Thursday 21 May 2009

How Soon We Forget

From the Green-All-Over Archives, and what do I find posted on November 26th 2008? To make it easy for you, I shall tell you - I find this:

Q) And what is a good reason to enter or exit a position?
A) Because the market offers value.

We see this debate quite often on the gambling forums – whether or not to green-up. My answer is that you should only ever green-up if the market offers value. If you have backed at 2.0, and the current price is 1.5, some argue that you can’t go wrong with locking in a profit. I would argue that you lock in a profit ONLY if your valuation is that the correct price is above 1.5. If not, then this is a bad profit.

This is all great in theory however, but in reality and in the heat of the action, I must admit that I sometimes lay a big red total off simply because it’s scary seeing that red number on the screen. (I often have bets where I am red to the tune of close to £5,000, and winning or not, it sets the pulse racing which I am told is not good for me!) and while I might consider the value to be at 1.04, I am often happy to lay-off at say 1.06 just for that peace of mind and lower heart-rate).

Considering my previous post, this was rather a prescient observation, even to the exact price of 1.04 and my elevated heart-rate.

If only I read my own blog. I never realized just how much great advice I impart to you lucky readers.

Regarding my comment that you should “lock in a profit ONLY if your valuation is that the correct price is above 1.5. If not, then this is a bad profit” consider this.

Imagine you have placed a significant bet at the start of the season on Portsmouth to win the FA Cup at 1000, and somehow they reach the final to face a Championship team from south Wales. (Far-fetched I know, but bear with me). The price at which you can lay off is now down to 2.0, but other bookies (from which you have been barred for winning too much using advice gleaned from this blog) have them at 1.5, and this is the ‘correct’ price.

Do you take the profit, or let it run?


Rob The Builder. said...

I'd have already taken the profit at the quarter final stage! Probably why I'm a small time player.

PhilipH said...

Nobody loses money by taking a profit. OK, I know you might win a bit, or even a lot, more if you stay with it ... but keep in mind your blood pressure Cass.

I have a small investment in Nighthawk Energy; I bought in at 23p a few weeks ago. It crept up to 47p in a matter of days - based on the sale of certain land assets in the USA. I sold out about 60% of my holding for a profit and a no loss situation. Not a life changing amount by any means but I felt happier just cashing in, or greening up as you would say, and leave it at that. If the stock goes up to the £1 or more mark so be it. Much of the childish chatter on the website is ramping up the stock - but I've seen these hopes dashed many times in the past. Get out with a profit whenever possible, that's my opinion. But what do I know?

Cheers, Phil

Anonymous said...

i would have to say i would green up,green is good and all that.

Anonymous said...

I'd back the opposition who must be overpriced to win the tournament

Anonymous said...

i should have said i'd get someone i trusted to back the opposition for me

Cassini said...

Rob - immediately after making your bet, you went into a coma after a confrontation with extra-terrestials, and you didn't regain consciousness until the eve of the final.

Anonymous - the opposition are only available at 2.0 so you would choose to lay off? And do you really know someone you could trust?

Philip - I wish you well with your penny stocks - I think selling to cover your costs and get a free ride was a good move given the circumstances.