The Siren of ROI

It was quite an exciting weekend for sport, with the Tampa Bay Rays beating the Baltimore Orioles on Saturday night another win for the T-Bone System...

OK, so maybe that wasn't most people's idea of the sporting highlight of the weekend, which for me was my son making his debut in the boxing ring, and opening his career with a first round TKO after about 90 seconds. 

For most people, I suspect the highlight was either the Formula 1 British Grand Prix, Wimbledon tennis or a cricket match.

The last two were certainly dramatic, with presumably vast fortunes won and lost on the exchanges for those who like donating their money to court / pitch-siders, but for me, those sports are to be enjoyed for themselves rather than as markets to trade. I did see that Federer had traded at 1.01 but didn't even look at the cricket. An edge in cricket, tennis or motor racing, I do not have. 

With football still a few weeks away from getting interesting again, sports investing at this time of year is all about baseball, with plenty of time for research for the new American Football seasons. 

I mentioned the Aestivation System I play in a recent post, and someone suggested another improved system for this time of year, with the qualifiers that the game be an intra-league game, that the home team has more wins this season than their opponent, and are favourites playing at home.

This is certainly impressive, all-time the records are:

But one can get caught up in the race to find a glamorous ROI. Remember my 2011 post:

Those who’ve spent a lifetime maximising ROI, I guess you’ve now realised that in a punting context, those who are able to grow their bank balance more significantly are, by most people’s definition, the more successful.

So, in summary...Return on Investment for show, Rate of Bank Growth for dough. £, not %.

The key to this strategy is simply that the market undervalues favourites out of the All-Star Break, which is all I concern myself with.

The only point in eliminating perfectly solid bets for the sake of an improved ROI is if you don't have the time to place the bets required by the system and need to focus your time and energy on the big dividend generators.

Value is so hard to find though, that it'd be a waste to leave money on the table. 

One strategy I use is variable staking, so the basic system from the above example would be to back all favourites, but back the higher ROI bets with larger stakes. 

Why ignore those Away Favourites with the miserable ROI of "only" 16.7% just because the Home ones are at 21.1%?

Regarding the intra-league qualifier, very few first matches after the break are non-conference affairs, to be precise just five, so while they do have a losing record of 2-3, (1-3 at home, 1-0 away) that's a meaningless sample size.

It's not hard to find high ROIs, but typically they come at the expense of only offering a few bets. 

If you back Chicago teams playing night games against Divisional rivals as dogs when Joe West is the home plate umpire, you're looking at an ROI of 130%, but 6 games from 2007 isn't too much evidence! 

Changing Numbers

Either it's a remarkable coincidence, or this blog is more influential than you might think.

Following on from my recent Centering The Pill post, Axios jumps on to the story with this piece:

MLB accused of juicing baseballs following historic home run surge

Yesterday's Home Run Derby news cycle began with All-Star Justin Verlander emphatically saying that the league is juicing the baseballs, adding more fuel to an already raging fire.

By the numbers: MLB teams are projected to hit at least 6,463 home runs this season, which would break the all-time record set in 2017 (6,105) by almost 400, per WashPost.

"It's a f---ing joke. Major League Baseball's turning this game into a joke. They own Rawlings, and you've got [commissioner Rob] Manfred up here saying it might be the way they center the pill. They own the f---ing company. If any other $40 billion company bought out a $400 million company and the product changed dramatically, it's not a guess as to what happened. We all know what happened.

Manfred, the first time he came in, what'd he say? He said we want more offense. All of a sudden he comes in, the balls are juiced? It's not coincidence. We're not idiots. ... They've been using juiced balls in the Home Run Derby forever. They know how to do it."— All-Star Justin Verlander, via ESPN

Context: MLB does in fact own Rawlings, but they purchased the company last summer — more than two years into this ongoing home run surge. Obviously, that hurts the argument that the balls were suddenly altered once MLB took control.

On the other hand, multiple independent studies have shown that, beginning in 2015, the balls changed. So perhaps MLB was influencing the design before the purchase?

Hitters are being coached to elevate the ball like never before, and that is certainly contributing to the record numbers, but something is going on with the balls, and the players know it.

