I have recently finished reading the recently published (July 2010) “Sports Investing: Profiting From Point Spreads – Finding Value in the Sports Marketplace”, by Daniel Fabrizio and Joseph Hunter, and while there was nothing in its 115 pages to set the pulse racing, like most books of this type, it does generate a few ideas that may or may not prove useful.
Much of the contents could have been pulled straight from this blog. The dedication is to “anyone seeking value in the sports marketplace” and Chapter One is titled “Sports Betting, or Sports Investing?” along with a quote from Warren Buffett “Risk comes from not knowing what you are doing”.
Chapter Two is titled “Getting An Edge: Approaches and Tips”, and lists several comparisons to the financial markets.
There’s an interesting chapter on statistical analysis but rather surprisingly the chapter on Money management contains absolutely no reference to Kelly.
Overall, the book seems one big excuse to continually promote SportsInsights.com, a website founded by Daniel Fabrizio. Whereas one or two mentions might have made me curious, the site was mentioned so many times that I am now reluctant to visit the site!
Tuesday, 20 July 2010
Counter Productive
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I can't stop wondering about the practical implementations of using Kelly while trading and I was wondering if you could give your insight as to why you think it's useful.
While I can see the value for using a system where you place larger bets on picks that have more value and are more likely to come in (as opposed to high odds picks), it seems to me that having to correctly price the true odds in play, calculate the Kelly while keeping in mind the available liquidity (that fluctuates a lot in play, specially on lower liquidity sports) are too much practical problems to really use Kelly as opposed to using it as a guideline. Then there is issue that you're not punting and letting all your punts run, but rather you trade out of your positions often, thereby reducing the risk and making Kelly an estimate that is much too low.
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