in the 2023 Africa Cup of Nations and the AFC Asian Cup resulted in a win, both competitions did end up in profit, and if you bet the Draw in third-place playoffs you would have had a winner.

In Asia the profit from the 15 knockout matches was 3.13 units, an ROI of 21%, while in Africa the profit was a more modest 0.38 units, an ROI of 3%. 

The Africa Final was one of those rare matches where the favourite was the Draw, and while the sample size in International matches is small, it's a scenario where I don't feel the Draw is likely to be value.

In the 9,000+ EPL matches for which I have prices, not a single one has ever had the Draw as favourite, I wrote a post on the Draw as Favourite more than 10 years ago in which I attempted to explain why this scenario should never be the case. 

I did mention that where special circumstances exist, e.g. a Draw would suit both sides, the Draw could be favourite, but mathematically this shouldn't be true and in a knockout tournament, this situation wouldn't apply anyway. 

Some leagues do have the Draw as favourite relatively frequently, for example in the Spanish Second Division has had 131 such instances in the past six seasons, but backing the Draw in these matches would have lost you 5% of your money, which is worse than the 1% loss when blindly backing the Draw in all matches.

The International elimination games where the Draw has been favourite are:

None of the four matches involving African countries ended as a Draw.

Back to third-place playoff games, and with the D.R. Congo v South Africa match on Saturday finishing 0:0, backing the Draw in these games in International tournaments is now slightly in profit both in Africa and overall, which is somewhat surprising given that none of the combined 11 World Cup and Copa America third-place games have never ended as a Draw. 

The overall record for all active international competitions (elimination matches excluding the Draw when favourite) now stands as shown here:

Why the CONCACAF Gold Cup is such an outlier is an interesting question. I'm of the opinion that it's due to the teams being relatively imbalanced with a 'Big Two' of Mexico and the USA - who between them have won 16 of the 17 tournaments and comprised seven of the Finals - and a chasing trio of Panama, Canada and Costa Rica.

When these five countries meet in elimination games, the results are interesting and backing the Draw is actually quite lucrative, with an ROI of 50% from 20 matches. There was also a draw in the 2015 playoff match between the 2013 and 2015 Gold Cup winners - you guessed it, USA and Mexico - for a place in the 2017 Confederations Cup, so the results are actually slightly better but I don't have any odds for this game. 

There's no Gold Cup until next year, so while it might be tempting to skip this tournament completely, it may be worth keeping an eye out for the matchups just mentioned.

Asia and Africa Finals

The 2023 Africa Cup of Nations and the AFC Asian Cup both come to an end this weekend. 

In Asia the Final is between hosts and favourite Qatar and Jordan while in Africa hosts and underdog Ivory Coast meet Nigeria.

Finals of International Tournaments are generally good for the Draw, with the eight Africa Finals producing 1.83 units of profit  and the three Asia Finals up 3.31 units. The combined ROI from this small sample size is 47% and for all 43 International Finals it is 28%.

This is the first Final in the spreadsheet where a host nation has been the underdog, and the fifth where one has been the favourite - and in none of those previous four has any side scored more than one goal. 

Africa also has a third-place game coming up, D.R. Congo v South Africa, but these are not knockout matches and overall, backing the Draw is not historically profitable with the 30 matches showing an ROI of -4%. However, in matches where the Draw is the second favourite, the ROI is 15%. Backing the favourite has an ROI of 42% in matches where the Draw is third favourite. 

Following this, the NFL season also comes to an end with the Superbowl in Las Vegas where the San Francisco 49ers are 2 point favourites to beat the Kansas City Chiefs.  

As I wrote last year, it's very hard to find an edge in such a big game. This is the 58th Superbowl and of the previous 54 (excluding one pick 'em in 2015 and two pushes) Favourites are 28 - 26 ATS while for the Totals it's a 28 - 28 split between Over and Under. This is the Chiefs fourth Superbowl in five seasons and the second time they've played the 49ers having beaten them 31:20 in 2020. 

International Football Feast - Africa and Asia

It's not been the most productive start to a year in terms of posts, as some of you might have noticed. My focus has been in other areas, most notably reviewing my investment portfolio with more attention to dividends, (and for this I owe a big a big thank you to David and Simon for their help) and updating my retirement spreadsheet as that date moves inexorably nearer. I also sailed through another Dry January and at the behest of my son, have now signed up for a gym membership to work on strength training as I move into old age.

With the domestic and European football leagues passing the halfway point of the season, the Draw systems take a back seat with a noticeable decline usually observed in the second half, but we do have not one, but two international tournaments currently in progress where backing the Draw in the knockout stages is perennially a successful strategy as readers will be aware.

