Growing The Mighty Oak

With Newcastle United handily beating Wigan Athletic last night, the table is set, and we now have over 1,000 selections in the bag. Sadly backing everything would show a loss to level stakes of a little under 5%, but 13 of the 30 are in profit, although with just four selections, the Bundeslayga system should probably be ignored for now.

Neil closed the gap on Premier Betting and Premier Edge ended in the green after their Newcastle picks both won. Most of the others I covered yesterday, but one big anomaly is the fate of the XX Extended family of bets. With four in the top six spots and a relatively large number of selections, it's strange to see the Under 1.5 bets in 30th and, rather embarrassingly, last place. The Classic picks are all grouped fairly closely, but the Bundesliga selections are evenly spaced out from 2nd down to 28th, which is also odd.

I mentioned Betfair Banter's plans to move towards Draw finding, and Stu commented:

Betfair Banter may be about to board a sinking ship. This season's Premier League results have included 33% draws, considerably higher than the 26% average of the last four seasons. (Highest was 29.2%). There doesn't have to be a "correction" of course, but I would not bet against it.

The most EPL draws in the last 10 seasons is 111 from 380 matches in 2010-11, 29.2% as Stu said. The lowest in the last 10 seasons is 2005-06's 77 (20.3%) with he average (mean) being 98 (25.8%). With 49 draws in the bag already, another 49 would see the average hit, and with 231 matches remaining, that's a strike rate of 21% which is almost certain to be reached. The long term average from here on in would actually leave the season total a little under the high watermark of 111. If Webbo is expecting the draws to continue at 33%, he's likely to be disappointed, but what is key is not the strike rate, but the returns on the draws. 33% of draws at 3.0 isn't as notable as 20% of draws at 6.0.

In reference to my last post, Chris asked:

Hi Cassini, where did you get Table 1 if you don't mind me asking?

Not at all. It comes from a 2011 study by Alexis Direr of the Laboratoire dí Economie dí OrlÈans (LEO) and Paris School of Economics, rue de Blois:

This article investigates the degree of efficiency of the European Football on-line betting market by using odds quoted by 12 bookmakers on 21 European championships over 11 years. We show that systematically picking out odds inferior to a threshold delivers a rate of return of 4.45% if best odds are selected across bookmakers and 2.78% if mean odds are used. This amounts to backing overwhelming favourites whose probability of winning exceeds 90%. Our results only exploit information contained in odds, are robust to the use of real-time data and different sample periods and hold under risk neutrality and expected utility preferences for realistic degrees of risk aversion. Transaction costs reduce profitability but only for small stake bets.

I have the pdf if you can't find the study on the web.

And finally, yesterday was one of this blogs busiest days ever. The reason? Ian Erskine sent out an email which he does fairly often, but this one contained a link to his latest blog post, and a teaser for myself that:

(Cassini if you get this email you will want to read todays post)

I almost fell out of my chair, and not because of the missing apostrophe in "today's"! The reference to myself was in a paragraph about starting banks. Ian wrote:

Over time we will break down the myths of what is required but my starting point today is bank. I bet long before Betfair and lost fortunes. My first deposit into Betfair was £50. My initial starting cash to get where I am today is less than £1000. You can believe that or not believe it. I will give you a further example Cassini who operates Greenallover which is an entertaining blog started with I believe £98 and has never made another deposit, went down to £20 odd quid and now pays 60% Premium charge, focusing mainly on American sports betting and trading (see Cassini nice plug, if you wish to pay back the favour by means of a few articles for FTS it would be welcome, I ask publicly as I did email you but had no reply).

A couple of minor corrections - one is that the starting bank was £98.50 (the deposit of £100 was charged a processing fee of £1.50 and I remember it well) and I pay 50% Premium Charge, not 60%, but the point is correct. A small bank is all you need. If you have patience and an edge, a small bank inevitably becomes a large bank. Patience means 'don't make withdrawals', and stake sensibly.

My £98.50 was deposited in April 2004, and at the end of August 2005 had shrunk to £93.11 via the £20 that Ian mentioned. While that 16 months wasn't exactly lucrative, it didn't matter. Studying the markets was a hobby, the money was nothing.  As with most apprenticeships, the financial reward is secondary to the benefits of the learning experience. Once you've found an edge, the only thing between you and steady profits is you. Note that edges don't last forever though, markets are smart, so the ability to adapt is essential.

2012

Ian - I shall be in touch regarding returning the favour. I must be the rudest blogger in town ignoring emails, but in my defence, I have a lot going on most of the time.