Forum Rename

Back in March 2004, upon joining Betfair, I created a Forum name, a rather lame one in hindsight, but when I went to change it, I was told this was not possible. At long last Betfair have added this feature, and you will not be surprised to read that my rare posts there are now under the Cassini name. Any hopes I had that the forum might be a source of inspiration were soon dashed, but I do occasionally check in, and even more rarely, add my thoughts. The latest subject to catch my eye is the evergreen Slicer's Bet, still being discussed it  appears, encouraged by the admittedly charismatic 'Dr. Slicer' himself. I often check to see what search terms result in hits on this blog, and it's rather sad to see how often 'slicer' or 'holy grail' are searched for. When you title a post ...Slicer's Holy Grail found it's not surprising that people end up here. I hope they aren't too disillusioned.

I may have spoken a little too soon about July being a poor month. The last week of the month often offers value opportunities for some strange reason, (just kidding, value is value whatever the date), and I found a couple of rather decent wins on last night's baseball, if I do say so myself. And it's about time. The Oakland Athletics selection is still in doubt as I write this, tied 3-3 with the Tampa Bay Rays (top of the 15th) but the Los Angeles Angels of Anaheim and the Arizona Diamondbacks came through winning on both handicaps (+1.5,-1.5) as well as Match Odds. Barring a disaster on day 31, this may yet be one of the better summer months of recent years. The wins also means that my balance finally saw a new high again, after 105 days of trying to recover from my usual April disaster.

For those of you XX Draw Subscribers concerned you have missed anything, you haven't. The selections for opening weekend in Ligue 1 will be emailed along with the password for the XX Draw Selections page just as soon as the kick-off dates are confirmed. Betfair have yet to list the markets.

Breaking Away

Little Al wonders and writes:

I'm very surprised Mark takes his foot off the pedal at certain times of the month. Some people might say you are being harsh to point it out, but it's quite a valid point.

I'm no expert, but it doesn't make sense to not dive in if there is an opportunity unless you want to have a few days rest which always makes sense especially if you have been hard at it all month.

Most of my losses have been caused by tiredness/lack of concentration or over doing it. You can't beat a fresh mind ready to green up.

I have absolutely no problem with anyone taking a break from trading, but to get the most benefit, it should be a complete break, and ideally timed for days when your markets of choice offer little in the way of likely value opportunities, and days when you need a break, rather than every final week of a month regardless of the season.

And it's not really taking a break when you are still sat in front of your TV and Betfair screen, even if you are in "third gear". If you're at work so to speak, you might as well do the best you can while you are there. At least, that's what my boss tells me! Taking a break for me means no trading, something that July is perfect for. 13 days have seen no action at all from me, and the rest of the month has seen far more punting than trading. This will be the smallest profitable month since.... well, last July. (April was its usual disaster with a four figure loss). July remains ranked 11th, and that seems unlikely to change any time soon, unless the sporting calendar undergoes a major overhaul.

I've learned to enjoy the quiet time of year. I can see why some people need a break from trading, but personally, I find it quite exciting and enjoy the challenge. Certainly there are days when I get tired, but there's no shame in hanging up the keyboard early on those days, and coming back fresh the next, but during my 'peak' season of Autumn and Winter, days when I don't trade at all are rare birds. Looking back at last year, I had one day off from September to the end of March, when we headed to Hawaii. I guess I deserved that trip  more than I thought.

For the record, it wasn't actually me who pointed out that Mark eases up at the end of nearly every month (still waiting to hear which months this doesn't happen) - it was Mark's own Tweet which pointed this out. I was surprised too when I saw it, since this seemed to me unprofessional, yet it was coming from a respected professional, and I merely questioned the logic of this approach.

Qualifying Statement

BigAl had a comment on my statement that "In betting, the goal for a professional should be to win as much as possible in the time available" which was "That statement needs an awful lot of qualifying."

I shall try. I have to choose my words carefully when BigAl is around. Which is a lot.

What I meant by that statement was really that those of us who make money from the exchanges should be making hay while the sun shines, because they may not be around forever, and for anyone who does this professionally, (or at least someone for whom this is their main source of income), this is even more essential.

Betting for a living is unlike many other professions where the goal is not necessarily to maximise income, but about putting in the groundwork and establishing yourself for a significantly more lucrative future.

As we have seen with the various stages of the Premium Charge, the goalposts can move very quickly, so my point was that current opportunities should be taken advantage of at all times. Specifically to the debate with Mark Iverson, I don't think it makes any sense for anyone to coast 23% of the time, least of all a professional.

Betfair may well reduce the Premium Charge threshold at some point in the future. It may sound like a high figure right now (it's not when you think in terms of median incomes over 10 years or so) and it may well be a lot lower soon. Not to mention the possibility of a ban on in-play betting or even the closing of profitable accounts. Any of these changes would be an irritation to most of us, admittedly a big irritation, but with a first job, life goes on. With all your eggs in the Betfair basket, and other baskets have yet to prove viable, it would be a lot more serious, which is why taking your foot off the pedal is a poor strategy. 

And speaking of the debate, I am still puzzled by Mark's last Tweet on the subject, above. The fear and greed that brings about Mark's change in strategy / approach / mindset in the last week of a month doesn't happen every month apparently, only 'often'. In which months, or under what conditions, his performance remains unaffected is yet to be revealed, but if Mark can identify the reasons why he is able to trade optimally during these occasional months, he is on the way to being able to do this every month.

