Tingly Loins

That Steve over at Daily 25 is becoming more and more of a character each day. In his latest post, on the topic of Graeme Dand's 52 systems that make up the TFA, he came up with a couple of corkers.

I like my blog writing the same way I like my sex, in and out quickly and leaving someone very unsatisfied.

The hint that there is possibly a connection between blogging and sex is interesting. Some blog daily, some blog more than once a day, while others need longer recovery periods between posts.

Graeme does have amazing stamina when in action, but he's not in action that often. Weekly is usually good enough for Steve, but his choice of words is sometimes disturbing:

I know Cassini’s loins get all tingly when I mention him on this blog, but he has a timely blog post which helps with this point. He was saying how Peter Nordsted (A tipster) had posted an under bet for subscribers to his service and then posted the opposite side on twitter. This is a blatant example of what I was trying to get at. With so many different bets (and overlapping bets) it is easier for a tipster to point to the winners. 

As I mentioned, the main theme of Steve's post wasn't my loins, but Graeme's abundance of systems. It's something I've commented before, and it does seem unnecessary, especially when you consider the limited number of matches that make up the pool Graeme draws from each week. 46 league matches plus 12 Conference Premier games generating enough bets to warrant 40+ systems does seem a little excessive.

It's not like an investment fund choosing from thousands of companies of different sizes and across different sectors. This is one country and the top five leagues in one sport.

Of course, Graeme's selections can and do appear in one or many systems, but it does make it difficult to assess how good the ratings are. For me, the measure of a system is one point per selection - are you up or down?

When you vary stakes and combine selections in multiples or select opposing selections for different audiences, it's easy to see why accusations of smoke and mirrors have some merit. Although not perfect by any means, the FTL does at least apply one point per selection, all of which are singles, and uses the same source for all prices allowing a like for like comparison to be made. Yes, Pinnacle's prices can often be beaten, and Draw No Bets and Asian Handicap bets have to be recorded in ways that the selector didn't advise, but over time, who is finding value and who isn't will show through.

The other point I want to make here is about how it is possible to find so many value selections from such a relatively small list of selections. My pool is the top five European leagues, usually 49 matches per week, and of those there are maybe 13 or 14 are draw / under value bets on average, and the Value Selections for this season total 75 - which is 0.054% (1 in 20) of the matches. I do look for a 10% minimum edge on these bets, and maybe should settle for less, ROI for show and all that, but I'll see this season out before making any changes.

A comment on the Football Form Labs guest post, more of a sales-pitch than I was expecting, misses the point that most football bettors are not full-time syndicates with millions of other people's money to invest, but part-timers / hobbyists looking to make a few extra quid for themselves:

Great stuff Will > high turnover and low margin is the only way to win in the long run which is what every betting syndicate around the globe is doing.

Pointless having 4/5 bets a weekend . It will not work. You need a big rod in a big sea.

The statement that "high turnover and low margin is the only way to win" is clearly incorrect, and I would disagree with the 4/5 bets a weekend being pointless line too.

If the point is to make a little extra money and not spend all weekend watching sports, then I would say this is the perfect set up. What "it will not work" means I'm not sure. For many of us, it works just fine. What one person is looking for in betting, as in life, is not necessarily what others are looking for.

On the subject of the Fidens Fund, I had one email expressing concerns. It's not a new idea, and Centaur Sports famously went bust in 2012 doing the same thing.

Back when the fund launched in 2010, the directors of Galileo told CNBC that they were using high-level software that took five years to develop, and expected to a 15-25% return on investment.

But last week investors got a letter saying the fund was being liquidated and all the money was gone.

On paper, this seems like it should have worked (Mark Cuban even endorsed the idea in 2004). Plenty of professional gamblers make their living handicapping sports and finding value in point spreads. And with all sorts of cash and technology at its disposal, you'd think a fund like this could generate some decent returns.

So what went wrong?

According to the Journal, the fund told investors that they lost it all due to "sheer bad luck".

Sheer bad luck, or just an idea that is fundamentally flawed? Sports betting markets are a small fraction of the size of financial markets and strategies that work in the latter won't work in the former. In betting markets, it's an advantage to be small - your £20 can be easily bet at top prices, your £20,000  not so easily, and your £75,000 or more? Prices will start to shorten and your edge / value will decrease.

If Fidens do have a sustainable edge, why would the operators not just invest their own money and compound it?

At the average edge of 3.76% they claim (over 9,400 bets), an edge found on 3,000 bets a year, 'just' £1million would be worth about £1,757,596 after a year, if risking the stated conservative 0.05% of the total fund.

Why they would need those additional minimum £20k deposits is the big question prospective investors should be asking. The additional money won't mean better prices - there's no bulk discount in betting.

An edge of 3.76% over 9,400 bets is very impressive, as is finding 250 value bets a month, but as stakes rise and best prices are that much harder to get on at, that number can only come down.

28 investors with just under £1.5 million invested means an average investment of around £50k. The 'performance fees' applied at the end of each quarter (at a rate of 50% on the profit in that quarter) would generate, using the numbers provided, about £3,785 per account. Multiply that by 28, and goodness! That's £424k a year.

Stand by for news of the launch of my new Cassini Value Fund. My loins are tingling.