They are the 2023 Africa Cup of Nations and the 2023 AFC Asian Cup - despite the year being 2024, the two tournaments were both postponed and retain their original years in the name.

Both are at the semi-finals stage, and after the Round of 16 and Quarter-Final matches, backing the Draw in Africa is currently showing a small loss of 0.12 units while in Asia the strategy is up 6.13 units. 

The ROI from the 24 matches is thus a little over 25% so far this year, and while a small sample size is fairly meaningless, across the 376 matches since 2004, the ROI of 23.7% is very impressive.

The CONFED (FIFA Confederations Cup) tournament has been scrapped and so of current competitions only CONCACAF's Gold Cup tournament is negative, although it did make a small profit last summer.

Prices are sourced from the very useful Odds Portal site and on this topic I had a comment from weirimdi - possibly not his real name:

Hello again,

I want to re-ephasize how awesome it is to read along your journey. You inspired i think a rather quiet audience to have a better view on sports/investing and betting as a journey.

A few questions. I use football-data.co.uk often and have built my own dataset for other sports thanks to killersports etc.

Do you know another resource like football-data.co.uk which has the odds for cup matches covered?

It is very tedious to get them from oddsportal manually.

Second question: what is your experience of the time when to take a bet?

Closer to kick off to be nearer to the market status or as early as possible?

Best wishes

The answer to the 'cup matches' question is unfortunately no I don't. I use Odds Portal for these matches, and while it is tedious, I'm grateful that there is at least a source available. The other challenge with these 

For the second question posed regarding when to place your bets, for my systems it is best to place them as close to the start time as possible since the closing price is what determines them to be selections or not. As I've mentioned before, a match may look likely to be a qualifier for a system, but a late move in the line, total or price may ultimately disqualify it, while the opposite is also true on occasion. Many times I've backed an outcome that ended up not being a system qualifier, and many times I've not backed one that did end up being a qualifier. It's one reason why the 'official' results I publish are never going to be exactly replicated in reality.

Fun Versus Maths

Posted on Sportshandle yesterday, an interesting look at betting attitudes / philosophy in the USA observed since it was broadly legalised in 2018 and how betting may evolve over there. Are the edges in US sports about to erode?

Is America Lousy With Bad Sports Bettors?

One hedge fund manager thinks so, but 'bad sports bettors' is a loosely defined term

by Jeff Edelstein

Thanos: Supervillian capable of wiping out half the world with the snap of his fingers.

Chanos: Super hedge fund manager capable of boosting the stock price of DraftKings while simultaneously ticking off nearly 100% of the sports betting public.

So yeah: Jim Chanos is a longtime, soon-to-retire, and famed — he called Enron going belly up — hedge fund manager. His specialty is, and remains, short-selling.

And DraftKings was in his crosshairs. He started shorting the company in May of 2021, according to a Financial Times article. But then this past July — and after taking a $10 million profit — Chanos dramatically shifted his position. The man who made a living betting against companies turned bullish on DraftKings — and on sports betting companies in general.

“The betting numbers have continued to be strong in the U.S., stronger than we thought they’d be,” he told the Financial Times. “The thing that we underestimated — that I think is going to be a benefit for all these companies for a while anyway — is what bad bettors the U.S. gamblers are.” 

Ooof. Snap.

Parlay away

When it comes to “bad” betting, Chanos may have a point. A look at the volume of parlay wagering, for instance, paints a picture of Americans who aren’t exactly looking for +EV opportunities on their betting apps.

Now to be clear, most states don’t break down parlay numbers. But those numbers that are available say plenty.

In Colorado this past October, 21.1% of money wagered at sports betting sites was on parlays. That’s up from 17.4% the previous year. Same for September, from 16.6% in 2022 to 19.3% in 2023.

Indiana? A similar story. More than 33% of handle in October 2023 was on parlays, up from 28.3% a year earlier. September’s numbers were close to those, 30.4% vs. 28.4%.

And make no mistake — more parlays equals more money for the sportsbooks. Overall hold percentage, according to the Financial Times article, is around 9% across American sportsbooks, up from 6% or so when PASPA was still the law of the land.

Or take this nugget from New Jersey, as highlighted by ESPN’s David Purdum: New Jersey bettors, through November of this year, wagered more than $2.5 billion on parlays — and the books won more than $486 million on those bets, for a hold of (avert your eyes) nearly 19%.

So of course — of course! — Americans are bad bettors, just like Chanos says.