Managing fear and greed, or anything in fact, is about more than just making yourself aware of it. Managing a situation is about taking action, not about increasing awareness. Managing your weight, for example, doesn't mean getting on the scales four times a day - it means taking in less calories than you are burning (assuming you want to lose weight of course!) Being aware of a problem is important, but only a first step.   

Insert Winner Here

There's been a lot of whining about the Men's Cycling Road Race event today, with Betfair not listing the winner Alexander Vinokourov until the last few minutes of the race. With no "Any Other" selection listed, Betfair specifically stated in the rules that "others would be added on request". I guess not many people expected this to happen so late in the day and missed it, with only £7k out of a total just over £1million being matched on the winner. A small profit for the sharp mind who spotted this, and requested Vinokourov's addition, but there was not much money to be made. Fortunately lays were unaffected, including my lay of Mark Cavendish, but the ethics of adding a name at the death like this are questionable. Unlike the Next Manager markets where in theory, any one in the world could be a winner, and it is thus impossible for Betfair to include every possible winner, the winner in this road race was one of 145 competitors, and it shouldn't have been too hard for Betfair to list them all.

Betfair's Update: We created the Men’s Olympics Cycling Road Race market on 20th July from the official London 2012 website, which at that point did not show Alexandre Vinokourov as a listed competitor. The market remained ‘incomplete’ allowing us to add any further runners on request. We did not receive any requests for Vinokourov to be added, but when it became apparent that he was in a two-man breakaway group towards the latter stages of the race, we added him into the market (approximately 5km from the finish).

Opening Thoughts

When I wrote yesterday that it was time to watch my brother-in-law's oak tree (realistic enough that the usually thorough Sun - and others - thought it was real) take centre stage in the opening ceremony, I didn't actually realise the prominent position it would have. Even my Mum will have tired of pointing out to my Dad "Look John, there's Simon's tree". At least, I hope so. I'm not usually a big fan of opening ceremonies, nor of royalty, but this one was a lot better than most, with the Queenie / James Bond / helicopter piece very funny indeed. We are amused. The show was a little political, (Hands off the NHS, Doreen Lawrence, CND) but I personally had no complaint with that. The significance of many moments would have been missed by many non-Brits, and even by some Brits it seems. The scene from Kes was brief, and anyone much younger than me is likely to have missed it. How many realised the top hats represented Isambard Kingdom Brunel? The lighting of the cauldron by the next generation was perfectly in sync with the winning bid's promise to leave a lasting legacy, a point that seems to have been missed by some. All in all, it worked very well, although the finish was a bit weak in my opinion. It was a bad night for cynics, that's for sure.

The road race currently in progress is around my old stomping grounds in Surrey. I know Dorking and Box Hill very well. In fact, were it not for the camp grounds atop Box Hill, you would not be reading this - my parents met there one summer weekend in 1954! Man, they are getting old.

A Gold for Mark Cavendish would be a great start for GBR, and no one can beat him if it comes down to the likely sprint finish, although the breakaway has a 9+ minute lead right now. Trading in the 1.4s, Cavendish will start drifting if the gap doesn't close soon.

Race Pace

In response to a query on Kelly staking, Al asked: 

Thanks Cass, i may look to transition onto that in the future to maximise profits.Do you know how you can measure your "edge" so to speak?

Currently i am just making calendar monthly totals and not really looking at ROI.

I will move on to a rolling weekly, monthly total as i think thats a good way to record totals - but how do you get meaning out of these figures if say you trade maybe 3 days one week and 1 the next? thanks.

If I knew how to measure my edge, I would be a multi-millionaire by now! The best we can do in sports betting is come up with a reasonable estimate based on previous results, but the imprecise nature of this estimate is precisely why full Kelly isn't practical for sports.

Making calendar monthly totals is a distraction. The recent debate between Mark Iverson and myself both on here and on Twitter will show, if you read the comments, that all agree with this. Even Mark, although he continues to try to justify his folly by saying that it 'works for him'. It makes far more sense to find a winning approach and stick with it, than to change gears every three weeks or so. From the world of track cycling, a look at the best way to complete the one hour competition is revealing. In this event, the idea is to cover the furthest distance in one hour. In betting, the goal for a professional should be to win as much as possible in the time available.

In cycling, one school of thought is to get up to the speed you can maintain for the duration, and maintain it. Another is to start easier and build achieving what is known as the negative split. There is no school of thought that says you should slow down three-quarters of the way around the track on every lap, pat yourself on the back because you are still moving forward, and then speed up again.

Rather confusingly, Mark's latest Tweet on the subject states that he does not apply this change in strategy every month, only 'often', so it will be interesting to hear which months are exempt, and whether the profits in the last week of these months exceed those in the months where Mark drops out of top gear.

Back to Al, and as far as using rolling averages in the event that you don't trade every day, simply use moving averages per 'action day' (or even 'per event') rather than per 'calendar day'. You may also want to break these down by sport. For myself, the summer is always a quiet time of year, with my major sports being winter ones - football, NBA basketball, and NFL with the summer sports being very much fringe activities. Six of my top seven months fall between October and March, but I don't stress over this fact.

ROI is important, but it is not all-important. More important is ROBG as explained here or more fully here.

Right, time to watch my brother-in-law's tree take centre stage in the opening ceremony.

84 Wasted Days

The verdict is in. Cassini is correct - there should be no difference in approach, strategy or mindset whether the date is the 1st of the month, the 10th or the 25th.

Note the words 'should be'. As my end quote yesterday suggested, and others have mentioned in their comments or posts, in practice it is not always easy to trade optimally. The Sultan quite rightly mentioned in his lengthy post on this debate that I myself have admitted to acting in a less than optimal manner on occasion, when a poor run has seen profits taken a little sooner than they might have been had I been on a good run. Confidence can be fragile for us humans.

