Still The Best

Fizzer commented on yesterday's post:

Merry Christmas Cassini,

Just saw your latest update. I was about to send you a note saying how much I was missing your blog, still the best Sports Trading blog on the internet, but that I was having a BLU Christmas without you.

All the best - looking for the trend to continue tonight.

"Still the best Sports Trading blog on the internet". That's quite a compliment, but not an undeserved one in my, admittedly biased, opinion. As for the lack of recent updates, unfortunately I have been dealing with a few family issues, but for now at least, all is again well.

Despite the lack of recent posts, my hit numbers soared on Wednesday to a new record (938) for some unknown reason.

My excitement was somewhat dampened upon reading on the Full Time Betting blog:

Merry Christmas to all my readers old and new ( page counter shows 2892689 unique page views since 2010) so huge thanks to my mum who is clearly just refreshing the page 24/7.

Nearly 3 million! Puts my 1.1 million total since March 2008 in perspective.

It's also good to know that at least one reader (Fizzer) is following along on the BLUnders this season. We ended up with two selections last night, but took a small loss as they split, taking the record for the season to:

We go again tonight in Oklahoma City.

Cricket man Bossman megarain stopped by again to comment:

Merry Xmas.

It's likely we generally agree in the subject of hard work, and don't want to argue .. so, why am I arguing ?

Reading the Trading Bases book, its clear his strategy is modelled, whereas other sports clearly have data-mined advantages.

Each sport, is unique - not least, becos betting mkts/liquidity are different.

Anyway .. Have a Happy New Year .. and wish u all the best etc.

I would argue that no one is arguing here. Each sport is unique, and markets and liquidity are all unique too. Hard (or smart) work is an important ingredient, but you also need an edge to be profitable long-term.

Work Smart, Not Hard

Bossman megarain (possibly not his real name) has some thoughts on hard work versus an edge, concluding that you need both to be successful long-term. At least he didn't disagree with my assertion that any amount of 'hard work' can overcome a negative expected value (EV). Bossman writes:

I have no real wish to be a contrarian, aside from the joy it brings, to merely argue with others, but, I can sorta understand the advice Golden Fleece is giving.

Clearly, right-minded souls, will understand you need positive EV, on multiple outcomes, to base an (even, short-term strategy), which, given variance, even then, might not be profitable.

But, if you know there is no edge, you can work-around (and this is where the hard-work comes in).

I haven't looked at the offending post on the Betfair forum, not having been there in years, but .. providing the poster is genuine, which, is sometimes a stretch, then ..

By knowing you have no edge, you have done the 'homework', and maybe offer odds, which have positive EV, even if they reside, maybe in the 3rd Back or lay column, away from the market.

It maybe a long wait, and its time-consuming/hard work, to continually monitor/update positions .. but, it would be +EV.

As long as you have the knowledge, what an edge is .. and have the hard-work ethic, I think you can clearly still make (good) money in exchange betting. Logically, it has to be .. or, we would not be paying PC.

One of many amusing lines in my latest reading “Where Are The Customers’ Yachts?” which seems relevant to this discussion is this one:

“There have always been a considerable number of pathetic people who busy themselves examining the last thousand numbers which have appeared on a roulette wheel, in search of some repeating pattern. Sadly enough, they have usually found it.”

However much ‘hard work’ the roulette analyst puts in, they can never (long-term) beat the negative EV. Even if we allow for the possibility that a wheel might be imperfect, and a certain number or numbers offer a positive EV, this edge would certainly not be long lasting.

If you are making a long-term profit from betting on sports, you have an edge even if you do not realise it, unless you’re that one-in-a-million Lottery winner.

But what is ‘working hard’ though, when it comes to sports betting? It certainly shouldn’t be used to describe the activity of poring through gigabytes of data looking for patterns. Even if there were any edges to be found that way, someone or some entity with far greater resources than yourself would have found it first.

It seems to me that you need to work smart, rather than hard, to find an edge. You need to question conventional wisdom, look at assumptions from a fresh perspective and generate logic driven ideas for why the market, i.e. other punters, might not be correct.

Speaking of which, the BLUnders system continues to be profitable this season with the one Xmas Day selection - the Xmas night battle of Los Angeles between the Clippers and the Lakers - the most comfortable winner of the season so far, by a massive 29 points. Merry Xmas to us!   

At the risk of jinxing the current six game winning run, there is another qualifier in action tonight. 

With the Bundesliga now on their mid-season winter break, it's a good opportunity for an update on these systems also. As some of you will know, I have included the 2. Bundesliga this season and overall the two leagues combined are up 2.35 points from 89 selections, an ROI% of 2.64%. 

The less prolific Bundeslayawayga system combined over the two leagues is up 1.25 points from 22 selections, an ROI% of 5.68%. 

