Friday 22 April 2011

Dr J Finds The Way

A post on the Betfair forum titled Reflections on making £200,000 profit in 7-and-a-bit-years written by Dr J caught my attention. In many ways, I could have written this myself. While Dr J got started a little earlier than I did, our stories and philosophies are similar, although not one penny of my winnings has come from horse-racing where Dr J seems to make most of his money. There's some good advice here though, the key being that the author finds value, and maintains discipline.

We both bet part-time having jobs that allows us this flexibility, and we both treat Betfair as something akin to a computer game where the goal is to improve your "high score", rather than be motivated by the money alone. His comments on experience also ring true, as do his musings on maintaining a healthy balance in life - something I am making a definite effort to improve on myself this year. I too started out on Betfair with the idea of experimenting and viewed it as a challenge competing against others with no idea that there was serious money to be made until almost two years had passed. Obviously I'm a little slower than Dr J, but then if he's a doctor, that's perhaps understandable. Here's his post in full:

I hesitate before starting a thread like this, but I posted something similar when my Betfair account hit £100k and it was interesting to hear the views of other long-term punters. It's also good practice to pause and reflect on your gambling from time to time, and this seems like an opportune moment.

I began betting seriously in January 2004. Prior to that, I'd used my Betfair account to experiment with and to have fun with. But I realised that I could make decent profit from what I was doing and wanted to pit my wits against other punters.

My profit figures since then have been:

2004 20,003.81
2005 31,407.24
2006 52,316.70
2007 45,490.42
2008 10,656.92
2009 14,042.02
2010 7,248.54
2011 19,000.00 (approximately, so far)

I bet part-time. I'm lucky to have a day job that allows me flexibility. I can work mornings/evenings/weekends and spend a fair chunk of the afternoon here. My day job has nothing to do with sport or gambling and that's a huge benefit. The contrast is perfect.

When I first started, my approach was to find as many edges as possible. I'd bet on several sports in several ways. However, close inspection of my records showed that only one kind of betting, based around certain horse racing markets, was consistently profitable. I therefore took the view that exploiting one edge in a systematic way was preferable to constantly searching for lots of betting opportunities. Sometimes I see clear value on non-racing markets, but I don't take it. I make enough from what I do.

I built my own bank before I started. Just a few thousand pounds in case I got off to a bad start. These days I keep about £15k to hand to cover a losing run.

Naturally, you need discipline to make this game work. But after a while discipline becomes habit. I used to take the view that having nine or ten profit-making months per year was fine, but then I realised that this kind of thinking was making me complacent. I now do all I can to finish every month in profit, and this month will (hopefully) be my 11th consecutive profit-making one.

Some days, you do everything right, and are happy with all of your bets, and still lose. They're the hardest days. You have no-one to blame and no guarantee that the same thing won't happen again tomorrow.

I'm a layer. I take views on how horses will perform and try to lay at the lowest possible price. I have no interest in inside information. Forming my own opinion is part of the pleasure.

Occasionally, I get hit by a well-organised, well-executed coup. It's a hazard of the game. But plenty of gambles go astray too.

It's not the money that motivates me. My profits have gone mostly into mortgage over-payments. I support several charities and am closely involved with local politics. I drive a cheap, second-hand car and take my holidays in Wales. I'd hate to be gambling to fund a lifestyle.

The best analogy I have is probably with a computer game. I want to beat my previous record and accumulate as many points as possible. The profit is a nice bonus - I don't need to fear redundancy; I may be able to retire early - but that's not what drives me.

Trying to stay focused, long-term, can be tricky. It helps that I love horse racing and would happily follow the sport without any vested interest at all. I make sure I take my annual holiday entitlement from Betfair and usually have a long break after a particularly good or bad run.

Experience is great tutor, if only you allow it to be. Instinct tells you to forget all about your bad days, but it's only by analysing your mistakes that you avoid repeating them.

I know other punters make more than me, and I know that I could make more by going full-time or by raising my stakes. But I also know that many more punters make much less, and that some are chronic loss-makers. I often worry where my profit has come from, and whether the person who's lost can afford it.

Gambling is a socially useless activity, and long-term, high-stakes betting can suck the soul from your eyes. You need other things going on, other loves. Success won't satisfy you, but if you're satisfied already the success comes more easily.