Nevertheless, it does surprise me that a 'professional trader' would be so negatively influenced by a date still seven days away. Over a year, this is 84 days where, by his own admission, his focus on an arbitrary date is costing him money. This amounts to 23% of the time, which to my mind is a lot of lost profits.

And there's also the question raised by BigAl of what influence an approaching month-end has in the situation where Mark is showing a loss. Marks answer is that: Normally I would become tighter and reduce risk, but would evaluate the situation individually based on the event. Seems like the same adjustment is made whether in profit or in arrears, but no adjustment should be made in either situation. And surely it goes without saying that all events are evaluated individually?

The approach should always be to keep calm and carry on. It seems to me that a change in approach, strategy, mindset twelve times a year, is a breach of the 'discipline' rule which is generally accepted as being an essential ingredient for successful trading.

But what does 'successful trading' mean? Successful is a relative term. Is success making a small profit every month, or is success maximising profitable opportunities? Mark is successful in that he consistently reports a profit, but his 'success' is somewhat diminished by his unwillingness or inability to maintain his discipline every day. In his own words "I have different gears and towards the end of month prefer to stay in 3rd or 4th rather than 5th." He is thus more comfortable recording twelve small profits and no losses than having a mix of profits and losses which total more than the twelve smaller profits. It makes no sense. Mark claims that "Aiming for growth month on month over the last 6 years has allowed me to grow, improve my key stats and become more profitable" which might be true for the first few months, but after 6 years my feeling is that confidence should be high enough to be able to weather the occasional losing month while being rewarded with larger wins overall.

This is not a disciplined approach, which one might expect from a confident trader as BigAl says, and as a full-time trader, one might expect that maximising profits would be of even more importance that to the part-time player. At some point, Mark will realise the folly of this approach, and he should be thankful that he doesn't record his profits on a weekly basis. Easing up with 7 days to go in the week would not be good!

BigAl goes on the attack with: Bloody hell, never been in more agreement with Cassini. Which I would have expected to be about as likely as Mark Iversen 'fessing up to losing on a cricket match.
I do smile when I see these guys who set themselves up and present themselves as such know-it-alls spout such crap.

I suspect he is including me as one of 'these guys' but that's his prerogative - I'm still in shock that BigAl agrees with me on something!

Scott Ferguson's take on it all is: If we all had exactly the same strategy, life and betting/gambling/trading would be very tedious. People have different mindsets. Who cares what is right and whether I/Mark/Cassini make £2 more than the next guy? If my methods and profits make me happy in my lifestyle, then the rest of the world can go twiddle their thumbs for all I care :)

The thing is that it's not a debate about who makes more - Mark is full-time, while I am not - but it's about whether or not it makes sense to have a different approach / strategy / mindset during the last week of a calendar month.

I think inexperienced traders have a tendency to obsess over short-term targets, but it's something most soon grow out of, at least if we wish to make the most of opportunities. What helped me to overcome this was maintaining moving averages - I keep 10-day, 30-day, annual and all-time moving averages and so there is no 'final lap' as Mark calls it on any date. As Matt said, the 'final lap' is when you are approaching retirement; it is not twelve times a year. It's not really the final lap when a new one begins on the 1st! 

Does the fact that Mark is full-time make a difference to his approach? It shouldn't. With six years of profits, one would expect that Mark has a large enough cushion to handle two or three successive losing months, so his decisions should be made free of the fear of losing. If this is not the case, then as I have argued previously in the full-time v part-time debate, this 'need' to make profits leads to poor decision making - taking profits too early for example, or under-staking. If Mark reaches a monthly total that covers his bills and a little extra for luxuries, then this is another example of how targets work against you.

But we are not all the same. Some of you might remember that for some bizarre reason, Mark includes share trading profits / losses in his monthly betting figures, which even Mark agreed back in March makes no sense.

Mark's comment that "Despite what you think, it works for me and I would very much recommend others adopt the same approach" is poor advice. If confidence is that fragile, then I can't argue that Mark should take the optimal approach at all times, but it's poor advice to pass on to others. There is nothing in the Kelly criterion that says "....unless the date is within seven days of month end".

Speaking of Kelly, The Golf Bettor wrote a long and excellent comment worthy of a wider audience, and I shall conclude this post with it in full (italics mine):

