Thursday, 3 October 2013

Opposites Subtract

Peter Nordsted did stop by (I told you he would) to offer his explanation for the differing recommendations on various web sites / emails. I can’t say he has really cleared things up for me though. Peter wrote:
To clear this up I do freelance writing for Matchbook where I am asked to concentrate on the Top televised matches for the Premier League and Champions League and I am asked to do a write up and finish with a recommended trade for that game.
The analysis I provide for Matchbook is based on a statistical view point but also contains my own subjective opinion.

The selections that are produced for Premier Betting are based on a situational model that has proved profitable over the past few seasons and contains no subjective opinion of my own whatsoever.
Indeed some of the selections go completely against my personal thoughts with the Everton v Newcastle game being a point in case.

For example 2 weeks ago the model as well as the Drawmaster (which is based on a similar model) suggested backing the draw in the Everton v West Brom game whereas my personal opinion would not have been to take this position on.
From an investment point of view I invest in the Premier Betting selections along with other selections in different leagues which the model suggests.
In the previous 2 seasons all of the Premier Betting picks were based on myself and Danny’s personal opinion but we decided that we wanted to share part of our profitable portfolio with members and this is how will go going forward.
I hope this clears matters up and just to reiterate although I co-head Premier Betting none of the selections given by Premier Betting contain any subjective opinion.
This approach has highs and lows and we will only be judged by results by the performance at the end of the season come what may.
So in summary, the Matchbook reviews are based on a statistical viewpoint but additionally contain Pete’s subjective opinion, whereas Premier Betting selections are based on a situational model that has proved profitable over the past few seasons and contains no subjectivity whatsoever. For the sake of clarity, no subjectivity whatsoever means totally objective.

So far so good, but Pete says that “in the previous two seasons all of the Premier Betting selections were based on myself [Pete’s] and Danny’s personal opinion” – in other words, the objective Premier Betting selections this season is new – they are an untried and unproven technique. The subjective element of the past two seasons has been removed.

Why would a proven winning formula be changed? Looking at this logically, with the assumption that the intent is to improve the returns on the Premier Betting Account bets, as the previous two Premier Betting seasons were profitable, the inference is that the subjective component was reducing profits which by extension, leads to the conclusion that Matchbook readers receiving this subjective advice are receiving advice that if acted upon, will cost them money.

If the subjective element is discredited, then is it reasonable and fair to make recommendations based on this?

The argument could be made that Peter’s members pay more and deserve a higher quality product, but I’m not sure the tipping industry ombudsman would necessarily view recommending an opposing position to others as ethical behaviour.

Imagine a financial advisor telling one client that he should buy shares in Company A based on excellent data, but telling another client that he should sell Company A shares because “I have a bad feeling about this one” even though following the numbers has a better track record than his feelings.

While we are in the business world, Emp commented that:
I don't think that's particularly irregular. Hedge fund managers often have different strategies and services for different clients and those different strategies are often diametrically opposite (that's what a hedge is in the first place).
Even football tipsters often have a bewildering array of differentiated systems, and none of this can or should be construed to mean that the operator can't have a different opinion. It's perfectly normal when you sign up for a non-discretionary service provided by person X for the service to recommend bets that X doesn't agree with. If someone else want's X's subjective opinion and that happens to be diametrically opposed to his system I don't think that's unethical or a conflict of interest.
Yes, hedge fund managers do offer different strategies, and thus advice, for different clients, but that is because not all clients have the same risk tolerance or the same amount of money to risk. When their investments are “diametrically opposite”, it is because they have locked in a profit whatever happens – which is not the same as suggesting to back overs at 1.91 and unders at 2.05. Do the maths. A hedge fund would look to back at a total book of less than 100%, not greater.

On this aspect, Anonymous commented:
Emp that may well be so, but we're talking about a 2 man band here not a multinational company. If my model told me one thing and I was writing an article I would not give the opposite to what people had paid for......especially when the free advice wins whilst the paid for is trounced. Terrible PR, almost Ratner like!
The Account Bets are not free advice, and speaking personally, anyone subscribed to the XX Draws service gets selections that are generated objectively. I have no personal opinion of them, I’m simply the messenger. If my opinion was worth anything, I could save myself a huge amount of time each week, and just pull winners out of my ears on a Thursday morning, but I learned long ago that that method doesn’t work for me. Aside from the draws, the Cassini Value selections are also objective, and while an element of subjectivity may cause me to adjust my stake (including down to zero) if say a star player is out, or there has been a managerial change or some other game-changer, the selection is still that so far as the records are concerned.

What about Emp’s closing line? If someone else wants X’s subjective opinion and that happens to be diametrically opposed to his system I don’t think that’s unethical or a conflict of interest.

But what if you know for sure (as shown above) that your subjective opinion isn’t very good and leads to losses? Is it then ethical to continue to tell some people that they should make bets that you know are long-term losers? Pete confirmed that the bets he places are the Account Bets, so you could argue there is some hypocrisy here. “In my opinion you should do this, but I am actually doing the opposite myself”.

So far as Anonymous is concerned, he has this to say on Peter's response::
Well first things first that clears up nothing. The explanation makes as much sense as having different selections for paying and non-paying viewers. If Matchbook are happy to just have subjective views that's one thing, but why would you have them in the first place, if you have a successful situational model for paying subscribers (are you not convinced of its worth?)....ignoring your own businesses advice is pretty damning evidence of its quality.
Matchbook just want eyeballs and to maybe drum up a little interest on the game featured (the Top televised matches for the Premier League and Champions League), and bring in a little business. They have no interest in the quality of any recommendations. I doubt that many people read such write-ups and blindly go out and follow the summary recommended bet, but I could be wrong.

Now I hasten to add that I have 'known' Peter for a very long time, and in my opinion he is a genuine and hard-working person. I don't necessarily agree with some of his ideas, but if we all agreed on everything all the time, it would be a boring world with little value to be found, and the bottom line is that I believe Pete means well, but when the web gets a little tangled with conflicting recommendations, it's perfect that Analytical Spider crawls down the drainpipe to offer this comment: 
Interesting one this. I kind of agree with Emp but I definitely have some issues with Pete's response. I've constructed different models that have proven over a long period of time to be profitable and yet, because of the different criteria used they will - very occasionally - offer opposing outcomes as value bets.
I like Pete and don't think it's an integrity issue as has been alleged but surely amongst the biggest gambling follies is going with subjective judgement bets. Unless you're betting on niche markets or lesser known markets I find it highly unlikely there are many if any serious bettors betting weekly on the big leagues, using their opinion and making long term profits. I've never met or heard of any and I've met a few having been a full-time trader/gambler for 10 years.
Given Pete's apparently got a successful data based strategy I find it a little strange he'd even want to offer subjective opinion (certainly on one like an over/under market in the prem).
Personally I've found the longer you're successful at betting the more you realise how fallible opinion is (certain markets/situations excluded) and I'd tend to agree with the above comment that it doesn't reflect well on the quality of his model.
The model Pete uses is a topic for another day, but I have serious doubts over how reliable a generic comparison of Category B teams v Category D teams can be.

1 comment:

The Investor said...

I find it highly unlikely there are many if any serious bettors betting weekly on the big leagues, using their opinion and making long term profits. I've never met or heard of any and I've met a few having been a full-time trader/gambler for 10 years.

Well they are certainly there. In play they are the match readers, and pre off there are also people making money from incorrect odds in big markets without using sophisticated databases, stats and quantitative info.