Right?

Well, it depends on what your definition of “bad” is. Also, of “bettors.” 

Terrible, just terrible

“Are Americans bad bettors? Right now, probably.”

That’s Jeff Benson, the director of sportsbook operations for Circa Sportsbook, which, since its inception in 2019, has been the North Star for the sharp set.

As to the why?

“I think many people nowadays have the ‘bet a little to win a lot’ mentality, while viewing sports betting as more of an entertainment product,” he said.

And that, right there, is a major dividing line between how people — both inside and outside the industry — view sports betting. Is it a serious income-generating endeavor? Is it a fun and inexpensive hobby? Is it somewhere in-between? Is it both? Is it neither?

“What even is a bad bettor?” wonders Alun Bowden, senior vice president for strategic insight at Eilers & Krejcik Gaming. “It’s a silly concept. Are slot users worse gamblers than blackjack losers? Is losing 5% good and 9% bad? It’s an insane way to look at this.”

Bowden thinks trying to bridge this divide between serious bettors and 14-leg single-game parlay wish-upon-a-star-ers is better left to the philosophers.

“You can’t frame gambling utility and entertainment from the perspective of a winning, +EV bettor,” Bowden said. “It’s like the Wittgenstein thing of talking to a lion. You just don’t understand each other because your frames of reference are so different.”

And if the lion, in this case, is the +EV bettor?

“America is a nation of horrible gamblers — ignorant of the odds, ignorant of the science, ignorant of the math. They always have been,” said Capt. Jack Andrews, a professional gambler for a quarter-century and co-owner of Unabated, which seeks to educate sports bettors.

“If Jim Chanos didn’t realize that until just recently, then he missed Atlantic City in 1978, Mississippi in the early ’90s where they couldn’t build the casinos fast enough to meet the demand, Foxwoods and Mohegan Sun in the mid-’90s where they literally couldn’t count the money fast enough and had to resort to weighing it rather than counting it. All fueled by bad gamblers. 

“Here’s the thing,” Andrews continued. “The richest nation in the world, the nation with the most discretionary spend, combined with a nation that believes they can make something out of nothing, anytime they want. It’s a toxic recipe.”

And while that “toxic recipe” can mean recreational gamblers will lose in the long run by making bad betting choices, Andrews also thinks it’s to the long-term detriment of the sportsbooks themselves.

“Bad gamblers are not sustainable gamblers,” he offered. “Chanos and the bag holders of gaming stocks all think there is an unending supply of bad gamblers in the U.S. However, the ghosts of A.C. and Tunica show us that despite being bad with money, when Americans have no money they gamble less and they gamble more infrequently. They go from wagering $1,000 a week on a variety of games to wagering $50 a week on a variety of moonshot SGPs.”

To the moon!

“Americans do — and have always — liked the longshot of a little risk and a lot of reward. But it does not mean they are bad bettors,” said Las Vegas-based consultant Brendan Bussmann of B Global Advisors. “It just means they look at the opportunity differently and that will continue to evolve.”

Adam Levitan is one of the founders of Establish The Run, a site dedicated to fantasy sports, but he sees the same thing as Bussmann.

“If everyone just bet straight major market sides and totals, close to the start of games, and simply shopped two or three books for the best price every time, they’d only lose the juice. Their win/loss record would be close to even,” he said. 

If you sense a “but” coming …

“But the overwhelming majority of bettors don’t want to do that. Because it’s not fun. So they bet parlays and SGPs and gimmicks and other bets the books shove down their throats,” he said. “Bets that they’ll lose 5 percent, 10 percent, 20 percent in the long term. And that’s fine, not everyone is trying to profit. Some people are just trying to have fun.”

Tock, tick

So why here, why now? Why have American sports bettors embraced the moonshot? Connor Allen, the sports betting manager for 4for4 Fantasy Football, has a theory.

“I think a lot of this coincides with the rise of certain social media channels glorifying the idea of ‘get rich quick.’ TikTok, Reels, Twitter channels are oftentimes focused on making money quickly, which inevitably [in the sports betting world] increases the sportsbooks’ hold, because they are taking bets that have a much lower chance of hitting,” Allen said. “Even personally, if I tweet out a bet that is -110 with great reasoning vs. a fun parlay that is 50-to-1 or something, the 50-to-1 parlay gets significantly more engagement. I think that’s representative of a lot of the U.S. betting market.”

Ryan Sigdahl, an analyst at Craig-Hallum Capital Group, wholeheartedly agrees with Allen.