This debate is almost as fascinating as the Deal or No Deal conundrum. As a former odds compiler one of the highlights of the day was to scream abuse at the contestants on Deal or No Deal as one by one they succumbed to terribly poor value at the hands of the banker. Can you not calculate that you are being offered significantly less than the true value of your box we cried. How we booed when the old lady took the money early because she needed to repair her roof before the winter. There lied the conundrum, every player had a different interpretation of what a life changing amount of money was. Each player had a different opportunity cost attached to their decisions in the game. One wonders what Mr Iverson's opportunity costs are when he trades now. Does he trade in a world where confidence is of paramount importance and the opportunity cost of applying strict value principles at all times is that he risks the possibility of a nerve shattering loss? Or is he an autistic automaton able to maximize his profits or minimise his losses with perfect mathematical precision. We are not privy to the inner workings of Mark's brain and we do not know what images flash before his eyes when he is putting his family's income on the line every day. One thing is for sure is that he does not have the luxury of trading say an investments bank's money where one can become a sociopath devoid of empathy. From my experience working in the financial markets I used to hear two "pearls" of wisdom everyday: "Take your losses early and run your profits" and "No one went skint taking a profit". One requires iron discipline the other was designed to keep under performing traders sane and alleviate the pressure on them. Mark will be constantly calculating his own opportunity cost for every trade along with the mathematical probabilities and no doubt hoping they align on every trade. If at any point they don't he is presented with a choice, ram the odds down the banker's throat or pay for the new roof. What is the exchange rate of utils to hard currency, happiness versus cash. When trading does happiness matter? Does cash make you happy? We understand trading in terms of maximising profit and yet in Mark's case it is his job and jobs are part of our lives and living should be about maximising happiness. Those with full time jobs trading part time do not have the same opportunity costs as those trading for a living and yet if it is your sole revenue stream should you not maximise it? Equally fascinating is when decent punters trial Kelly staking but are unable to come to terms with the swings despite the undoubted benefits. Maybe if you are still making sufficient money to satisfy your needs/desires with level stakes betting and you are too discomforted my Kelly staking you will have to attribute a cost to that discomfort, what price Kelly? Why not use half Kelly or quarter Kelly I hear you cry. Well I have met punters over the years who have successfully made money for long periods of time and are still uncomfortable risking more on the bigger value bet and less on the smaller value bet. The debate on Kelly if indeed there is one should surround how accurately sporting outcomes can be calculated and for which sports as a consequence is it truly applicable so maybe save that for another time. Ultimately I hope Mark has attributed a value to the change in mentality of his trading at any given time and done the maths accordingly.

Incidentally, blogger appears not to allow the "/blog/blog/" when I add Mark's new link to my blog roll - possibly thinking it's an error, it automatically removes one of the /blogs resulting in the old link being entered. 

Cassini v Iverson

It's likely that a few of you reading this will have predicted the theme of the post. If you follow me on Twitter, and who doesn't?, you will have caught an exchange between myself and professional sports analyst Mark Iverson who prompted the debate by tweeting "Feel like I'm reading this match well so far. No need to push it coming up to the end of the month mind." I questioned "Why should strategy differ on the 25th of the month versus the 1st? #illogical" because to my mind, it is indeed totally illogical to adjust your approach / attitude / strategy / mindset or whatever, simply because the end of an arbitrary period of time is approaching (and with six full days to go before the end of the month, even that is debatable).

Mark claimed rather vaguely that "Strategy doesn't change but mindset does". I pointed out that "no need to push it coming up to the end of the month" implies that the approach is different on 25/7 than it would be on 1/7 to which Mark said "Approach yes but not strategy".

My opinion is that whether you call it approach, mindset or strategy, the point of the debate is that none of those should change because of the date.

Mark's next comment was way off base, trying to make his point with an example: "if you were winning a Grand Prix by 30 secs, would you go into each corner on the final lap at full throttle?"

Well, most of you will spot the problem with this statement immediately, and I responded with "False analogy. There is no bonus in winning a GP by 1 second or 1hr, but a big difference between wins of 1p or one of £1k."

Similarly, the argument that "It's like saying Alex Ferguson always tells his team to try and score a goal" is irrelevant. A win in football means three points, or moving into the next round. It is rare that the margin of victory makes much difference, and teams play accordingly.

Mark added: The point of the analogy was that when you're well ahead why risk the wheel falling off?

Because unlike in motor racing where it makes sense to win as safely as possible, in betting - as in time trials - the idea is to do the best you can. The idea is to maximise your wins. Make hay while the sun shines.

Mark claimed that "It's all about what type of variance you're comfortable with. Everyone has different comfort levels" - but the fact is that this debate was nothing to do with variance - it was all about acting differently on the 25th of a month to the 1st of a month.

Matt of punt.com fame joined in, on my side of course, or I wouldn't have mentioned it, pointing out that:

"the date is meaningless imo. If you need target, try retirement day, otherwise, date is just a random point. The sporting calendar has peaks and troughs..timeline of betting decisions should be linear. Picking a point on a very long line, pointless."

Exactly. Forget the date, forget daily, weekly, monthly, quarterly or annual targets. They lead to poor decision making - betting at poor value and chasing. Value is value whether it is there on a Monday morning on New Year's Day or a Sunday night on New Year's Eve. Keeping records is essential, but allowing your betting decisions to be influenced by the date or time is not taking a professional approach, although I appreciate that, as Yogi Berra said:

 "In theory, there is no difference between theory and practice. In practice there is".

The Lonely Pokémon

For some time now, one of the best reads on my blogroll is Don Butler's Cubone - The Gambling Historian! The author is currently away for a 'serious procedure', for which we wish him the best, and I found this article about Don posted on the Betfair Forum by a Buzzer. Not sure where it came from, but it might be of interest to some of you who are familiar with Don and his tales. At the very least check out his Golden Rules at the end - four of the five make for good advice. Don recently lost his son, named Rhett no less, and by all accounts a much respected teacher, to pancreatic cancer at the young age of 38. Read this post here next time you think that losing a bet is important.

Don Butler had a colourful life in bookmaking - a parade of dolly birds, celebrities and PR stunts made him a legend of the racecourses. Here, he recounts his best tales to Dave Fowler, and explains why he now looks to the internet to make his fortune.

Don Butler was born to be a bookie. His earliest memory, from the late 1930s, was his father, a tic-tac in a successful Midland bookmaking team, emptying the 'odd' (the cash box) on to the lounge floor after a day's racing. Young Don would then sort through knee-high piles of banknotes and coins, revelling in the sheer delight of hard cash.

