Responsibility And Reality

While it was perhaps an exaggeration to say that I ‘craved’ answers for questions I have previously posed to John O’Dwyer, I was definitely interested when I read on Saturday that he was to be the Sultan’s next interview subject over at the ever improving Center Court Trading blog. The unanswered questions that I have previously asked John were all essentially around his ‘edge’ and his obsession with size when it comes to his bank. John seems to think that a big bank IS his edge, but I am not buying into that for one minute.

I know from personal experience that you do not need a large bank to succeed in trading. To make money, you need either an edge or a run of good luck, and runs of good luck are just that – runs – and runs based on luck, both good and bad, come to an end sooner or later. It is my opinion and that of at least some others, that John had a run of good luck, which ultimately ran out after about seven months. John’s problem, as I see it, is that he refuses to accept this reality, and still to this day thinks his winning days were not down to luck, but were down to an edge that apparently only exists when the bank size is above a certain level.

Anyway, I wanted to pick out a few of the questions asked of John, and comment on his answers, not because I have anything against John, but because I think that represents a lot of people out there.

Q How would you describe your style? Would it be fair to say you are a gambler rather than a trader?

A I am very much cautious once I have stability, although this year I've been trying to build my bank through gambling and that involves taking more risks. Not the way I prefer, although I've had no option but to go this route. Something I'm hoping will change ASAP.

Here we go again with the ‘stability’ thing which makes no sense. The way you get from £100 to £1,000 is the same way you get from £1,000 to £10,000, from £10,000 to £100,000 and so on. Where is the logic in believing that an edge only kicks in when you have a certain bank size? It’s nonsense, as his assertion that “I've had no option but to go this route. Something I'm hoping will change ASAP.” No option? How do the majority of self-made millionaires make their money – from winning the lottery or from building up slowly and steadily? Yes, people do win the lottery, but I hope that not too many people are relying on this in life. As for John hoping this ‘having no option’ will change, it’s all down to him. He makes it sound like he is the victim of circumstances beyond his control. Take responsibility.

I had quite a bit of success in 2010 which started from £500 in February that year. Trading is the only real way forward although I sometimes like the odd gamble when I'm confident of how things will go. Where I've gone wrong this year is I've not had the bank size that was available to me last year, so I've been trying to gamble my way forward and it's not really worked.

Where John has gone wrong, is in thinking that bank size matters, and in trying to gamble his way out of the doldrums. It’s not a surprise that this approach has “not really worked”.

Q You seem to bet on a lot of different sports. Most experienced gamblers / traders, will say that you should specialise in 1 or 2 sports. What would you say to that?

A I will cut down on one or two once I get the bank size and stability I need. Although this was how I was successful initially so there will not be any major changes. I'm comfortable trading on most sports.

A look at John’s blog will show you the diverse events that John involves himself in. In the opening nine days of May for example, John bet on Australian Rules, Baseball, Basketball, Boxing, Cricket, Horse-Racing, Golf, Snooker, Football, Tennis, Rugby League and Rugby Union.

John does at least recognise the need for an edge when he says “I want to avoid the likes of horse racing as I feel I have no edge or knowledge and will never compete with those who have access to the result before I do.” Horse-racing? Hang on a moment, didn't he... well, that was back in May. Maybe lessons are slowly being learned. The truth is that many sports John trades or bets on are ones where he is unlikely to have an edge.

Q Many people have commented that they think you don't have an edge and that you hit a good spell but now things have evened out with a bad spell. What is your response to that?

A I've not had 1k+ in my account since March, and that's how I was successful initially. Big bank brings stability and confidence and because I'm using a small bank, it's making things difficult. The last 7 months have been unacceptable, but outside matters have not helped my situation as well.

John’s mention of ‘outside matters’ is more support for my assertion that to be successful, you need to be in the right frame of mind, and not have other issues in your life. An unsettled emotional state leads to distraction, mood swings and poor decisions. And anyway, what is a ‘big bank’ that will bring stability? It is a relative term for a start, (when I started, £500 was a big bank for me, then £1,000, but a bank that size today I would consider small [for me]) but whatever your bank size, if you have ‘outside issues’ or no edge, you will lose a ‘big bank’ just as easily as you will lose a ‘small bank’. Besides, John himself essentially admits this is nonsense when he says

“That's just a figure as an example. £1k isn't going to magically mean that I will start to make thousands again. I just need a big enough bank to get going again, as once I do, I'm quite confident I can do as well as I did in 2010.”

Quite confident based on what? Not anything resembling reality, so far as I can see.

Q How did you get started on Betfair and how long was it before you were making big profit?

A 2010 was the year I finally discovered how to make it pay.

Or was 2010 a year when he got lucky? I would suggest that if this really was a breakthrough year, the year John ‘discovered’ how to make it pay, then 2011 would have seen similar results.

Q You are a full-time sports bettor. What mistakes have you made and what advice would you give to anyone thinking about going full-time?

Someone who is unemployed and passes the time gambling is not my definition of a full-time sports bettor, but the Sultan is more polite than me. John then gives some ‘advice’ that is totally wrong. He says

“Always trade out of bets (unless you are doing it for fun) even when you think it's 100% certain, trade out anyway, it's amazing how many times I've thought a bet can't lose only for it to get beat at really short odds 20 minutes later. Trade out of everything, and don't get greedy. You will win that way”.

Very poor advice. You trade out of a position only if it is value to do so, not simply because you can. If you think something is 100% certain, why would you trade out at any price and give someone else value (assuming you staked appropriately in the first place, an issue discussed in this blog before, and yes, there are rare exceptions to this rule). If you think something has a probability of .5, would you trade out at a price of 3.0 (implied probability .33)? Hopefully no – because you are giving away value if you do.

And finally, there was this question: Have you been hit by the Premium Charge and how do you feel about it?

John’s answer:

I've never been hit with that. Not sure why.

Not sure why.