Delusions And Laws

Among much sensible advice from Ben Carlson, author of the book "A Wealth of Common Sense: Why Simplicity Trumps Complexity in Any Investment Plan" is this:

But there are also a large number of investors who are delusional, because they’re making the assumption that they’ll be the ones who can pull it off, when in fact only a very small number of people can. There’s a seemingly endless supply of investors out there who try again and again to outsmart the markets, but only end up outsmarting themselves.

The Urban Dictionary definition of "delusional" -"Someone who is not thinking clearly, or thinks something will happen that, in all likelihood, will not" - is perhaps a little kinder than some other definitions of the word, but the point is that investors expectations are often not realistic.

James left this comment on my last post:

It is interesting that many people who enter into sports trading do so to cut their teeth before entering financial trading. Some openly make it seem that financial trading is a man's game and their playing at being a sports trader is just child's play afore the main event. Can it all be ego?

You would think the daily reported financial scandals would make them wary of this "Man's World" that is financial trading but no, their one-man operation is the equal of any corporate/mafia concern.

You would also think their meagre bankrolls would be better suited to the capacity of sports trading where they are up against similarly sized bankrolls but they prefer to be kicked around in the multi-trillion "Man's Game". One chip against many deep stacks.

By my definition you are a "manual fundamental trader".

Yesterday's post referenced Joe Peta moving from Wall Street to sports trading, and Sammy moving in the opposite direction, but I really have no idea where most people start their speculating or where they end up. Sports trading is still a relatively new creation, but while there are similarities, the nature of sports markets is so different from the financial markets that I'm not sure it really offers much as an introduction.

As James alludes to with his reference to 'financial scandals', outsiders are never going to have an edge over those on the inside. Same with sports trading in events where someone is several seconds ahead of you. This is where the delusion comes in - how can your 'one-man operation' have any edge? Anyway, I've banged on enough about this in the past so I'll save my energy, but it really is nonsensical if you think logically about it. The problem is that people WANT to believe they can somehow be long-term winners, but wanting something very much doesn't make it true.

Another example of wishful thinking is this awful advice, posted by a Golden Fleece on the Betfair Forum:

An edge is helpful but not a necessity as hard work and discipline can overcome this.

Fortunately others are more clued in, with racingguru noting that:

You not only need an edge, you need to work to maintain it

and dlarssonf writing:

If you have no edge ( getting value ) you will not win long term, no matter how good your discipline is or how hard you work

The laws of probability don't suspend themselves because you want them to, which is probably why they are called 'laws'. 

Empty Guerdon

While I am not averse to the use of double-entendres in my blog post titles, any connection made between the subject of my 22 November post “Under-Taker” and my father’s current state of health, was quite unintentional.

Such a link would have been in extraordinarily poor taste, even for me, and James read more into that title than I had intended, but no harm done other than that I feel far less special as my blog is now merely a one-of-three for him, demoted from a one-of-two. I feel like Mrs. 7th Day Adventist whose husband has just announced that a new “sister-wife” has joined the family. I’ll get over it.

James’ comment was:

I am sorry to hear about your Pop and hope for improvement in his situation.

Also, I am sorry for flirting elsewhere but the double meaning of the title of your previous post meant that I didn't want to pry into your circumstances.

I think my "exclusive" reading list of three blogs has pretty much covered the spectrum of sports trading; theoretician, manual trader, algo-trader.

The good wishes are appreciated, but it’s probably no longer accurate to describe myself as a trader – manual or other. I learned long ago that I have no edge in financial trading, and while I clearly did have an edge in trading certain sports and events in-play for several years, opportunities today are few and far between. 

The trading landscape has changed. Some were efficient from the start, while others took longer to mature, but the competition has its act together pretty much everywhere these days, and while it is certainly possible to make money on any single event, the forces against which you are competing are likely too strong in the long term, especially if you are also fighting against the Premium Charge. The result is that most people spend an awful lot of time losing their money, at best, slowly, and for most of us, time is money. Bottom line is, it’s no longer worth it.

For financial investments, once reality set in that I have no edge, I have followed the simple advice to invest at least 10% of income in a diverse collection of low fee mutual funds and investment trusts and leave it alone. Although it was an appealing thought that somehow I could know more about the true value of a stock, commodity, currency or whatever than the thousands of professionals trading those markets every day, it was somewhat naïve. In my defence, it should be pointed out that the proliferation of books about how to beat the markets, how to trade like a professional etc. didn’t help, but as Fred Schwed Jr wrote:

“Probably no reader has ever been so rude as to enquire of a professional writer on financial matters why the writer, who clearly knows so much about money, is not rich. Nevertheless, many a reader probably thinks quietly about this.”