If that wasn't enough to instill a love of bookie's booty, he also knew his father kept a £37,000 float on top of the wardrobe. In an age when the average house cost a few hundred quid, that was like having a couple of million in your sock drawer.

You might conclude that Don was a lucky kid. You'd be right. Up to a point, that is, because after the war, the Butler family money started to slip away, and not just the fiver Don lost on his first wager, Logh Conn at 33/1 in the 1947 Grand National.

Down and out

Massive financial problems kicked in when Butler senior graduated from tic-tac to bookmaker and, granting unrestrained credit to all, allowed the business to slide so fast that by Christmas 1948 Don couldn't have that shiny, new bicycle. What he got instead was an enforced relocation to Birmingham's red-light district, where the family lived in a basement with an aunt while Dad drank himself into the ground. It was Year Zero, Butler style.

'Well, on the bright side, there were plenty of birds down there and some of them were really lovely!' laughs the ever-optimistic Don during our meeting in Birmingham's Albany Hotel. 'But those were dark days. I eventually got a Subbuteo kit with Birmingham and Villa for Christmas, but my Mum couldn't afford a ball. Imagine how I felt with every match ending in a draw!'

Don soon got his first job, running illegal bets, or 'nuggets', between pubs, and avoiding the law. Next, the Bookmakers' Association suspended his father for 'snowballing' (not having the funds to pay out and offering extended odds on the next race) at Warwick. Don then endured National Service, where at least running the camp's book was a temporary distraction. Back on civvy street, he hooked up with family friend and local bookmaking legend Sammy Nixon, who fast became a surrogate father.

'Sam tried to instill in me the importance of saving for a house and family,' laughs Don, 'but this was the 1960s and I was up for having the time of my life. As well as working for Sam, I was putting on bets for pro punters. They paid me 2% for getting the bet on and I got up to 10% commission from the bookies. I was Sam's eyes and ears on the course and got a feel for where the smart money was going.'

Girls and big tips

Don was now one of the snappiest dressers on the racing circuit, renowned for his endless supply of dolly birds, patter and hot tips. He was a regular at Birmingham's Cedar club, on first name terms with Mandy Rice Davies, Christine Keeler and George Best, and even rubbed shoulders with the Beatles. London bookie bigshots Neville Berry and Ted Binns were so impressed with his female coterie they invited him and some of his 'hairdressing lady-friends' for a champagne party at Chester's prestigious Plantation Club. Neville and Ted came out smiling, and so did Don. Never mind the sideline in pimping - he'd tasted the good life, and it was irresistibly delicious.

'People always ask if I've met stars, and I have,' laughs dapper Don. 'I met three racing stars in particular: Gordon Richards, Freddie Winter and Lester Piggott. I was a skint 18 year-old at Leicester races queuing up with my last two bob for fish and chips when Richards drives up in his Rolls and asks for hake. I bought it for him, and he didn't even give me the money.

'I was at Wolverhampton when Winter fell at the last on a 6/4 chance. As he walked past the silver ring, I said, "Hard luck, Freddie!" He said "Bollocks!"

'I also presented Piggott with his retirement trophy at Nottingham. He never said a word and went on to retire another three times! That's celebrities for you!'

Don broke into the newly legalised high-street bookmaking game in the early 1960s. Like many others, he saw this as a licence to print money, and for a time it was. Working initially with his brother, he made so much cash, so fast, that when racing ground to a halt in the big freeze of 1963, Don temporarily relocated to the Canaries for three months - in the days before package holidays.

Always ahead of the curve, Butler was also one of the first bookmakers to realise the value of PR. 'I knew I needed to get my business noticed, so I set up the "Welcome Home Cup",' he explains. 'I gave odds on Lord Lucan, Ronnie Biggs and a black country MP called Whitehouse who had run off with public money. Whitehouse got nabbed first and The Sun invited me down to give him the cup as he was repatriated at Heathrow.

'Next, I gave odds on streakers at the Liverpool versus Newcastle United 1973 FA Cup Final, but covered myself by alerting the coppers to the fact that students would be trying it on. There were more police at that match than at Saltley Gas Works during the miners' strike and as much coverage as when I advertised for a psychic in The Times to help me on my ante-post betting. I offered five grand - big money in those days - and the press was enormous!'

Despite his astute PR, Butler's shops were suffering from a decline in business, and one that was directly related to the near collapse of the British steel industry at the time. With soaring overheads, a vicious assault in one of his shops and a vertiginous drop in his customer base, Don shut up shop and headed back to the track. One of his first assignments was helping out old mate Sammy Nixon.

'I drove Sammy to the 1977 Derby,' explains Don, with a wry smile. 'Sam was the sole bookmaker to the Guards on their annual day out. I held the 'cake' (float) for the next day and was happy buying drinks for any soldier that wanted one. I was getting a few funny looks with regards to the money by the end of the night, so I decided to hit my bunk bed in the marquee. Needless to say, by this time I was so smashed I could hardly walk. Anyway, I was woken in the middle of the night by these two SAS types in combat gear with their faces blacked out. They were frisking me for the cake, but I had stuck it down by pants. A good thing they weren't Ghurkas, or the buggers would have slit my balls off with the money!'

Butler finally reconsolidated his trackside position in 1979, when one of the 'away' bookies died and he finally joined the 'away mafia'. A further boost came in 1987 when Chancellor Nigel Lawson gave the racing industry a leg-up by abolishing on-course betting tax. This gave the 'away' bookies a huge advantage over high-street competitors, who still had to pay tax. The 'away' turnover went through the roof and Don went stellar. It was a time of fat cigars, lobster and champagne.