The bottom line: I'm not sure we've ever seen anything quite like this juiced ball saga, and MLB's "nothing to see here!" stance grows more disingenuous by the day.

And here's the crazy part: If they'd just admit that something significant is going on with the balls — instead of gingerly suggesting that maybe something is afoot — would anybody be mad? Fans love homers, and even pitchers would likely appreciate the transparency.

Instead, Manfred continues to play defense, seemingly worried that anything he says will make the league look bad when, in reality, the only thing making the league look bad is that they refuse to fully acknowledge what every fan and player is thinking.

Well some people might be mad, yes. Anyone who uses stats to come up with an informed opinion might feel that the playing field has been tilted a little, but this is one of those times when someone spotting such a trend can do very well before the market catches up.

Which is why it is always worth looking at the numbers and at off-season rule changes. 

Not to give too much away, but the NFL is a great sport for this strategy. 

For example - look at how the missed extra point attempts jumped from 8 in the 2014 season to 73 in 2015, or the jump for two point conversions from 29 in 2014 to 84 last season.

There are also changes in strategy, many triggered my data analysis, for example fourth downs are attempted more frequently today than they were several years ago. With change comes opportunity.    

Back From Aestivation

After a slight setback last season, the strategy of blindly backing favourites in the first game after the All-Star Break returned a profit, which at 11.35 points was the highest since 2010.  

I mentioned this in 2016, so hopefully some of you made some money, although I must say that my inbox hasn't been overflowing with thank yous or donations. From 2016: 

One trend that did hold true again this season was that of favourites doing well in their first games after the break. The rationale for this is that although the better teams are likely to be better represented at the All-Star game, many of those will only put in a less than exhausting cameo performance, while the majority of their players enjoy the break and get some rest which apparently benefits better teams more than worse teams.

While I'm not typically a big fan of once a year systems, (a losing day lingers in the memory for a year), this one does appear to have some merit.  

Going back to the dawn of the MLB database, season 2004, (2007 for the Run Line), this idea has double digit ROIs of 13.6% on the Run Line, and 14.9% on the Money Line, and a total profit of 74.65 points.

Running Joseph Buchdahl's p-value calculator, the probability that the Money Line returns are by luck alone comes out at 0.24%, or 1 in 417. 

Sesquicentennial Season

It's hard to believe that the 2019 American Football season is now less than three and a half weeks away with the first pre-season NFL game kicking off on August 1st.

The College version of the game is on August 24th, and this season will celebrate its 150th anniversary on November 6th this season, with the generally recognised first game having been played in 1869 between Princeton and Rutgers, although the rules were more like Football (Association) than Football (American). Rutgers won 6-4, but a week later Princeton won 8-0 and the National Championship was shared, albeit retroactively! 

College Football can be complicated with 130 schools (teams) playing in the NCAA Division I Football Bowl Subdivision (FBS) with most (124) playing in 10 Conferences. Six teams are Independent. 

The ten conferences are themselves considered in two groups, the "Power Five" which are the strongest, and the "Group of Five" which are the weaker ones.  

 

Overall, as readers of this blog will know, the strategy of backing small road 'dogs is a long-term winning strategy with a winning record every season this millennium, although in three seasons the hold (at -105) meant a small loss.

Some more observant readers may notice that the table of results on the left is slightly different to those previously published.

The reason is that I am restricting selections to the Division 1 games. The small number of other games included in the database don't add a lot of value to the results if it is almost impossible to get a bet on.

As a result the 8.1% ROI from 1,740 selections is now down to 7.9% from 1,657 selections, which established over 18 years should still be worth getting up for, although of course, some will say it's just chance and that there is no such thing as a public bias favouring home teams in this sport. Long may that continue.

Most college games are conference games, and the ROI from 1,120 games is comparable at 7.2%, but not all conferences are the same. 

In recent years, defined as the last five seasons, four of the "Group of Five" conferences each show a double digit ROI, with the Mountain West showing a small loss. 

In the elite, and modestly monikered, "Power Five" conferences, recent overall returns are steady, if not spectacular. 