“Americans are drawn to low-probability-but-high-potential-payout bets,” he said. “It’s why the lottery is so popular. Same thing for why Americans love sports-betting parlays. Small dollars bet to get high entertainment, and the sportsbooks are able to hold a higher theoretical win rate. Both player and house are happy. Win-win.”

Sustainable?

The big question — at least for the sportsbooks — then becomes whether this a sustainable way to run a business. Is Chanos correct in thinking the hold percentage will remain in the 10% range instead of the 5% range?

“I think it’s sustainable, as the recreational bettor loves a longshot and doesn’t bet enough to care that they lose a few bucks,” Sigdahl said. “The entertainment value is higher.”

Bussmann isn’t sure.

“The market continues to evolve,” he said, noting America’s newfound love of the parlay. “I think we need to see what all settles in before we can wrap up the American bettor in a pretty package.” 

Robert Walker spent a career managing sportsbooks such as the Stardust and MGM Mirage. He thinks it’s too early to pigeonhole American sports bettors and to make grand pronouncements about future hold percentages.

“It’s very early in the game,” Walker said. “I would expect the hold percentage to level off — or even decrease — as novice players become a little more sophisticated. I think the Nevada model — and I’m very biased — is an illustration of that.”

Of course, Walker’s assessment has a major unknown: Will America’s sports bettors wise up? Do they even want to?

“A little education goes a long way,” Capt. Jack Andrews offered. “Shop for the best price before you bet and you likely cut the house edge in half. Look for news related to the game you want to bet and you’ll likely cut it in half again. Consult with other bettors to see what you might be missing and it’s halved again. Use tools and resources to identify good bets from bad, and that house edge approaches zero or swings in your favor.”

Simple, right?

“I think we are still in the first inning and consumers are nowhere near educated yet, but once that comes — timing to be determined — then maybe you’ll see a more price-sensitive individual,” said Benson, Circa’s sportsbook manager. 

Sigdahl, for one, isn’t holding his breath for a Great Awakening in the sports betting world.

“The same reason you see people betting the middle of the craps table versus only playing the pass line with odds behind it,” he said. “The odds are materially worse, but [there’s] potential for bigger payouts” and the sense of fun trumps the math.

Andrews still holds out hope that for bettors, brains will win out over empty wallets.

“America was late to this party of legalized betting,” he said. “If we take the cue from other countries we’ll find that bettor education leads to a more balanced approach to betting. There are still plenty of bad bettors in the UK, Australia, and other countries which have been betting for years. However, bettors in those countries have realized that all that glitters isn’t gold in sports betting. It’s a more moderate spend.

“I think a lot of bettors will slowly evolve through attrition to be smarter bettors than they are now.”

Jeff is a veteran journalist, working as a columnist for The Trentonian newspaper in Trenton, NJ for a number of years. He's also an avid sports bettor and DFS player. He can be reached at jedelstein@bettercollective.com.

2023 In Review, 2024 In View

Happy New Year! It would appear that my opening post of 2023 could essentially be re-posted this year since not too much has changed. 

Here's what I wrote then:

The India work trip never materialised, with my employer keeping an even closer eye on the bottom line than previously, and travel budgets severely cut, but otherwise my comments from a year ago can be recycled. 

I still have absolutely no incentive to pull the retirement trigger. My responsibilities did increase in 2023 with a new team moving under me which almost doubled the size of my staff, and while there was no adjustment in compensation at the time, I'm hopeful that during the annual performance review in February this will be remedied. If not, or there's not a sizeable increase in bonus / stock options / RSUs, then that might be the catalyst for the much anticipated severance conversation.

Sports Investing

Overall for the year, my betting bankroll increased by 5.9%, with the NFL leading the way for the 7th time in the past 11 calendar years. The Cricket and Rugby World Cups were also nice bonuses, with baseball, NBA, NHL and Tennis also positive. Football wasn't so good with a small loss overall on this sport, which is proving challenging these days, especially the league games. Let's start there.

European Club Football

EPL Draws

In December, we had nine selections with only the all-Big6 clash between Liverpool and Arsenal finishing level. With a little over half of the season complete, the percentage of matches finishing as Draws in the Premier League is currently at its lowest since 1931-32 which is clearly not a good scenario for the Draw System. So far we've had just 28 selections (also a new low), and with only five wins the system is down 10.41 units, and the current ROI of -37% is also the worst on record for the Close Matches. The broader 'no-odds-on' method of selecting qualifiers has a -12% ROI. 

