Grey Swans And Puddings

The member who sought clarification on my Official, Unofficial, Conditional selections earlier this week replied to my response, and while I did put his mind at rest directly, I also mentioned that I felt another post coming on. Well here it is: 

This was the member's reply, broken down into parts so that I can address one topic at a time.

Thanks for your reply addressing my concerns. On reflection I may have come across a little harsh and this wasn't my intention. I value your service very highly, so highly in fact it is the only one I am subscribed to as a 'paid service'. I think you're very fair, overly so in your recording of prices and can totally except you cannot record prices of draws below 3.15 because of their lack of profitability long term.

I didn’t take the comments as being harsh. The issue of price is an important one, and after reading some posts from the likes of Daily 25 and TFA or those who follow horse racing tips, I feel fortunate to be playing in highly liquid markets where the prices are generally stable.

Prices, both recorded and attainable, are clearly a source of frustration. Recent examples from this week are Steve M’s experience of College Football, with the tipster’s frankly idiotic statement that the “line doesn’t really matter” and then Graeme (TFA) saw the price collapse on some of his season opening Conference selections, “some bugger took 0.85pts off one at Pinny at 7pm on the dot” in markets where liquidity is much lower than in the top leagues – Graeme again “We all go for same bets at once in poorest liquidity league”.

Member continued: 

Of the three selections which dropped in price on the opening weekend of Ligue 1 that became unofficial observations, I secured prices of 3.25, 3.20 and 3.20 all with no commission. I understand these odds may have the potential to yield me a profit long term, but they also may not. Going on last season's data, I don't think the prices I secured would be high enough to bring me into profit on the selections that drop in price and become unofficial. Therefore, it's very possible for a subscriber to your service to end of with a lower P&L than your recorded results. I understand this isn't your fault, and I know full well you go above and beyond to provide a very fair service to your clients, it's just something that each subscriber is going to have to make a decision on for whatever suits them the best. I think I may well leave all Ligue 1 selections that you send out and re-assess the prices on a Friday afternoon before placing my investments. However, what time on a Friday afternoon, I do not know. Should I check them at 12:01 or 16:59? I'm sure prices fluctuate in that 4 hour 58 minute spell. I guess I'll have to figure that one out.

This is an independent confirmation of my claim that Pinnacle’s prices can usually be beaten. Although with the news yesterday that SBOBET are closing UK accounts, beating them has become a little harder.

It is with regret that we wish to advise you that we are no longer able to continue to offer you the betting services with SBOBET.

This unfortunate circumstance has been brought about by the changes to the legislation in your country of residence with regard to online gambling. Unfortunately, it will now be necessary to close your SBOBET Account with effect from 15 September 2014.

Anyway, 3.25 and a pair of 3.2s are a lot better than 3.12, 3.08 and 3.09. Looking at last season’s data is probably not the best place to start, given that it was something of a ‘grey swan’ event with draws in all five top European leagues falling below their 5 and 10 year averages, but even in this difficult environment, an average price achieved of around 4% greater than that recorded would have made an 18.93 point difference to the good. (There were 487 selections last season, 134 winners).

As for the time on a Friday afternoon when the prices are scraped by Football Data, I’m not sure. My guess is that it is probably later in the day rather than around noon, but that’s just a guess. I’ll try to find out. I’m not convinced that prices would actually move too much between noon and 5pm on a Friday given that most matches are still at least 24 hours away. There may be some volatility with the typical two or three Friday night matches though.

The member than asks a question about the Cassini Value Selections:

I'm just going to reverse the subject a little here. You mentioned in your newsletter a couple of potential value selections that didn't make your 10% edge requirement, at the time of writing. What happens if these elections drift into position where your 10% edge requirement is met on a Friday afternoon (Like Aston Villa nearly did)? Will they get recorded as official selections when you update your results?

As for the Cassini Value Selections, these are set in stone at the time the email is sent out. Potential selections are ones that subscribers might like to include, but they are not, and will not ever be, official Value Selections. 10% is my personal threshold, but others might have lower numbers, which is why I mention teams that are close to the 10%.

Similarly, if a Value Selection shows a 10%+ edge when I send out the email, it is a Value Selection regardless of what happens to the price later. This does leave me at the mercy of the market, but for this season at least, I’ll take my chances. Ironically, this means that if a selection drops to less than the 10% edge I am comfortable with, the bet was a good one, but my official results get screwed on the price!

As Graeme said in an email yesterday regarding his TFA selections “Before you know it, it starts to get very complicated and your results will look nothing like the results I’m posting”.

That’s ok though. I think everyone understands that the official results should always be the low water-mark. This is one issue I have with proofing. The very fact that a service is proofing, means that they have a vested interest in recording the best price that they can, since the only reason to proof is to attract new members. Proofing is meaningless to existing subscribers, because the 'proof of the pudding is in the eating', as some of us say – but not all*.  

Subscribers are already getting the selections and know exactly how good (or not) that they are. A service loses credibility fast if it records prices that are simply unattainable for all but the first few people to receive the selections, and in my opinion, a service should also tell subscribers what the true or minimum price for a selection is, definitely in volatile markets, and allow their subscribers the option of making an informed decision on whether the best price available to them is good enough.

* Note that this is the correct expression. Anyone who says the “proof is in the pudding” is simply demonstrating their illiteracy and, (while I usually hesitate to advocate physical violence, in this case I make an exception) should be soundly slapped.