With each conference having its own personality, there are of course differences between individual conferences, and with some conferences sub-divided into divisions, there are differences there also. 

My favourite conference, for personal reasons, is the currently top ranked Southeastern (SEC) conference, which is split into two divisions, East and West. 

Don't ask me why Missouri play in the East, when only two teams in the SEC are located further West. (Actually you can ask me why, as I do know the answer, but it's an odd alignment on the face of it). 

The West is the stronger of the two, with Alabama, Auburn and LSU winning 8 championships since the Bowl Championship Series was established in 1998, 

with the East winning 3 - Florida (2) and Tennessee. Alabama has also won 5 of the last 10 championships, and lost in another two finals.

As there is so much interest in Alabama, the markets do offer some opportunities. Back Overs when they play on a neutral ground (last ten seasons 76.9%), fade them at home and back them away (the public again overrates the home team).  

In conference games between East Division teams, there is no edge on small road 'dogs, either recently (10-10-0) or historically (33-34-1) while in the West all-time, they cover 54.2% of the time, and 66.7% in recent seasons. Look for Auburn to cover the 3.5 points on 21st September when they play Texas A&M.

When West teams play in the East, small 'dogs cover 55.6% of the time, (71.4% when the host is coming off a loss), while when East goes West, only back the small 'dog if they won their previous game as these teams cover 60.5% of the time. 

Centering The Pill

As I have mentioned before, sports change - rules change, tactics change, and sometimes equipment changes.

I have written many times about the NBA and the increase in three-point shooting, and the consequent increase in scoring, and a similar change, though perhaps less noticeable, is being seen in the MLB.

The MLB, or at least professional baseball in the United States, has been around for a while, starting in 1871. 

In that season, the average number of Home Runs per game was 0.19, and between that inaugural season and 1920, the average ranged between 0.06 and 0.39.

In 1929, there was half a Home Run per game, and in 1950 the 0.75 per game mark was reached. 

And then came the 'steroid era' which resulted in an average of one Home Run a game being reached in 1987, and again in 1994 where it stayed until 2010. 

Since then it has averaged 1.06, but very recent seasons have seen the average at 1.26 (2017) and 1.15 (2018).

All this is a long-winded build up to pointing out that this season, the average is at all-time high of 1.37, helping push the Runs per game average to 4.81, a number not seen since 1950 other than in the 'steroid era'.  

The reason given by MLB for this huge increase in Home Runs is that the balls have less drag, i.e they fly further, due to an improvement in the manufacturing process.

More drag means that the ball doesn’t travel as far. Now, according to Manfred, one of the things that may be happening is “they’re getting better at centering the pill. It creates less drag.” That helps the ball travel farther to create more opportunities for home runs.

It's also been observed that players have changed their swings in recent years to take advantage of this, and that pitchers are throwing more off-speed pitches, which is not as easy as throwing a fastball. This leads to more mistakes, and while a pitcher can often get away with a mistake heading to the batter at 95+ mph, a slower pitch can end up over the fence.

Indeed, Statcast reveals that only four of the 450-plus homers this season were on fastballs 95-mph or harder

More Home Runs means other changes to the way the game is played, for example the numbers for Stolen Bases and Caught Stealing are at lows not seen since 1971 and 1940 respectively. Clearly there's less incentive to make the effort to steal a base, if the hitter is going to belt a Home Run.

All good for anyone playing an Overs System, and the one I've mentioned is making record profits this season as we go to the All-Star Break.  

Going To The Dogs After The Break

In the article I referenced yesterday by Brad Allen, he noted that:

Sports Insights has found that blanket-backing favourites had been profitable before and after the break in recent years, although those studies only look at the one game either side.

While 'recent years' isn't specific, looking at the last five seasons, I didn't find this observation to be true.

Certainly blindly backing all favourites in the final game before the All-Star Break is a profitable strategy, +6.7% Money Line, +12.1% Run Line, while the first game after the break sees a profit on the Money Line of 6.7% and on the Run Line of 12.1%*.

* Corrected on 13.Jul.19 

Brad then wrote that:  

It would be interesting to see the results from a whole week before and after if anyone fancies running that…

Well who doesn't like to look at these things? 

