A Talent Of Gamblers

A month to forget on the Stock Exchange. With the FTSE 100 down 10.38% in the past month, and 7.08% down in the past 5 (business) days, no doubt many of us, at least those of us of a certain age, have 'lost' several times the amount that we could tolerate losing on the betting exchanges. The money isn't really 'lost' though, and for those who put aside the same amount each month to invest in shares, the silver lining is that we get more shares for our money - and a higher yield!

Rowan at The Portfolio Investor asked "What's it all about then?" and wrote:

So if us serious gamblers don't really allow ourselves to enjoy what we do too much, and if those of us who work don't rely on the income we hope to generate to live our lives, then just what the heck are we trying to achieve? Are we some form of collective saddos (what would be the collective noun? A sigh of punters? A coven of gamblers?), experimenting in some weird form of masochism?

'Serious gamblers' is a subjective term. Am I a serious gambler or not? I'm not full-time, but the amount of time spent probably justifies being called part-time, except that I have a full-time job which leaves only my leisure-time, so trading is a hobby that happens to be profitable. Banaz commented on Rowan's post that:

For other winning punters not interested in going full time or part time I think a decent goal is to provide a regular secondary income for either “treats” or to supplement their income. A good piece of advice given to me was that if you are not building your bank (or have built it to a level that your stakes are comfortable with) that you should pay yourself a “salary”. I’ve used money in the past to amongst other things – repair the roof of the house, take an extra few days holidays with the family, upgrade my laptops etc. The satisfaction to be able to do this without dipping into salary and savings was immense and is tangible reward for the hard work put in and lets face it there is a serious amount of effort involved here.

I think goal setting is needed in punting just like anything else – this means financial goals and personal goals.

I fit into this category. The extra money is extra income, and allows me to lead a slightly more comfortable life, although as you acquire the money to afford treats, they strangely seem less exciting. New car or pay down the mortgage? Rather boringly, I opt for the latter these days. I am taking a couple of weeks off later this month though, funded by my hobby, and I know what Banaz means when he speaks of that being rather satisfying. I disagree with him on goal setting though. Goals, in the sense of targets, are pointless. The only goal is to maximise your profits, and you do this by betting only when you have an edge, and those opportunities do not come along at regular intervals. Goals lead to betting at poor value.

Paul R of Betting Algorithms fame, had a good comment to sum up that for many, the money is secondary to the thrill of the chase:

I see it as an intellectual exercise. It's an attempt to predict the future in a small way and to have proof that you are able to analyse and predict certain events in a way that others have not yet thought about. We all want to make a pile of cash, but for me that's just a way to keep score.

Rowan gave his own view yesterday, writing

The motivation for my gambling is essentially to generate an additional income at a rate of return that is superior to other, more conventional means of income generation. I have little faith in the capability of my pension, into which I seem to contribute an increasing level of funds each month, to pay for my old age. Nor the second property from which we receive rent but on which we must make a monthly mortgage payment.

While betting income is an income stream, I don't think of it as an alternative to the income I make from work, or shares, or from rent, but an addition. I could take the betting bank and invest it elsewhere, but where else would I get consistent annual returns in excess of 95%? And before anyone asks why I don't do the opposite, i.e. sell my rental house and shares and invest the money in my betting bank, it's simply that this is a hobby and relative to the time I can put in and the somewhat limited opportunities where my edge is available, I keep more than I should ever need in my betting bank as it is.

As for a collective noun for punters, there is already one - well, there is one for gamblers. It is, believe it or not, 'a talent of gamblers'.

The new Bundesliga season starts this weekend, and while the ratings and form from last season do not, necessarily, carry over, they are of some interest. The opening game on Friday night is between Borussia Dortmund and Hamburg, a game that I have priced up at H: 1.55, A: 8.51, D: 4.21 which is close to the current prices of 1.63, 6.5, 4.2 indicating slight value with Dortmund, but this is the Bundesliga where home odds-on favourites are to be opposed. One other home favourite to be opposed this weekend is Werder Bremen (1.92) v Kaiserslautern. Value backs are Koln (2.9) v Wolfsburg, Hannover '96 (2.26) v Hoffenheim, Stuttgart (2.5) v Schalke '04 and Mainz '05 (4.1) v Bayer Leverkusen.

In Ligue 1, also opening this weekend, the best value appears to be in opposing Caen at 2.36, Olympique Marseille at 1.59, Montpellier at 2.24, nouveau riche Paris St Germain at 1.6 and Bordeaux at 1.95. Nice look value at 4.5.

The Strong Draw picks, henceforward known as XX picks,

(a much more snappy name), while unofficial until we get a few more games into the seasons, are Montpellier v Auxerre (3.3) and Nancy v Lille (3.3). I'm leaving the five games involving newly promoted teams alone.