Buffett On The Premium Charge

Followers of super-investor Warren Buffett will no doubt be aware of his recent comments concerning his willingness to pay more in taxes. His statement that

I have never seen anyone shy away from a sensible investment because of the tax rate on the potential gain

is one that anyone impacted by Betfair’s Premium Charge can probably relate to.

A profitable method is still profitable whether you are paying 5% tax on the profits, 20% or 60%, a fact that I am sure Betfair took into account before implementing, and then tightening, their Premium Charge screw. Whether or not the reduced profits make it worth your while continuing with, will vary from person to person and depend on the time spent to generate the profits. If you have an automated process that takes little to no time and which generates profits, then you accept the change and continue on.

If your method requires you to sit in front of your computer screen for several hours a day, the decision is more complicated, ultimately boiling down to how much is your time worth. For a hobbyist like myself, it’s my leisure hours that are used, (mostly), and any profits are still a bonus even if the bonus is less than it was. For full-timers, or at least full-timers with employable skills, it’s more complicated, and my views on this subject have been aired on several occasions in the past.

Peter Webb wrote a good post on the value of time, triggered by Andy Murray’s Fourth Round match against Donald Young which finally ended on Thursday after being scheduled to start two days earlier.

Almost all of my betting is done on short-term events – a 90 minute football game, a 48 minute (or 40 minute) basketball game or an hour long NFL or NHL game for example. For the most part, the long-term markets don’t suit me. I get restless. I can focus on every play in a ‘short’ event, but asking me to watch all five days of a Test Match or all four or five days of a golf tournament, and I can’t do it. Even five sets of tennis is too much, not helped by the fact that I don’t enjoy tennis as a spectator sport.

The first of the weekend’s seven XX Draw selections was a loser tonight with Augsburg going down 1-4 to Bayer Leverkusen, dropping the 2011 strike rate to 7 from 15 and the ROI for the fledgling 2011-12 season to just 66.3%. Whether the decision to include Augsburg, or indeed any newly promoted teams, in this system so early in the season is a wise one remains to be seen (one winner in Swansea at 3.4, two losers in Dijon and Augsburg to date).

Finally, a great comment / question from Peter Nordsted which I will address tomorrow.

“The best way to appreciate your job is to imagine yourself without one”.