Bundeslayga

December generated 7.41 units but again overall for the season so far, it's similar in total to the EPL Draws with a loss to date of 10.91 units, although with a far higher number of selections (197) the ROI is much lower at -5.5%. Laying the Bundesliga.2 teams is actually in profit with an ROI of 6.2%, with all the losses in the top division.  

Segunda Draws

A 1.75 unit loss in December from 17 selections means that the season to date is down 6.98 units, an ROI of -7.8%. At one point we were down almost 15 points, so in a way we end the year on a positive note! 

Serie A

All very depressing reading so far, but at least Serie A is positive with December +1.36 units and overall for the season in profit by 4.71 units, an ROI of 19%. 

American Football

The reason this end of year update is a little late is because I wanted to wait for the NFL Regular Season to conclude, which it did this past weekend. The basic Small Road 'Dog System had a rare losing season for only the third time since 2005, down 5.39 units with a 29-33-5 record, but the Divisional System was in profit by 2.09 units. This system may finally be the victim of its own success with a lot of chatter on social media about home-field advantage being overrated which has been the case for many seasons as long time readers will know.

Fortunately the Totals systems did very well this season, with the basic 'Prime Time' system having a 33-23 record, +8.42 units, and the more selective Conference record up 6.47 units with an 11-4 record so for the NFL we enter the playoffs 11.59 units ahead overall.

With the College results adding another 21.63 units, this sport continues to be extremely profitable. The College finale was last night with Michigan beating Washington for the National Championship, and the NFL playoffs start this weekend with the Wild Card games.

NBA

We're not yet halfway through the current season but at the end of the year the two basic systems I follow (away teams and totals) were up 2.82 units and 10.27 units respectively. As I've mentioned, there was a new in-season tournament inaugurated this year, the NBA Cup which was won by the Los Angeles lakers, and early signs are that these games are best not included in the Away System, but we'll have to see where we stand once we have more data. 

NHL

At a similar stage in the season to the NBA, we're down 3.37 units as of year's end, although to end the sports piece on a positive, January has turned this red into green.  

Summary 

Not the first half of the season we were hoping for in football, but saved by the US sports. The situation is worsened in real terms by the imbalance between the time it takes to determine some of the football bets versus the US ones, and it may be time to focus on the big international tournaments (Africa Cup of Nations is here again with the Euros not too far away) and the big club matches both in European competition and the domestic cups and play-offs. 

Financial Investments

As I've mentioned before, betting comprises a very small percentage of my investing portfolio these days, and overall the more traditional financial investments were up 15.6% for 2023. 

Another 1.76% and the high of April 2022 would be surpassed, but with a recovery of more than 30% required at one time, 1.76% seems like a win although it has to be said that 2024 hasn't started off very positively. 

With 16% of my net worth in, or related to, my company stock, it wasn't helpful that the share price declined for the first year since 2008, though by less than 1%. 

The big individual winner in percentage terms was Bitcoin which was up over 300%, followed by Tesla which more than doubled finishing up 101.7%. In August 2021 I mentioned Chipotle saying that:

One company I've not mentioned before is $CMG (Chipotle Mexican Grill) which I bought last September, primarily because I suspected a stock split might be imminent.

Three plus years later and I'm still waiting for the split, but with the stock up 64.8% this year, my rationale might be wrong but I'll take those returns any day. 

Boeing shares were up nearly 37% and those were the only individual stocks in my play account (+32.6%) that outperformed the S&P 500 Index which was up 24.2%. By way of comparison, the FTSE 100 was up 3.8%, but as long time readers will know, I favour the US Indexes.

I'm also focusing more on increasing my dividend income this year as I transition into old age. I got rather excited when I looked at my December statements in detail and saw that the month had brought in £6,901.09 in dividends. Annualised, I was thinking, this is quite a lot of cash, but unfortunately upon closer examination, a lot of the larger sums in that total are annual payments rather than monthly or quarterly. 

More work to do in this area, starting with trawling back over the year to see exactly what is coming in since most are automatically re-invested, and it's probably something I should have looked at earlier. If anyone has any advice in this area, please leave a comment. 

Health and Fitness

Gains are not always good however, and in the category of weight (or at least fat), I was quite happy to see decent losses over the year. In December I hit my lowest weight since June 2011, and I'm just about in the "Normal" category now based on BMI. Perhaps not that great an achievement since I shouldn't have ever moved out of that category, but I'll call it an achievement. 

A Dry January should see me reach the goal of being "Normal", (my wife begs to differ), and the challenge then becomes maintaining it which will require a mental reset. 