Sorry to pontificate like a bad Dalai Lama. There are lots of ways to make profit at gambling, and many approaches will be much better than the one I have. If I make it to £300k, I'll be back to annoy you again.
Dr J averages £75 a day, a decent enough primary income, let alone a second income, and ahead of Mr Median. Several comments on the post are worth a read, notably this one from the always sensible Lori on specialisation:
I won't go through the discipline debate again, we all know where each other stands on that, but the specialisation one is something that fascinates me as I change my mind on a regular basis.

I suspect I'm a bit of a strange case as I almost specialise in not specialising... that is to say that I've become quite adept at knowing where to go with a new idea in pretty much any market as long as it's not too mainstream where I'm up against the specialists. (Soccer match odds for instance)

The upside of doing things how I do is that there's always something to bet on, it's unlikely I'll lose all my edges overnight (Legistlation or other similar nightmares aside) and it keeps me relatively fresh.

The downside is that my edges are much slimmer than they would be otherwise, I have a tendency to work stupid numbers of hours even by gambler standards and obviously there are higher chances that I miss something important.

I also find that I get into position where I feel like I'm last minute cramming all the time. One event ends, another starts. I often forget who won last year's world championship/masters/whatever simply because I haven't had time to retain the most basic of facts.

I think that as a general rule to someone starting out I'd recommend specialising, but I'm quite happy to be jack of all trades, master of none... although as I get a base for many different things, I often try to build on those bases and so one day I might end up being particularly good at one (or more? Can I dream?) specific market.
I can certainly relate to the statement that
I often forget who won last year's world championship/masters/whatever simply because I haven't had time to retain the most basic of facts.
Same for me too. I am often so wrapped up in the minutiae of an event, that the winner or finalists is only of incidental interest, and forgotten soon after as the focus moves to another event. I might remember if Crystal Palace won the FA Cup, (they didn't, did they?) but the days of reeling off every winners of the Derby or the Grand National since 1967 are gone. Too many to remember now! It was a lot easier in 1968...


Mark said...

Hi Cassini

thanks for posting up this fascinating read.

One point that the good doctor raised that really got my attention was when he wrote:

"Naturally, you need discipline to make this game work. But after a while discipline becomes habit."

I find that statement very inspiring because to me it confirms that discipline can be learned just like any other skill.

If discipline becomes a habit then just like any other habit, once it is ingrained it should be relatively easy to maintain.

I believe I read somewhere on your blog where you wrote that you have never been a victim of poor discipline with regard to your gambling, I on the other hand have and there have been times where breaking the cycle of indiscipline seemed impossible, however just as the good doctor wrote I have found that the more I have practised the skill of discipline the more ingrained it becomes.

With regards to the comment by Lori, I for one am trying to get away from rushing from one bet to another as I find that kind of speculation much to stressfull.

I also feel it builds a mindset of 'not wanting to miss out' which can lead to rushed decisions which result in inevitable poor outcomes.

I prefer to take my time and plan my bets/trades in a state of unrushed calm.

I am not saying that is what I do, but it is what I aspire to do.

Anyway thanks again for posting such a thought provoking post.


sj said...

Hi Mark,

Dr J here. Sorry to arrive late to the party. I've only just spotted the thread, and I feel very flattered that Cassini took the trouble to create this blog entry.

I was initially a bit troubled that the 'discipline becomes habit' comment sounded cocky. After all, we're all still vulnerable to that little voice inside our heads: "go on, just one more event", "now's the time to up your stake", etc. However, I do think there's some truth that good discipline becomes habit-forming. After a while, you recognise the danger signs and act accordingly. The trouble is, for many gamblers, it's ill-discipline that becomes habitual, not self-restraint.

I agree 100% about the problems inherent to a 'not wanting to miss out' mindset. It was interesting that many of the responses to my Betfair post wondered why I didn't optimise my profitability by going full-time, raising my stakes or what have you. However, what interested me even more were the posts from other gamblers saying that they consciously chose to remain sub-optimal in order to maintain a better work-life balance and general frame of mind. The latter group seemed to be the ones who'd been around longer...

Good luck with your betting!

Dr J