By the 1990s, however, Don's world was changing. The 1998 National Joint Pitch Committee finally put an end to the 'aways' and allowed the buying and selling of pitches for the first time. The betting exchanges were soon to make their presence felt. However, Don was no Luddite. He pulled out of on-course bookmaking and has since dedicated his time looking for opportunity on the exchanges with his son, Aidan.

Big money

'I sold all my remaining pitches in 1998 and decided to focus on the future,' explains Don. 'And the future is the exchanges. Sure, you don't get the characters and the hustle and noise of the racecourse, but you get great action. During the US election, the price on Bush flip-flopped from 5/1 against to 5/1 on within 30 minutes. If you're organised and a thinker, you can make serious money by taking a position and trading. Sure, there's no noise, only people talking to their computers, but that's just the way things have gone, isn't it? You can't fight the future - you can only adapt.'

Don is right, of course. And the exchanges have made bookmakers of us all. Only not quite so interesting, perhaps, as the ageing Brummie with the camel coat and endless racetrack tales who's just shaken our hands and headed out the hotel door

DON'S FIVE GOLDEN RULES

1. If you win, sit back and enjoy it. Go home and tell the missus. Make her happy.

2. Never go on the chase. Remember, there's always another day.

3. Don't bet on every race - you're only diminishing your chances of winning.

4. Bet on the exchanges. Trade on the exchanges. Smart people can make big money here.

5. Don't be greedy. Bet what you can afford to, not what the next person is betting.

Baking And Eggs

July has been a very lazy month from a betting perspective, and with no blog post for over a week, from a blogging perspective too. My rather smart son graduated last week with a first in Accounting and Finance, and that was an incredibly special and proud moment although tinged with some disappointment as he appears poised to take his talents into the world of business rather than into the world of sports investing. He must have read my advice in this blog on the importance of establishing a career first, with plenty of opportunity for trading in your spare time.

Layed In Running

I also had a week with the wrinklies, aka my parents, who remarkably seem to be able to lead their lives without a computer or Internet access. I couldn't even rely on my iPhone as they live in a valley where coverage is spotty, but they do at least have a TV and a teapot which meant I could watch a lot of Tour de France this year, and drink a lot of tea, although why my Mother feels the need to inquire as to whether I take milk and sugar EVERY time I visit is quite baffling. I am not a baby cow, and nor do I need to be any sweeter than I am already.

As a former, and it has to be said (modestly), rather successful former British professional cyclist myself, Bradley Wiggins' triumph was of particular interest, and the race was made even more incredible for Britain by the success of Mark Cavendish and David Millar winning stages and second place overall in Chris Froome. I remember 45 years ago reading about the death of Tom Simpson at the same breakfast table in the same house as I was at again last week. I don't mean that Tom Simpson died at my Mother's breakfast table. Her eggs can be a little undercooked, but they were not responsible for Simpson's death. He actually died on a climb up Mont Ventoux on a baking hot day. Limited by race organisers to four bottles of water in days before the effects of dehydration were understood, Simpson paid the ultimate price for taking amphetamines and alcoholic stimulants.

Wiggins has now traded as low as 1.71 for an unprecedented second consecutive cycling BBC Sports Personality of the Year award this year, and the first for England since 2006, but as my son Cassini Jr BA(Hons) pointed out, in an Olympic year, this could turn out to be a little early to be so low. It would take something special to beat Wiggins, especially as he actually does seem to have a personality, but these markets can be dodgy. Just look at the last English winner - it was Zara Phillips, from the ridiculous, although admittedly dangerous, sport of Eventing - the equestrian triathlon. Not that the dressage phase is dangerous. Just ridiculous.

Less than three weeks to go before the big leagues return to action. Ligue 1 opens up on Friday 10th August with champions Montpellier at home to Toulouse. Paris St Germain are 1.33 to win the title this season, positively a longshot when compared with Celtic priced at 1.05 to win the Scottish Premier League before a ball is kicked. Only the top leagues in Italy and England have every team priced at evens or greater, with Real Madrid and Bayern Munich both at around 1.9 to win their leagues. While Bayern Munich top my ratings in Germany, Real Madrid in Spain do not.

I still have some catching up to do on emails, requests and reading other blogs, so bear with me if you are waiting.

For XX Draw subscribers, I'll be sending out another test email this week, and updating the web site with the opening weekend selections.

Elo In The News

Elo World Rankings

FIFA's World Rankings

Scott fowarded me a link to an article on spot betting that some of you may have seen in which former Southampton defender Claus Lundekvam alleges that spot-fix betting was commonplace during his time in England. 

Given that the player has had problems with alcohol and drug abuse in more recent years, it's hard to take his claims too seriously, but while looking at Scott's link, I did find another article of even more interest to me, one on FIFA's World Rankings, which includes comments on the advantages of using an Elo based system, my own preference when it comes to rating teams. 

The article in full is below. 

Like “Knock knock” jokes, FIFA’s soccer world rankings have long been a source of amusement but the latest list, putting England above Italy and Denmark above Brazil, is an embarrassment to the world’s most popular sport.

Some aspects of the current top 10 make sense. Spain, the record-breaking European and world champions, have increased their lead in first place ahead of an entertaining Germany team.

After their disappointing displays at Euro 2012, the Netherlands have fallen to 8th while Italy – the surprise success story from the recent tournament in Poland and Ukraine – are back into the top 10 having risen to 6th place.

However, that still puts the Azzurri behind England, the team they beat in a penalty shoot-out at the quarterfinal stage. While a victory on penalties suggests a close game, most neutral observers agreed the English had been thoroughly outplayed.