As I close in on 67, my son is encouraging a shift from aerobic exercise (I averaged a little over 7 miles a day on foot last year - 2,561 miles / 5.3m steps in total) to resistance training. That will likely mean an increase in overall weight since muscle is heavy, but I'm preparing myself mentally for it. 

He's also suggested walking backwards would be good and while looking stupid isn't something new for me, I'm not sure I'm quite ready for this activity, but my wife wants to join a gym too so once the January rush is over, we'll be signing up on February 1st and see how it goes. 

I'm also planning to ride my bike more in 2024, which shouldn't be difficult given my total miles in 2023 was a very round number. A climb up Ben Nevis (hopefully to the top) in July will be my main hiking goal this year as that will complete the Snowdon, Scafell Pike, Ben Nevis treble. 

While the benefits of getting out each day and walking a couple of miles are clear, I'm not convinced there's a huge benefit in walking 7 miles versus say 3 or 4 miles, especially of most of those miles are flat. Maybe if I ran a larger percentage, but then after two right knee surgeries and the triple leg break of January 2021, I'm lucky to be walking at all! 

Books

I mentioned the goal of reading more in 2024 and so far I have finished "Elon Musk" by Walter Isaacson audiobook and just started "The Hitchhiker's Guide to the Galaxy" by Douglas Adams, which is long overdue. 

Best of luck in 2024 and thank you for following this blog.

Wild West

Long time readers of this blog will be, or should be, very familiar with the edge that has existed in the NFL since the 2006 season when backing certain Underdogs. 

It's one of the systems detailed in the Sacred Manuscript, and while I mentioned in my last post that the basic system hasn't had the best of seasons this year, an ROI of 9.6% from 1082 games is noteworthy.

As with many basic systems, there are certain conditions that improve an ROI, and with the basic rationale of this system that home-field advantage is overrated, this system is no different.  In US sports, travel is often a significant issue as I've mentioned before with four time zones spanning the country, and there are also major differences in climate and altitude. 

While some sports such as the NBA have made changes to schedules over the years to reduce the impact of travel:

NBA Home vs Road Score Differential is 5.4 points over the past 20 years and chart below shows it by team. This is road versus home, meaning that home teams win on average by 2.7 points. Top two teams have thin air, bottom two teams in NYC.

Thanks to Smoke The Books for this, an account worth following in my opinion and I believe it was this account that pointed out there are now websites showing you the travel schedules for NBA and NHL teams. Next level analysis! 

As touched on in the quote above regarding the NBA, the two home teams with the biggest advantage are the two at the highest altitudes - Denver Nuggets and Utah Jazz.

Utah has no NFL team, but Denver does, with the Broncos playing at the "sponsor" at Mile High stadium. (The owners seem very keen to keep the reference to Mile High in there). 

The Western divisions, conferences and teams are of interest not just because of the mountains, but also because teams are far more spaced out than in the Eastern side of the country and travel (which works both ways) can be significant. 

For example, the Kansas City Chiefs play in the AFC West and have to travel about 1,350 miles when playing a Divisional game in Los Angeles, and are geographically farther East than the Dallas Cowboys who play in the NFC East.

Obviously there are lots of permutations to look at, but back to the NFL's AFC West and when following the Small Road 'Dogs System for games hosted in this division, the percentage of winners is 72.3%, compared to an overall 56.3% across all games. 

Unsurprisingly, the next best division is the NFC West, and the two worst divisions neatly filling the lowest two places in this table are the Easts although 'worst' here is a relative term since this is still a profitable strategy here. 

The NFL regular season is almost over, with the final games on the first weekend of 2024, and another year is over. 

Merry Xmas and / or Happy Holidays to everyone reading this, and all being well I shall be back in the new year for a 17th year of blogging. Stay healthy, and good luck.  

Totals Beat Spread

Not since December 2005 has an NFL Total been set at 30.5 or lower, but Week 14's Thursday Night game between the Pittsburgh Steelers and the New England Patriots ended that almost 18 year run. 

The Patriots' previous three games had a combined total of just 39 points scoring 13 and conceding 26 and for the season they were 9-3 on Unders, while the Steelers had gone Under in 10 of their 12 previous games so it wasn't a surprise to see a low Total. Historically backing the Under on the few low totals in this range has been profitable with a 7-2 record but the total went Over with the Patriots winning 21-18. 

Thanks to Frederic J for pointing out that there was more interest on the Total in this game than on the Spread, though whether 'more bets' was also 'more money' isn't specified.   

