Saturday, 27 February 2010

Missing The Point

A good night last night, with Schalke 04 spotting Borussia Dortmund a penalty early in the second half, but recovering to win by the predicted one goal margin(2-1).

In the League One game at Southend United, Charlton scored an injury time winner to take away a win on the predicted draw. If there is a time to lay-off in play, then it is in situations such as these.

And now to the main theme of this post - is it just me, or are some people missing the point of the Elo ratings out there?

Anonymous, (and without fail, these negative comments are always ‘anonymous’), comments:

“What is the point in these 'ratings'? In over 80% of matches the winning margin is two goals or fewer. So you will be right most of the time even if you say those things at random.”
Well, my friend, the point of these ratings is to find value and make some money. I rather thought that most people would have grasped that concept by now.

Agreed that in most matches “the winning margin is two goals or fewer”, but your statement is very misleading.

Of course I would be right most of the time if my predictions stated “Aston Villa will beat Burnley by 2 goals or less, or it could be a draw, or Burnley might win, but not my more than 2 goals” but I don’t.

Not only do my predictions sometimes call for 3 or 4 goal wins, but I am also not just naming a winning margin. I name the winning team, which means that in “80% of games”, there are five possible targets to hit, not just three.

As for the suggestion that random guesses would result in ‘being right most of the time’, that’s quite possibly one of the most stupid comments I’ve had on this blog, and that’s saying something. I challenge you or anyone else to forecast the final margin and “be right most of the time”. It’s impossible. Do the maths.

Before you start, there’s the 20% of matches that will be wrong because they fall outside of the 2 goals or less margin. Then of the remaining 80%, you have five outcomes (+2, +1, 0, -1, -2) and thus a purely random guess would hit just 16% of the time. You could eliminate predicting Away wins and be right more often, but you are losing the 25% of matches that end in Away wins and your ‘random’ wins are highly unlikely to return the average of 3.75 that you would need to be profitable.

Besides, the aim isn’t to be right ‘most’ of the time. The aim is to find value, i.e. to be right more often than the implied probability of the odds suggests.

Anonymous is also making the novice’s mistake of assuming that a high number of winners is more important than the quality (i.e. price) of the winners. It isn’t. Quality over quantity.

To illustrate the point, if you back Real Madrid, Barcelona, AS Roma, Chelsea and Mallorca to win at home, you’ll get a lot of winners (55 from 60 matches this season), but at short prices (except for Mallorca, but that’s my secret) which are unlikely to continue to be value long-term.

Alternatively, you back a team to win by 2 in the Correct Score markets. If the ratings are good, then you will have value. You won’t win every time, but your wins when they do come will more than make up for the losses.

At the moment these selections win by the expected 2 goals 43% of the time. With the 2-0 paying approximately 7.6, 3-1 approximately 14.5 and Any Unquoted 6.6, it should be obvious that I am finding great value on these, at least for now.

Backing the draw in the EPL is excellent too right now. A 47% strike rate compared to an average price for these at 3.45 (29%) shows that I am getting huge value.

There are also the Asian Handicap markets which might be a good place to use the margin of victory information. I’m still new to these, and don’t find the liquidity on the exchanges here too great, but presumable somewhere there are low over-round markets available.

One of the problems with this style of betting is that you won’t, and shouldn’t expect to, win every time.

In the Premier League, 31.28% of the time I get the winner spot on. I think that’s quite good, even though on a full weekend I can only expect to get three matches exactly right, and statistically I am likely to miss all 10 matches from time to time, but it’s the big picture we need to focus on, not one day, one week or one month.

What’s the point? Anonymous may be missing it, but hopefully the sharper minds out there at least find the idea interesting even if just watching from the sidelines.

I’m adding a poll to get an idea of opinions out there. Speak now, or forever hold your peace. Oh, and good luck with the football today.


Edgehunters said...

Hi Cassini

I have just voted.

With regards to the anonymous critic of your ratings, I am pleased that he did say something because the sheer quality and quantity of information in your response was an education in its self. Not just about the ratings but betting in General.

I am sure you a have heard this quote before but I think it is so apt on this occasion that I have got no choice but to share it again.

“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.”

Theodore Roosevelt

Keep up the good work.


stewart said...

"anonymous" is probably one of those super smart types that frequent the betfair football forum, eaten up with envy and hateful of anybody who can make a profit, i wouldnt even bother responding to such posts, keep up the good work and many thanks for the ratings, they deffo work for me

Anonymous said...

First I have to second the above, it is great to read well thought out and sensible posts all the time in your blog.

With regards to hitting 43% of 2 goal margins, does this include the times when AU comes into play without it being the exact margin? A general dutch of correct scores seems to pay around 7/2, but going to traditional bookies might pay a little better if you play the tie in the +2 handicap markets (PP is 9/2 that outcome in the Birmingham game for example). Obviously that doesn't take into account the extra winners AU will give you, the fact that you might play selections for differing profits or that you might not be able to get on as much as you'd like, but nonetheless I'd be interested to hear your thoughts.



Unknown said...

Value Graphs.

If birmingham, chelsea and liverpool are all expected to win by 2, they all have an equal "supremacy" over their opponents, however their odds are 2.0, 1.5 and 1.4 to win. Clearly Birmingham is the value bet. However, what if Birmingham's odds were 1.8 or 1.6? What's the threshold of value?

The answer must be a graph of supremacy vs odds. You could use the actual elo rating supremacy rather than just the expected win margin. Plot the line of best fit, and any outliers falling on the high odds side must be value.

If you only took on win bets where the odds were, say, 10% better than the line of best fit says they should be, surely you've converted your elo ratings into a nice value finding system?

Anonymous said...

Saying, they are going to win by one or two can be found out simply looking at the match odds in a couple of seconds. What is really interesting is if your ratings are showing value and that isn't coming across in your blog.

What you should do is post up all your past forecasts, the odds available, the results and your net winnings. That would show that your selections are showing value.

Anonymous said...

Real traders are taught that the Holy Grail to Investing doesn't exist. Real people were taught that all the planet's move about the earth, don't go to far out into the ocean(you'll fall off the earth), on and on..........

When one looks outside the box(inventor), goes against the group(thinks for self), said they found(developed) something that is supposed to be impossible(airplanes), they were once killed. Now these people are called bad names and delegated to be unheard, and ignored group.

I developed multiple arbitrages that enable me to trade(not invest) in the finacial markets, without risk(The Holy Grail to Investing), or arbitrage that anyone can do. Over 30% a year.

Thomas Adair

Anonymous said...

I'd feel slightly uncomfortable about a system which makes predictions as opposed to pricing up and therefore picking value, but so far so good.

Anonymous said...

So it's OK for cassini to have a pop at others but when challenged he just insults the poster. Nice touch.