Correction

Another disappointing day in the markets yesterday, as the markets move into 'correction' territory, my draw-down moves into six figures and my decision not to apply for early retirement is looking fortunate, if not prescient.   

As I said in my last post, perspective is important, and overall I'm back where I was at the end of November, which doesn't seem so bad. As Winston Churchill said:

The farther backward you can look, the farther forward you can see.

This tweet from a couple of days was rather bizarre:  

The sooner the market realises it is making a big mistake, the better! The trouble is, this is not how markets work. My Economics A Level was a few years ago now, but markets have never been so simplistic.

Before my last trip, I was looking at the EPL Draw, with games between the "Big 6" of particular interest after David Sumpter's observations that the:

"Draw in these big matches is value if greater than 3.2ish"

Previous posts have shown that using Pinnacle Sports closing prices, backing the Draw in matches featuring two Big 6 teams is profitable across the board.

Broken down by a number of parameters, here are the results for all qualifying matches, for Big 6 matches, for non-Big 6 matches, for a Big 6 team versus a non-Big-6 team, and for "Little 14" matches:

The edge for the Draw in Big 6 contests is clearly bigger than in other matches, (only one category sees the Big 6 returns beaten, albeit in a low sample size category) but there are some clear trends which apply to all matches.

It's unfortunate that there are only 30 Big 6 matches a season, but there are another 350 each year where the Draw still offers potential value.

Clearly it's not a smart strategy to blindly back the Draw in matches where just one of the teams is a Big 6 team for example, but certain matches between Little 14 teams show a positive ROI from a few hundred matches.

The premise that in matches between 'relatively' closely matched teams, the market underestimates the draw, appears to be backed by the evidence, at least in the EPL.     

There's one Big 6 match this weekend, Tottenham Hotspur v Arsenal, with Spurs currently at 1.952 with Pinnacle, and a 'true' price of 1.98 (currently 2.0 is available on the exchanges). 

Previous Big 6 matches where the win probabilities are approximately the same as this game show a profit from backing the draw of 3.84 points from seven matches:

For all matches of a similar profile, the profit is 21.31 points from 111 matches, an ROI of 19.2%.