FIFA’s ranking is a complex process and the most crucial point is that it calculates positions based on results over a four-year period.

Essentially, it uses a formula that takes into account whether a team wins, loses or draws, added to how important the match is, the strength of the opposition and where they are from, to create a points score for every side each time they play.

Factoring in which confederation a team is from is an interesting part of the equation and a controversial one, according to Romanian computer programmer, Eduard Ranghiuc, who runs a football ranking website.

His understanding of FIFA’s rankings calculations led to him spotting errors in their sums. World football’s governing body now check his website before they release their figures.

Ranghiuc claims that teams from smaller confederations get fewer ranking points for the same result against the same opponents as, say, a side from Europe or South America. He prefers another ratings system, called Elo.

He told CNN: “As far as I can tell from comments I received on my blog and what I've read on various message boards, fans prefer Elo because it's more stable. You won't see teams shooting up 30 places after winning a match.”

“Elo doesn't punish teams for playing too many friendlies. Mexico for instance could be much higher if they would play fewer friendlies. All points gained are divided by the number of games. And then there's the usual distrust towards FIFA. You can't blame the fans.”

But even Elo doesn’t differ that drastically and I would go even further to try to make FIFA’s world rankings more intuitive. How about using a player rankings system – like the FIFA-backed Castrol Index – that gives each international squad an innate value?

Or issue ranking lists less frequently to avoid short-term ranking aberrations?

Golf’s world rankings have also been heavily criticized, with many experts unhappy that recent number ones include players like Lee Westwood and Luke Donald – who are yet to win any of the sport's four major titles, the most frequent barometer of success.

At the same time, golf's list is flexible enough to have quickly put Tiger Woods back up into the top four, from below 50th in the world, once he started winning again – and that is a true reflection of how he is rated and how well he is playing.

Ultimately, football’s world rankings need to “look” right at a glance. Two years before they host the World Cup, five-time winners Brazil are 11th in the world, below Denmark and Croatia, and I doubt even fans from those two European countries would agree their national sides are better than one containing Neymar, Pato, Kaka and the rest of the so-called Samba Boys.

The USA are down at 35th in the list despite their proud recent record in major competition.

It’s those sort of eyebrow-raising results that leave FIFA’s ranking system open to mockery.

Gentlemen's Day

My faith in humanity, or at least in Ian Erskine's gambling philosophy, has been restored. In yesterday's post, I suggested that the comment in Ian's newsletter that:

"Ian has mentioned on more than one occasion that as a rule it should be achievable to make around 2-3% a day increase on your bank size..."

was out of line with Ian's normal approach to betting, and that perhaps something had been lost in translation by the author.

Ever the gentleman, Ian took the time to address the matter, and his comments in full are here:

Thanks for pointing out the flaw in the newsletter on greenallover, you are correct I did not write it, that was Kieran and I have never said such a thing, lost in translation sums it up nicely, I purely stipulated a while back that people should set their targets of winning lower rather then trying to get rich tomorrow, I am totally against weekly, daily targets etc for the reasons you state. I will be correcting next week.

Hope you're well mate and enjoying your quiet time with your son, I am doing much the same for the summer.

Ian's line that people are better served by avoiding the thinking that it is possible to get rich tomorrow fits nicely with another part of yesterday's post which is the Bill Gates quote I mentioned.

As I write this, the Gentlemen's Final is in a rain delay. For some background, I casually mentioned to Mrs Cassini that Andy Murray was a student at Dunblane Primary school at the time of the massacre, and was acquainted with the murderer and alleged pedophile, and she is now rooting against me! I have a habit of trading out of winning tennis positions too soon, so when play resumes, I shall distract myself with something else. Trading tennis in competition with courtsiders doesn't work too well. 

The We Ain't Got No History website has an excellent article on the problems with using statistics in football. The 'Bill James' referred to is the man who coined the term sabermetrics. Baseball is, of course, a much simpler for both recording and using statistics, than almost any other sport and especially football, and the ratings that produce the XX Draw Selections are limited to those statistics (numbers) for which there is evidence that they are related to goals. It seems to me that the author, Graham MacAree, has very neatly summed up the problem with football and numbers. If I see evidence that Gokhan Tore's dribble conversion rate has an impact on a goal expectancy number, I shall start to include these numbers, but I have my doubts that this will be any time soon. 

It happens like clockwork. Whenever a match is 0-0 and one team is dominating possession or shots, the halftime commentary will invariably include a remark about how the only statistic that matters is goals. It's easy to take this as an attack on the number-crunchers, and in many cases, it probably is. But it's also entirely true, and to shrug it off as a cliche misses the point entirely.

There seems to be a perception that football statistics are entering some sort of golden age. With the proliferation of statistics sites such as WhoScored and EPL Index, not to mention the massive popularity of Opta's Twitter feeds and the Guardian's sadly-discontinued Chalkboard service, it's not hard to see why. Information is available where previously there was none.

But anyone claiming that the Moneyball revolution is underway in football is sadly mistaken. The current statistics fail (and fail utterly) at passing Bill James' language test. If a player makes two fewer tackles than average but one more interception with more completed passes, for example, we have no way of figuring out how to put those statistics into context. What we currently have are numbers, not meaning.

The basic unit of football's natural language is, of course, the goal. Goals are, as it were, the point. Teams want wins, and therefore they look to maximise goals scored and minimise goals conceded. Taking more shots, winning more challenges and completing more passes are only relevant statistics for teams if they can be converted into goals.