Again looking at the last five seasons, the answer is that in the week before the All-Star Break, backing all favourites is profitable, but only slightly with the Money Line +3.48 points from 576 games, while the Run Line is +15.63 points from 575 games.  

Not an ROI to set the pulse racing, but a lot better than the week after the break, when the Money Line is down 22.45 points and the Run Line is down 33.61 points.

So is there a system here backing 'dogs in the week after the All-Star game? 

Blindly backing 'dogs will lose you a little, but there does seem to be an edge in Divisional games, where the Money Line has an ROI from 191 matches of 10.7% and the Run Line is 6.0%.

A final teaser: With a little further refinement, the ROIs from 48 games are 38.2% and 32.6% respectively, and profitable on both the ML and RL every season since 2011.

Breaking Down The Break

I mentioned Major League Baseball's All-Star Break this week, and an interesting article on the topic was published by @BradAllenNFL posting the question:

Is there any truth to the idea that betting baseball in the second half of the season is a losing proposition?

The All-Star Break (ASB) in baseball does seem to be more impactful than those in the NHL or NBA. I actually have one system that is active for the first games back after the break, but this, like my early season systems, is more for fun than any serious money given the small sample size. 

Brad's article was triggered by his observation that:

The last few years my baseball betting seasons have followed a familiar pattern; get nicely ahead by the all-star break then slowly drip profits back in the second half.

Conventional wisdom would have it that early in the season, off-season changes mean that the strengths and weaknesses are not yet fully known, and that as the season progresses, outcomes should be more predictable.

As readers of this blog will know, the evidence suggests that this simplistic view is incorrect. I talk about favourites a lot, mostly because in recent years, its been hard to lose money backing hot favourites. 

While the term 'hot favourite' is not a technical term, for baseball I use the -200 line (1.50) or shorter to define a hot favourite, and the before and after All-Star results from backing all these favourites blindly is:

These results combine the Money Line (ML) with the Run Line (RL), and so 52% of the profits (excluding 2019) come before the ASB, which rather like the Leave margin for Brexit, is insignificant. 

For 'white hot favourites', i.e. those at -300 (1.33) or shorter, the numbers since 2014 show a more significant split.

Excluding the current season, before the ASB, Money Line Favourites are down 1.95 points while after the break they are +19.60 points

For the Run Line, before the break has an ROI of 5.7%, while after the break it's a loss of 4.3%. The sample size is just 79, so don't read too much into these numbers. 

When it comes to my basic T-Bone System, the big difference is in games played in National League ballparks, where prior to the break, the ML and RL ROIs are 15.3% and 18.6% respectively, while after the break they lose 4.6% and 10.4%. The American League hosted matches are profitable throughout the season.

Regarding the Totals markets, my Overs System looking to benefit from 18 innings rather than 17 is profitable before the break +9%, versus 6.2% after, while the less lucrative Unders System, which looks for 17 inning games, is up 2.3% before, and 2.1% after, the break, although again, here games in National League parks are loss makers after the break. 


Basically, I agree with Brad's conclusion that edges do evolve as the season progresses, but that...

if you’re sharp enough to turn a profit on baseball in the first half the year there’s no reason you can’t back it up in the second half. Just watch out for some funkiness around the all-star break.

Month by month, backing hot favourites does show July to be a problematic month, something I've mentioned before:

Contrast the profits in July before the break of 16.80 points with the losses of 11.80 after the break, although all the losses (and more) come in the first game of a series. Avoid these, and July is profitable throughout.

One final thought from Brad was this:

Finally there’s the human element of the bettor involved. “MLB is a grind,” Andrews says. “Fifteen games a day nearly every day takes a toll on a bettor. This is the point where you just get so tired of the grind that you need to take some time off. By mid-July the focus of the nation turns to the NFL training camps beginning to spin up. Getting ready for NFL season is tempting.”

The beauty of my strategies is that they take about five minutes a day to process so burnout isn't an issue, and while I have started to prepare for the upcoming (American) Football season, it doesn't impact my MLB at all.