Thursday, 24 October 2013

Eggs In The Hedge

Graeme, aka The Football Analyst, has put some of thoughts down on paper, well pixels, and you can read them here. I have to admit that all the systems Graeme maintains boggle my mind. Tracking the fifteen (three selection group by five markets) XX Draw based systems last season was more than enough for me, but Graeme is made of sterner stuff and effortlessly tracks 52 (I think).

Anonymous noted that:

Premier Betting in total are -28 points on their portfolio betting . The results are not on their site. I cannot think why.
I have them down by only 21.27 which is odd, but their web site should have the latest numbers. Unfortunately, I don't see any results at all from this season there yet, so I can't see the reason for this discrepancy. While I was there, I did notice this:
With the “Portfolio Approach” that we use for our own investments, we look at spreading this risk across varying markets and price points, much like a hedge fund manager would in the traditional financial markets.
I'm pretty sure that a hedge fund manager would not be backing Under 1.5, Under 2.5 and Under 3.5 goals in the same match though - the idea of hedging is to reduce the impact of a negative event occurring. Putting all your eggs into one basket is NOT spreading the risk, and nothing at all like a "hedge fund manager would do in traditional financial markets".  The Unders or Overs markets may be different markets, but they are correlated as I have explained before.

Peter also wrote this about the new strategy in 2013-14:
For the 2013/2014 season we will be offering a slightly different service than in previous years. We will now be giving you access to one of our successful betting portfolios. This is aimed at the slightly more experienced investor, who operates with a dedicated betting bank and can follow a strict fixed return staking approach.
I'm still confused by why there is any benefit to a "strict fixed return" (i.e. variable staking) approach.

As I wrote back in August:
I must admit I am a little confused by one method should have any advantage over the other. At evens, it makes absolutely no difference at all, and little difference around that price. If your edge is on odds-on selections, you maximise your profits by using variable staking, but if your edge is on longer odds, you are better off with fixed staking. The problem is that if your edge should turn out to be negative, the laws of mathematics mean that your losses increase by following that strategy.
My comments on the edge being negative seem most prescient.

While most football tipsters are struggling right now, John Walsh's NHL selections continue their great run.
Boston defeated Buffalo Sabres 5-2 last night and John's record of 12-4 is really quite excellent. 


Anonymous said...

Cassini this is a brilliant article and I think you have highlighted that being an "expert tipster " will not protect the "expert tipster " from losing over a season because as you say if the strategy is "negative " then it will be a long term losing one.

It is all perception in the betting tipping industry and people assume that if a site says they are expert tipsters then 1. they are 2. they will have long term profit, and we see in many cases that as a result of 1 not being true that 2 does not happen.

If you look around the football "tipping industry " this season you will only find a small number of tipsters that have achieved a profit this season and the question is why is this ?

The simple answer must be 1. There is very little edge to be had in pre off betting .

2. The tipsters that are in profit have been lucky and will have some negative variance over the season to bring them back down.

If we use the example of the stock market crash on recent years when for example banks were pumping lehman brothers bonds because lehmans offered them the best commission then I think we are getting the "expert tipsters " that are getting the most exposure by affiliation with bookmakers who pay them huge amounts to send them losing players.

The irony is that the industry is not looking for winning 'expert tipsters " . They serve no commercial purpose .

oh the irony.

Tage Poulsen said...

Your confusion about the merit of fixed profit staking can be solved by reading the book 'Fixed Odds Sports Betting' page 134 by Joseph Buchdahl.
"For all profitable betting systems fixed profits staking offers roughly the same rewards as for level staking but at a reduced risk. This supplementary safety margin is not large but it is significant, and could mean the difference between profit or loss particularly for higher odds and larger stakes gambling."

Tage Poulsen said...

It's interesting to note your argument about 'the edge should turn out to be negative'.
If you know before kick off that the edge is negative you are not betting at all. So this information must come from in-play.
It appears to me, that you use the opposite argument, when you discuss expectation of goal models.
Have I got this wrong?

Emp said...

Clearly it isn't a good idea, and it's the opposite of what a hedge means, but far too many hedge fund managers do exactly that.

Anonymous said...

I've spent many an hour contemplating the merits of fixed stake or fixed profit staking. Fixed profit staking performs significantly worse than fixed stake when the return on turnover is anywhere between -3% and plus 3%. Fixed profit staking always performs worse and worse as your percentage of bank per bet increases. I would only ever consider using it if I were highly confident of achieving a return on turnover of 5% or more, at which point the profits would be far higher than fixed stake.

The laws of mathematics are a harsh mistress. Consider this, a betting bank of £1000, place 1000 bets at odds of evens (after commission) with a +1% return on turnover (to level stakes i.e. 505 winners, 495 losers). Placing 4% of your bank on each bet might be considered risky - especially when the final bank after placing these profitable bets would be approximately £670! In fact, to merely break even in this scenario you would need a return on turnover of over 2%.


JLivermore said...

"I'm pretty sure that a hedge fund manager would not be backing Under 1.5, Under 2.5 and Under 3.5 goals in the same match though"

I beg to differ - given his standing in your table it's definitely rational. It allows his returns to have greater risk than someone betting on different matches, and this increases his chances of winning the league.

Also tipsters in general have a form of the 'traders option'. If you make good tips you stick them on your front page and look great, if you make bad tips you hide them away elsewhere (and perhaps focus on showing off your other profitable strategies).

There is a good explanation here:
Risk-Reward Asymmetry - The 'Traders Option'