And, right now, we're missing that bridge. We need meaning. Instead, we have numbers. It doesn't matter how many dribbles Gokhan Tore converts per game; it matters how he contributes to his team's goal differential in each match. If there's no way of telling how those dribbles impact Hamburg, there's no way to put Tore's statistics into their proper context.

In order to progress to the point where football statistics are actually helpful to those looking to really understand the game, we'll need to find the language of football, not just the letters. Finding that bridge should be the main focus of every analytically-inclined football researcher.

That leads us to a couple of interesting questions:

Is it possible?

If so, what is the best method of attack?

For many, the answer to the first question will be 'no'. Some might argue that football is too difficult to analyse, computationally intractable. Some might claim that putting numbers on human endeavour is inherently futile. With respect for those with said views (and with apologies for over-simplifying a long-running argument), I would disagree.

While it's clear that football is significantly more difficult to analyse than, say, chess, or baseball, that's not enough to drive it into 'impossible' territory. Every single time we watch a play develop, we're running some sort of subconscious mental algorithm as to the likelihood of success. As we watch more games, we refine our ability to predict what will happen, with some people carrying around superior mental models to others.

Football is a complicated game, certainly, but unless it's truly chaotic (which it obviously is not), we can and will analyse it, whether that be through numbers or in our collective gut. After all, we know that on any given day, we should expect Barcelona to beat, say, Preston North End, or that Cristiano Ronaldo is more likely to score a goal than Tim Howard. There's obviously some structure in the sport, and that alone is proof that we're not looking at an impossible problem.

But we are looking at what seems to be a very difficult one.

Researchers aren't going to stumble upon some sort of footballing Rosetta Stone - the language metaphor starts to fall apart when you consider that football is a sport designed to entertain rather than to communicate - and it's far from clear how to decode it. Perhaps another sport can help us. What would Bill James do?

Federer, Handicaps And The 2-3% A Day 'Rule'

Wimbledon draws to a close, and my interest is limited to a couple of smallish bets on Serena Williams and Roger Federer in the singles finals. Serena Williams was a little tight at 1.17, and she traded at 1.64 to make the bet interesting. To my layman's eye, Federer at 1.56 looks to be a gift, but there are others who know far more about tennis than I do, so this is not an investment that I claim to have an edge on. A fun bet to add some interest to the Gentlemen's Singles final. 

One of my XX Draws subscribers asked me how my baseball was going this summer, and the answer is 'a little strangely'. I have a simple system that I back selections on three markets - the Match Odds, the +1.5 handicap, and the -1.5 handicap. Overall, the three show a small loss, but the curious thing is that the +1.5 and -1.5 handicap bets are in profit, while the Match Odds bets are losing. The sample size is still fairly small, and these three may yet come together. It will be interesting to see how the XX Draw selections compare, with the draw, some Unders and the HT 0-0 among the markets ones that I will be monitoring and comparing. I will publish the data when the number of matches reaches 50.

Finally, I was reading Ian Erskine's FTS Newsletter today, and there was a good quote that I hadn't seen before from Bill Gates - 

"Most people overestimate what they can do in one year, and underestimate what they can do in ten years". 

I think this is very true when applied to sports investing. Too many people think that they can start making big money on day one and fail to grasp that, like many other pursuits in life, slow and steady wins the race.

I do take issue with the comment in the newsletter that "Ian has mentioned on more than one occasion that as a rule it should be achievable to make around 2-3% a day increase on your bank size..." 

Really? If it were that readily achievable we would all soon be millionaires with the wonder that is compound interest, but in my opinion 2-3% a day is not realistic, and there is no rule to suggest otherwise, at least not that I am aware of. 

I take issue with breaking betting down into daily units for a start. All days are not created equal. Some throw up no value opportunities, and others may have several. Most sports do not have events every day anyway, and even year-round events are subject to the vagaries of weather. Look at the number of cricket matches that have been impacted by the summer weather this season for example, or the number of race meetings lost in a bad winter. 

Short term targets  are not helpful. They lead to chasing and betting at borderline (or negative) value, and I am actually surprised that Ian would suggest such a thing. (I believe the newsletter is not actually written by Ian, and it is possible that something was lost in translation). I may not always agree with Ian on his strategy, but in general I like his approach to betting and treating it as a long-term process, but the idea that a 2-3% a day growth is sustainable is diametrically opposed to the slow and steady approach, and frankly nonsense. 

Summer Lull

Not a good finish to Euro 2012, with neither the wallet or the soul being enriched by Spain's triumph in the Final. Bets on the HT 0-0, Under 2.5 goals, and Italy to prevail all went south, and an overall loss on the tournament, but with little in the way of statistics, stakes are for fun only, so no real damage done. I'm not sure 'fun' is the right word to describe such bets though, since losing is never fun.

June Gloom

So no more football betting until the new season, and some quiet time to update the spreadsheet with the promoted teams and add some new columns to track the profitability of some other markets.

An excellent article on England and penalties is linked to here, explaining that while England's dreadful penalty shoot out record may not yet be statistically significant, another loss in the next shoot out, and most statisticians would agree that significant it is.

The baseball system has gone very quiet of late, with days passing and very few selections. Just 25 selections in June, The last four have all lost by one run, so winners on the +1.5 market, but losses on the Match Odds and the -1.5 market, the latter being the most valuable of course.

I'm not a big tennis trader, but I did profit from the trials and tribulations of Nadal and Federer at the end of last week.

July will be very quiet, both blogging and betting. My son graduates this month, and I'm spending some quality time with him prior to that milestone in his life.