Inevitable Profits

It was not the best of weeks for followers of the NFL Small Road Dogs system with the three selections all losing. I'm beginning to regret making my comment last week regarding the remaining selections that:

Even if all seven lost, we'd still have a healthy ROI.

The ROI drops to 16.15% with one week, and probably three selections, remaining in the season.

If you're following the Small Road Dogs in the NBA as I suggested last week, you're probably thanking me, in spirit at least, given the start to the season they have made - i.e. six winners from seven selections, with four more over the next couple of days.

In the Premier League we had plenty of Draws, which isn't unusual in the December part of the holiday season. Blindly backing the Draw gives a return of 3.78%, while limiting yourself to "Close" matches increases the ROI to 30% since 2000.  

I'll update the Draw numbers in a couple of days once Wednesdays games are complete.

A few days ago, I was kindly sent a copy of a book called "Inevitable Profits" written by Dave Holdsworth which he says: 

was inspired by David Sumpter's book [Soccermatics] and your blog 

Dave's approach is to: 

"look for systematic bias in the odds. We can do this by modelling the betting market rather than the underlying sport. Instead of trying to predict which team will win we can try to understand under what circumstances the bookmakers’ odds are skewed away from true, showing us where to bet."

Readers of this blog will understand why such an approach is music to my ears. 

Dave outlines a strategy based on the stage of the season, comparing results from different stages of the season, and finds some interesting trends.

I've looked at results by month before, and noticed some interesting trends, but Dave inspired me to drill down still further, and while my interest remains primarily on the Draw, I'll share some findings in the next few days.

With the US markets open today, no doubt many of you are happy with adding another 1.92% to your balances as Tesla climbed again. Just three days remain in 2020 and I'm pretty sure this will be another category ending the year with a healthy ROI!  

Tampa Raptors

I mentioned yesterday that paying attention to Time Zones in the NBA can make a difference to your bottom line. By way of example, backing Small Road 'Dogs ATS travelling across two or three time zones since 2015 have an ROI of -4.39%, compared with an ROI of 6.27% when playing within one time zone of home. 

The NBA is a little complicated, given that some Western Conference teams are located two time zones apart, while some Eastern Conference teams are in the same time zone as Western Conference teams. Also this season, the Toronto Raptors are not playing their home games in Toronto, but at least for the start of the season, will be playing in Tampa due to complications crossing the US-Canada border during the pandemic.

Obviously this is an issue which will impact the NHL more seriously, with seven of the NHL's 31 teams based north of the border. The schedule for the 2020-21 season, although as there are no games scheduled in 2020, it's really just a 2021 season. Opening games begin on January 13th and the league will reorganise to reduce travel and to avoid the need for crossing the border, all seven Canadian teams will play in a new North Division, with the 24 US teams divided into three Divisions of eight - East, Central and West. Next season there will be 25 with the new Seattle Kraken franchise. All regular season games will be Divisional, with the top four in each Division making the playoffs. The first two rounds of the playoffs will also be Divisional, all of which means that this season will be unlike any previous one. Whether trends will continue remains to be seen, but Road Favourites have been good since the league re-aligned in 2013:

In Divisional games this ROI decreases slightly to 5.2%, but by taking into account the previous result for both teams, the ROI can be more than doubled to 11.6%, with the only losing season being the last one.

Merry Xmas.  

Zoning Out

After Sunday's shock win by the New York Jets in Los Angeles, we didn't have to wait long for another double digit upset with the Cincinnati Bengals win over the play-off bound Pittsburgh Steelers on Monday night. The Bengals were getting 13 points, and won by 10.

It was opening night in the NBA last night with matches being played in the team's arenas rather than in the 'bubble' as at the end of last season, but with no fans.

Small Road 'Dogs have been profitable in the NBA for the past four seasons, and this is a trend I expect to see continue this season, based on the results in the NFL with reduced or eliminated crowds. I've written before about the effect of time zones on games in the NBA, and results can be significantly improved if you put in the time to differentiate between teams travelling from East to West versus teams playing within their own zone or travelling East.

Tesla's indexation slump continued yesterday, but the entire US market is ending the year with a whimper rather than a bang although today is trending higher.

Some of you may recall that a big reason why I invested in Tesla was because it was so heavily shorted. As I wrote in June 2018: 

However I do own some individual stocks, the most recent portfolio addition being that of Tesla last November.

The trigger was seeing articles about the company being the most shorted stock in the USA. Shorting stocks is a risky business, and the more I read, the more it seemed that there are several misconceptions about the company. I also happen to like CEO Elon Musk's sarcastic, flippant, sometimes rude, approach to those trying to spread a false narrative about him or his company.

So it was interesting to read on Teslarati.com that:

Tesla short-sellers are effectively admitting defeat after the company’s first trading days in the S&P 500 Index after new data from Ortex Analytics shows that short interest hit record lows.