With Week 15 currently in progress, we're getting close to the end of the regular season, and after three consecutive losses for the Small Road 'Dogs, we're possibly looking at a first losing season since 2017 for this system and only a third losing season since 2005. 

We still have something like 14 possible bets to come, including four today, so all is not yet lost. The Divisional sub-system is in profit as are the Totals Systems, although the latter have been having a tough time recently too with only one win from seven selections. The College System ended the season with a 45-31-4 record, an ROI of 14.8%. while the Totals System ended at 46-34, an ROI of 11.7%. 

At the end of November I wrote that the gain needed to recover and get to a new overall high was 4.4%, and at the halfway point in the month, with just eight trading days left for the year, this percentage has been gradually whittled down to just 1.76% with the major US Indexes either at, or near, all-time highs.

$TSLA is also helping, having a good month so far, although my employer's stock isn't, and is in danger of having a losing year for the first time since 2008. As of Friday's close, it is up 0.2% for the year, which isn't great for my Options and RSUs, but at least the exercise price on any new ones awarded next year will be lower and my discounted purchase price for the Employee Stock Purchase Plan will be similarly lower in January. 

November Numbers, Charlie Munger and Books

In my inbox yesterday were two emails, one from The Economist and one from The New York Times, both offering their 'best books of 2023'.

According to The Economist, the average (median) American reads five books a year. I'm not sure how that compares to other countries, but it doesn't seem like very many. The recently departed Charlie Munger was quoted as saying "In my whole life, I have known no wise people (over a broad subject matter area) who didn't read all the time – none, zero."

His former partner Warren Buffett spends "five or six hours a day" reading books and newspapers. Elon Musk read more than ten hours a day in his youth, and Bill Gates reads more than 50 books a year. Mark Cuban spends about three hours reading every day and has attributed his early career success in life to reading. Steve Jobs was also an avid reader, and was quoted in The New York Times as saying "the fact is that people don't read anymore. Forty percent of the people in the U.S. read one book or less last year." I'm not sure where he pulled that 40% number from, but Jeff Bezos is also a voracious reader who reportedly "has often credited his success to the books he has chanced upon over the years."

While becoming a billionaire isn't the only measure of success in life, and almost all the names mentioned above have been what might be considered failures in other areas of their lives, the evidence appears to support the idea that reading is an activity that should be encouraged. 

With an expected 20 more years on this planet, an average of one book a month would mean I have only a couple of hundred books left to go, which is a very depressing thought, although with more time for this activity in the future (assuming retirement happens at some point), one book a week doesn't seem an unrealistic goal which raises the number to four figures which makes me feel a little better. 

James Joyce once said "Life is too short to read a bad book" and while I used to feel that having started a book I needed to finish it, I'm getting better at stopping if I'm not enjoying it. (It took me years to master the art of walking out of a cinema when a film wasn't enjoyable, darn those sunk costs, but I got there in the end). Best to only do this if you're alone though, as wives / girlfriends tend to find this behaviour unsettling if you get up and walk out. And yes, I did make that mistake on one occasion, although in my defence I did let her know what pub I was headed to.    

The most recent books I've finished were Morgan Housel's "Same As Ever" (very enjoyable, although perhaps not as good as his first book "The Psychology of Money", which was always going to be a tough act to follow, and prior to that the Sam Bankman-Fried / FTX story "Going Infinite" by Michael Lewis, one of my favourite authors but again not his greatest book as he has also set a very high bar. 

I'm currently listening to the Elon Musk biography by Walter Isaacson on the recommendation of my son (who incidentally got engaged last month) as he is a big fan of the author and 28 chapters in, it's a very interesting listen.   

The benefit of audiobooks is that I can use the time I spend walking or running each day productively although more of my time these days is spent walking, and if I'm running I should probably concentrate more on not falling over and breaking anything again. 

Are audiobooks better or worse than actually reading?  Apparently "there is little to no difference in comprehension between the two types of consuming literature. Even though the information is processed differently by our brain, recent audiobooks vs reading research from 2021 showed that the overall difference between reading and listening in terms of comprehension was negligible" so that's good! 

I do find my mind sometimes drifting while outside, requiring a rewind, but the same thing happens when I'm physically reading a book. My mind will wander and I suddenly realise that while my eyes have processed a page or two, my brain wasn't paying attention and didn't register the words. Hopefully that's not just me, but it seems like a no-brainer to spend my 90 minutes a day walking / running time listening to a book.

At this time of year I start planning for the new one, setting goals (something within my control) and targets (those outside my control, e.g stock market returns) and reading / listening to more books will be part of that exercise next year.

