Dunning-Kruger

WhyAlwaysMe doesn’t exactly sound like a name that someone full of confidence with all their ducks in a row would use, but I am pleased to see that he, admittedly self-reportedly, knows much more about betting than Derek McGovern. Why he continues to provide evidence in direct contrast to this claim is thus a little surprising.

For example, the idea that 50% edges are everywhere or that backing a team at 3.8 and fortuitously seeing it steam in to 3.1 means he had an edge!

The Dunning–Kruger effect in play perhaps? I have Al’s support on this, as he suggests:

Does that not mean backing a selection early and then hoping it steams [in] is just lucky and not getting value?

Indeed it is. As I pointed out, the steamer could just as easily be a drifter. You COULD be getting value with your back at 3.8, if for example you had the price at 3.1 at the time it was available at 3.8, but WAM had no idea of a ‘true’ price and it was his idea that he had an edge in such a scenario that was so amusing.

Al went on:

I’m confused now.

I thought if you identify value, whether it steams or not doesn’t really matter – as long as you have gained enough value to make it worthwhile, i.e. >10% etc.

This 10% figure that is being bandied about is probably my fault. Let me clarify that any edge is good, so long as it is positive, but that estimating ‘true’ prices can be tricky. By using 10% as a starting point, I have a little margin for error and it allows for commission or other charges.

Backing a ‘true’ 3.22 at 3.5 gives an 8.7% edge, but with a 5% commission for example, the edge reduces to 4.8%. If you can get 3.55, then your edges are 10.2% and 6.3% respectively. Banging my ‘why I love draws’ drum again for a minute, once established, the draw price rarely moves. You will see money matched mostly at say 3.5 and 3.55, and lesser amounts just outside these numbers, whereas to use WAM’s example of Huddersfield Town last weekend, they traded at between 3.8 and 3.1. In my experience, if you put a back in at that 3.55, so long as there’s not just five minutes to go before kick-off, you will get matched.

As for Al’s ‘enough value to make it worthwhile’ comment, if you generate enough bets, surely any positive return after expenses is worthwhile? I would not agree with the idea that you need >10% value to make it worthwhile. I simply like the >10% cushion on bets where the ‘true’ price is a little harder to calculate.