Wednesday 30 November 2011

Ebb And Flow

A couple of comments along the same lines concerning the Lay The Draw picks I mentioned at the weekend. Steven (of the new Betting Crunch blog) wrote:

Considering draws are meant to be few and far between, that lay the draw guy seems to have a good strike rate for finding draws!
while Cloppa took the observation a step further by suggesting that I
could include the FTS selections in your Friendly Tipster League as backing the draw?
That's actually a decent idea, and lest anyone find this idea a little disrespectful to Ian, the Lay The Draw strategy is one where the position is closed during the match rather than allowed to run to expiration, which is the purpose for which I shall be using the picks.

Here's the updated table with Backing the Lay The Draw bets included:
As I noted on Sunday, Football Elite's Recommended Bets have dipped into negative territory during the weekend, an event that resulted in an increase in negative e-mails to Matt, who runs the service. Matt accompanied his Monday Update e-mail with some observations which, while less illuminating than the much anticipated commentary that accompanies Warren Buffett's annual Letter to Shareholders, was perhaps of more interest to me than most as I feel my way into the world of subscriptions and the responsibility that goes with it.

Matt has way more experience than I do in this realm, and we have both similarities and differences. For a start, I make it clear that the selections are not tips. The selections are not from a tipster but from the spreadsheet. There is no subjective element to the selections; the matches either qualify or the don't. Matt on the other hand favours a more subjective approach, the basis of which isn't for me to reveal.

My selections are draws, Matt's are Home winners and for both of us it is true that our selections will lose more often than they win. Draws are in the 3.45/3.5 range, and Matt's home selections are rarely at odds-on, so the long losing run goes with the territory. I caution in my 'prospectus' that
Backing draws is not for those looking for a quick buck. Draws are hard to predict, which is why the average price is around 3.47 (implied probability slightly below 29%). This means long losing runs are inevitable. For example, March 2011 had just one winner from ten selections, and there was a losing run of 16 matches early in 2011-12. On the other hand, the occasional round of matches comes along where only a 90th minute goal comes between a five for five (500-1 odds) outcome, such as September 24-25, 2011.
I'm not sure if Matt runs his service as a full-time enterprise or not, but one big difference I see (other than Matt probably has about 500 times as many subscribers as me!) is that if the XX Draw Selections are not profitable, I offer a money back guarantee. Not a FULL money back guarantee mind, since there has still been some effort expended on my part, but a percentage, with the amount of the percentage increasing the worse the results are. I hope never to be in this position, but since the service is a sideline and I'm not doing it for the money, I really would feel rather bad if subscribers lost money over the course of a season, and including a partial refund qualifier goes some way to making me feeling a little more comfortable about any losses. Subscribers can also opt out at any point too, an option I have no qualms about offering, and if I hit another run of 16 consecutive losers, as is to be fully expected, no doubt I will receive my share of abuse and requests for refunds.

In finance, when someone buys shares in a company (possibly on the recommendation of a broker), the usual scenario is for the investor to make a one-time lump sum investment, and for the shares to be held for some time. It's different with a service such as Football Elite where the investment is made in dribs and drabs over 38 rounds, and the investor is very much influenced, not so much by how the returns have been over the previous year, three years or whatever, but by what transpired the previous round. Gamblers have short memories. If the service consistently produces a positive ROI over the season and you still have confidence in it, keep making the investment. If you have lost confidence in a service, then stop investing. A share price does not climb steadily by 1p a day and an ROI of 10% does not mean you will make 10% on every bet. It means that over 38 rounds, you will, on average, get £110 back for every £100 you invest. On average. Some weeks you lose 100%, while on other weeks you will make several times your investment. As with trying to time investing in the stock market, unless you consider that the investment is no longer solid, the best approach is to invest consistently. However, while in finance if the fundamentals of a company are still strong, the advice is often to buy more on a dip (Unit Cost Averaging), this isn't recommended in betting. All ships go lower on an ebb tide, but a company or service holed below the waterline won't rise with the flow.

Part Two of my interview with The Sultan has received rave reviews - James said:
What a fantastic interview, some very good answers from Cassini there and a big thanks for doing this. Definitely some food for thought for me.
Geoff had this to say:
Superb interview, blog as always a good read but recently you have really taken it to another level.
And Abu needs to get out more...
Hi Sultan. I've really enjoyed reading this post. I've read it 3 times now! I really need to get a life! There are some very good points that are helpful for a newbie like me. Especially the one about value when closing a trade. Its something which I am thinking about looking into.


Mark James said...

Hi Cassini would you consider adding me to your Friendly Tipster League? I have been proofing, by email, to this site - for 10 months though the online version only covers this season's 45 selections (21.50% ROI)in all I've proofed 87 selections at an ROI of 26.67%. If you would be happy to add me I can provide simple s/s with all results on (rather than trawling through all the posts).

Keep up the good work

Many thanks

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George said...

Hi. I looked at your XX Draws prospectus. Very well written. Good idea with the partial fee refund! I got a bit confused b/n your all-time projected historical and your 2011 actual historical results, but having reread it is sort of clear now. If I understand your mechanics correctly, you are using the lay side of the market and are factoring no commission. Correct me if I am wrong, please. A more conservative estimate of this well performing strategy would based on the back side of the odds (0.05 lower) and will be adjusting for commission. Adjusting your avg odds to 3.43 and assuming 5% commission on your winnings (using your 35% strike rate), I arrive at ROI of 15.8%=0.35*0.95*(3.43-1)+0.65*(-1). I am not saying that this is what should be in the prospectus, but it just helps describe the range of historical outcomes better, depending on how conservative one wants to be with the assumptions.