With November behind us, here are the monthly system updates which most of you are interested in, as well as a few more general / personal updates which most of you probably aren't interested in - but documenting them helps keep me focused. 

Starting with the American Football systems, and overall the six systems had a 49-38-1 record, which is an ROI of 10.8% and up 8.65 units. December will be a little quieter as the regular College Season ends next weekend. The NFL Systems were 19-12-1 while the College results were 30-26. 

Only a few Draw selections in the EPL last month with the International break reducing the total number of matches to 30. Of the nine qualifiers, only one (Everton v Brighton & Hove Albion) finished as a Draw for a monthly loss of 5.48 units. Fortunately this loss was pretty much offset by the Draws in Spain's Segunda División of which there were seven from 17 selections and a welcome profit of 5.06 units.

The Serie A system only had three selections and lost 1.61 units while in Germany the profit was 3.55 units from 36 selections. 

Over in the States, the NBA season had its first full month but the two main systems overall had a 48-51-3 record for a loss of 5.3 units, while in the NHL we were up 3.61 units from 70 selections which all adds up to a profit of 8.48 units for the month from 325 selections, an ROI of 2.6% which might not sound too exciting, but which I will take any day of the week, or month of the year for that matter. There were also some profits from the Cricket World Cup that have previously been reviewed so I'm not going to count those here again as they are not included in the Sacred Manuscript. 

As for the big picture, well November was very good indeed - the 4th best month (out of 155) on a 'per day' basis and 5th best overall. Only 13th best by percentage gain at exactly 5.00%, but I'll take that any day also. For those who like their numbers, the S&P 500 ended the month with a poker straight, at 4567.8 but more importantly was up 8.9% for the month, and Tesla was up 19.5%. 

Even boring old Berkshire Hathaway was up 5.5%, with the passing of Charlie Munger taken in its stride and my less boring FOMO "investment" in Bitcoin was up 13%. It's having a good year, my best performer to date +265% with Tesla up by a mere 95% YTD. 

All things considered, a great month although I'm still in a drawdown from my 20th April 2022 all-time high, but the gain needed to recover is now just 4.4%, much improved from the 20.02% gain needed just over one year ago on 12th October 2022. Another month like November and I'll be back atop the mountain and retirement will psychologically definitely be easier if I'm at, or near, the summit. 

As for my heath goals, considering the excesses of Thanksgiving Day with my wife's family, overall a loss of 5.6lbs was quite a good result, achieved because I was able to keep Sober October rolling well into November. When I have a drink (or two), on average my weight two days later is up by slightly more than a pound (1.037lbs to be precise) a number that is slightly higher than the morning after a drink (or two) which is up 0.85lbs - probably due to some dehydration. 

My average weight in November was its lowest since July of 2011 which I am very pleased about. December is always a tough month for weight though, with an average weight gain of 5lbs a year over the past 12 years but if I can keep the damage to a minimum, a solid Dry January should get me back on track. 

I ended the month at 2,276.8 miles walked / run for the year, and my revised goal of 2,400 miles should be hit before Xmas. My original goal of 2,023 miles in 2023 turned out to be far too easy and was achieved in October. Thank you employer, for the extra hours now available to me as a telecommuter. I shall use them on books next year. 

For 2024, I think I'll be better served by taking fewer, but longer / more challenging walks, and I do have plans to hike up Ben Nevis in July, (another summit to aim for) so training for that will help. 

Finally, a couple more quotes from Charlie Munger who as I mentioned earlier passed away last week just a month shy of his century.

"You don't have to be brilliant, only a little bit wiser than the other guys, on average, for a long, long time."

“It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.”

World Cup Cricket and Two-Thirds Century Wraps

Despite finishing with a loss in the final, my first real participation in cricket betting during this World Cup has been a positive one. 

As I've been mentioning these past few weeks, backing most favourites in World Cup games had a decent ROI of 4.9% from the previous three tournaments and while overall the ROI has since declined to 4.3%, by passing on the ultra-hot favourites which historically are a losing proposition, the 2023 numbers were +1.63 units from 40 matches. 

With Thanksgiving Day coming up, an American wife and a two-thirds of a century "birthday" coming up tomorrow, I'll be on Overs this week. Overseas with the in-laws, over-eating and possibly over-drinking for the next few days. I like to mark these special occasions, although my wife thinks I'm a little crazy. For my one-third of a century I went to the Bahamas, and for my 25,000 days celebration in September of 2025 - which also happens to fall on a US Holiday (Labor Day) - well who knows. Hopefully I'll still be above ground, but life can come at you fast.