For sports trading, there is no parallel to investing long term, but punting (betting on an outcome pre-game, and letting it run) does at least share the benefit of saving that precious commodity of time. Waking up to an increased balance on your account and it’s easy to feel that you “have achieved life’s loveliest guerdon – making some money without doing any work”, which is another line from Fred Schwed Jr’s excellent 1940 book “Where Are The Customers’ Yachts?”. Of course, the real work of identifying an edge has already been put in, while placing the bet itself is the easy part.

Many of you reading this are undoubtedly familiar with Steve M (above) of Daily25. Initially famous for his large, at least by most people’s standards, stakes and unwavering commitment to following his strategies through both good times and bad, Aussie Steve has recently started to produce a weekly video update and is now achieving notoriety for the hairiness of his chest. If you’re into that sort of thing, I’d recommend checking out one of the earlier episodes as a number of complaints have resulted in Steve dressing rather more conservatively in his latest production. The concern for Steve appears to be that his ratings will plunge in sync with his neckline. Anyway, the weekly video is very watchable, with Steve coming across as a very straight forward and pleasant young man, although looks can of course be deceiving, (especially when it comes to Australians).

There are a couple of reasons why I mention Steve, and one is that this week he recommends a book called “Trading Bases” by Joe Peta and with the same book resident on my bookshelf, I can concur that it is a good read. The writer is a former Wall Street trader who made the move to betting on baseball.

The second reason is that Steve mentions a ‘fund’ based approach to betting. This is something that I have moved towards myself this year, with a number of systems across different sports being applied. I don’t believe Steve trades anything in-play – Australia has rules in place that make this very difficult – so his approach is by necessity similar to the one I am moving towards. Steve’s source for selections is from a number of tipsters, interestingly even when he doesn’t agree with their selections as he reveals in this week’s vlog. My selections come from my own research, with some of the systems shared here free of charge. While all the systems I use have a positive expectancy in the long term, the short-term can often be tricky, but by having several selection streams running in parallel, the profit line should be smoother.

Back to Wall Street, and I see that Betfair Tennis Trader Sammy has seen the writing on the wall for tennis trading. As I have written on many occasions, this link being one example, the chances of being profitable over the long-term trading court-sider infested sports are slim at best. Sammy's next project makes me wonder if the lesson has been learned though, as he writes:

You might wonder what my next adventure is? I've decided to try to learn a new game. And that's the stock exchange game. I've been grinding the Stockholm exchange roughly the last 2 months. My goal is to be break even for the first 6 months and anything better is just a bonus. It's a totally different beast the stock exchange compared to the sports exchange. But it's a lot of fun and I'm learning a lot of new things. We will see how it goes. =)

Good luck with that, but it's not a totally different beast in my opinion. As with tennis, Sammy will soon find out that there are plenty of people more knowledgeable, or at least with more current information, than him about the value of stocks traded on the Stockholm Exchange.

I'm not even sure why I am mentioning Wall Street and stocks this morning. Last week, in particular yesterday, wasn't a pleasant experience with Wall Street's worst week since August. As bad as the numbers were, it was arguably preferable to looking at Steve's chest though...

SLOvers

Sent as an email rather than as a comment was this idea from Phil:

BLUnders seems great... what about SLOvers?

Hi Cassini

Love the blog. Thought I'd just raise what (to me) is an obvious question. If BLUnders works, then assuming that bookmakers correctly price 50% of games to hit the over and 50% to hit the under, does betting overs when teams have no spread (pk) make money?

Love the input. An exchange of ideas is what this blog should really be all about. Limiting selections to games where the spread is zero means a very small sample size, somewhere around 24 bets a season.

Above are the results from the 2010 season on, one good season for Phil's SLOvers, but no evidence that there is any edge with this strategy.

If we expand the range of selections to include matches where the spread ranges from 0 to 2.5 points, the numbers for the last five years look like this:

Again, one good season, but the Over / Under ratio over these five full seasons plus 2015 is pretty close to 50:50 and we are looking for trends, not single season blips.

And Then There Were Three

My lack of posts in the past few weeks has unsurprisingly meant Betfair Pro Trader's eyes wandering, resulting in another blog being added to his previously exclusive list of two. Given James' fine taste in blogs, Trader247 is another one worth checking out, especially if you have an interest in bots.

My excuse for the lack of posts is that my father was re-admitted to hospital almost two weeks ago, and there has been a lot going on with blogging well down the list of priorities.

With trading opportunities limited, the quick and easy daily bets are proving their worth. I know at least one other person is now following the BLUnder System, and it has been on something of a roll this season with a record (including last night's win) of:

An unsustainable ROI% of course, boosted by a current winning run of six, but no one following will be complaining.

The Bundeslayga has also added a little of the past couple of weekends, with a more sustainable ROI on the season of 10.9%