Losted Optimism

As often happens, I thought of a couple more things on my last run that should have been added to earlier posts to make them even more excellent.

The first is on the subject of being a full-time ‘advantage’ gambler. With the long-term goal for many of us being that of accumulating enough wealth to finance retirement, it occurred to me that this might be a lot easier to achieve this while being employed rather than being a full-time trader, or indeed self-employed in any line of work.

Many employed people are able to have their savings deducted from their pay before they even see the money, which studies have shown leads to higher savings. It’s far less painful to save money you never see, than to get paid and then save it.

Most self-employed people do have the requirement to set up companies, and need to be disciplined enough to pay their VAT and other taxes and hopefully are nudged into salting away some of the profits into long-term investments. I can’t say that my personal experience of being self-employed followed this ideal path, but I wasn’t always as smart as I am today.

However, if you are a full-time advantage trader in the sports markets, where taxes are not an issue, at least for now, it would require discipline to withdraw funds and put them away long-term. Arguably if you are disciplined enough to be a successful full-time trader, then this won’t be a problem and I can see that the trader who far exceeds Mr. Median may not have a problem with this, since if he is that successful, his financial future is probably not a concern, but I still think the full-timer who barely makes the money of Mr. Median might well have a problem with pulling out funds for a long-term savings plan.

After writing the above, I found I had a comment from Talkbet on the full-time / part-time subject.

Some great posts and articles recently Cassini, as others have said, you certainly have the makings of a book hidden inside you :o)
As another angle to the full time/part time sports investor [sic] from my point of view I'm somewhere in the middle. I'm not employed by anyone and work as a contractor and have done for 14 years now so therefore have no defined career path to follow. I don't enjoy any full time perks and can fully understand that anyone jumping from a full time job to sports investing full time would need to be 100% seriously sure about what they were doing. My work though means 3 or 6 month stints at different locations and as such does present an ideal opportunity to try my hand at investing full time in between contracts, an ideal scenario for me would be a mixture of both.
Anyway, the sun's shining and it's time to get out and enjoy the weather...

As a former contractor for several years myself, I can identify somewhat with this situation, although my contracting days were pre-Betfair and any gaps between contracts were filled with less interesting activities like finding the next contract, riding my bike, playing golf and drinking beer. I do remember being fairly successful, using small stakes and using bookmakers, with a baseball system one Summer, based solely on a review of past results and my observation that backing underdogs, but not big underdogs, was a profitable proposition.

Which all leads me rather neatly, if I do say so myself, into my second thought, which was that I should publish Peter Nordsted's e-mail sent in reply to my rather sarcastic sneer at Peter's statement that "certain aspects like the pitcher do make a big difference". I'm sure Peter would agree that his thoughts could have been better phrased, but ever the gentleman, Peter rose above it, and gave a very good comment:

May I first congratulate you on your excellent blog it is both informative and entertaining and I always read with interest.

As regards MLB Daily Picks about a year and a half ago I looked at Baseball for my newsletter and found that basically anybody can beat anybody and I found that a simple ratings system showed that backing a home favourite was not profitable. Indeed if anybody would like to view the report they just need email me at nordstpet@aol.co.uk

Last year I found a baseball expert on the Internet ‘Mr Stretch’ (He wishes to remain anonymous) and asked him if he would look at picks everyday.

Last season he returned a profit of around 9 points, which although not bad I felt could be improved. I didn’t feel he was thinking outside the box enough so this season everyday I am sending a list of my ratings and he does the rest because, as previously stated, I know nothing about the game.

However I do know that the home favourites are sometimes ridiculously priced. Indeed if you go through the website and look through the ratings since April 11th when we started putting these out and take all of the teams that are minus in value. If you had layed every one to a 1 point liability you would now be 6.78 points up. And in truth I don’t really see this changing.

I freely admit to not knowing anything about the sport but I do know professional sport is difficult to win and the value is nearly always in opposing the short priced favourite.

We will carry on this experiment throughout this season and Mr Stretch will make the selections from the ratings presented but please keep an eye on the selections with the minus figures it would not surprise me to see them yield a healthy return by straight laying them on the exchanges

The key sentence here is "I do know professional sport is difficult to win and the value is nearly always in opposing the short priced favourite", something that is true in many sports, and not just baseball.

People like to back back winners, not value.

As Peter says though, this is especially useful in baseball where teams are a lot closer, and while backing 'dogs can lead to long losing streaks in many sports before that big winner comes in, when it comes to baseball losing runs tend to be shorter.

Incidentally, Pete had a good weekend with his Drawmaster picks, finding Wolves v Fulham (as did I), and Aston Villa v Stoke City (as did I not) from his three selections.

Next up, O'Dwyer still can't accept that he has no edge and move on.

It's been a disappointing weekend. In order to trade successfully, you need a clear head with no pressure. Unfortunately, the reason why I've been failing is I don't have the mindset I had last year. This time last year with Roland Garros approaching I had over £4k in my account which I managed to build from £500 in February 2010. Back then I did not owe anyone money and there was no added pressure of knowing that if I had a bad few days, it would not have that much of an impact.

So much for betting only with money that you can afford to lose. I do think he has a point concerning mindset though. "Scared money never wins". Knowing you can't afford to lose leads to poor decisions to say the least, but without an edge, a topic that John never mentions, and his money is as good as already lost. His inability to accept reality is further evidenced with this:

Overall, we're almost at May and I've still not had any real improvement this year. I'm worse off than where I was in January. There's no point lying about things, it's not a good position. However, I'm confident things will improve significantly, so let's see what happens in the coming months.

Nothing wrong with being an optimist, I used to be one myself, but it seems to me that his optimism is completely unfounded.

Losted optimism you could call it.