At one time, TSLA stock was one the most-shorted stocks on Wall Street, but the company’s record year has had bears rethinking their strategy to put money on the downfall of the automaker, which has never really occurred.

Ortex Analytics has new research that shows that bets against Tesla have fallen to numbers that haven’t been seen since 2017. After an estimated $28.5 billion in losses, Tesla shorts are calling it quits on being bearish toward the stock. 

Toss-Ups and Teslanaires

After almost seven weeks stuck on just four selections for the season, we had not just one "Toss-Up" Draw selection but two this weekend, with Newcastle United v Fulham delivering for followers. 

The Away team was favourite in both matches, and since 2000 these selections have an ROI of 22.8% from 264 selections.

The NFL's Small Road 'Dogs also had two selections in Week 15, and both were winners, taking the season record to 33-20-1 (ROI 21.4%) currently the second best season since the league restructured.

2006's record is likely to survive given that we probably only have another seven selections this season and we'd need six winners, but we live in hope. Even if all seven lost, we'd still have a healthy ROI.

The biggest shock of the round was the New York Jets getting 17 points on the road against the Los Angeles Rams and winning straight up - their first win of the season. This was the biggest upset in the NFL since 1995.

Tesla made its debut in the S&P 500 today but it was an inauspicious start, although most markets were down across the board. A down day was to be expected after being purchased prior to indexation, as MarketWatch explains:

The reason Tesla stock is down Monday is probably because some index funds have already bought Tesla shares. With the buying done, there is a greater chance of some post-indexation dip might occur. It’s happened in the past when other stocks have been added to the S&P 500—although Tesla stock always seems to defy convention. Shares are, after all, up about 750% over the past year. 

A 6.49% drop wasn't what I was hoping though, but with with my gains at over 1,000% as of Friday's close, I think I can handle it.

The volatility of Tesla's stock price is likely to lead to the same in the S&P 500 Index, with an $11.11 change in stock price equating to a one point move for the Index. 

There was an article on Bloomberg at the end of last week, reporting on "Teslanaires", those people whose holdings are now, or were, worth over a million dollars.

Now Smith has joined the ranks of the “Teslanaires,” as some of the company’s investors call themselves, with a holding that he says has ballooned to over $1 million, fueled by a rally of nearly 731% this year as of Friday’s close.

If the company is to become a trillion dollar company, as many experts predict, the stock price will hit four figures, unless there is another split, and if it's to become a $2 trillion company as at least one investor predicts, the upside is even bigger. One to hold.  

Fools And Their Money

From Slate comes this article concerning the US Presidential Election: How Offshore Oddsmakers Made a Killing off Gullible Trump Supporters

The article focuses on the off-shore sportsbooks like Bovada and BetOnline but Betfair bettors will recognize much of the thrust of the article. And the nonsense continues. If you search Twitter for the words "Betfair" and "Trump", it's an experience in equal parts amusing and sad. 

“We’ve got people living in two different realities politically, and we’ve got people betting in two different realities,” Sherwin says.

One would think that after their theories and expectations are shot down one after the other...

...that at some point they would realise that they are swallowing arrant nonsense, but there seems to be an inexhaustible supply of excuses and new justifications for why Trump will prevail and their putting their money where their loud mouths are:

“Trump supporters are loud,” Morrow says. “They love Trump in a way that most candidates are not beloved, but they also represent the demographic of a lot of sports bettors. These are people that are 18 to 45, generally white male.”

Also, consider that Trump maintained that he could not lose this election, at least not legally. If he lost, he signaled, he would lean on Republican underlings and judges to flip the result. (He then did the leaning, if not the flipping.) Only a quarter of Republicans, even by December, believed Biden’s win was legitimate. On Tuesday, a day after the Electoral College voted for Biden, people were still backing Trump on PredictIt, a predictions market, meaning anyone who wanted to could make free money betting on Biden.

What is very clear is that the "Wisdom of the Crowd" theory doesn't apply with this crowd. In conclusion, the article has this to say:

Trump supporters were doing it to themselves. It’s not the sportsbooks’ fault if someone doesn’t realize that businesspeople aspire to separate customers from their money.

The sportsbooks won untold millions off a political movement’s refusal to accept reality. It wasn’t the oddsmakers’ plan to win by such large margins, and doing so despite making Trump a relative favorite was largely good fortune.

The 2020 election had many losers: Trump, his supporters, and American democracy chief among them. But almost by accident, the race created huge winners beyond Joe Biden. The biggest, arguably, were based not in Washington but in places like Panama City, and entirely unregulated by the government Biden was elected to lead.

Close Draws and College COVID Caution

While the Fulham v Brighton and Hove Albion game did stay outside the "Toss-Up" range, it was a qualifier in the "Close" category and finishing as a perfect Draw stopped the losing sequence for "Close" bets at 17. 

With only 27 Draws in the EPL so far, the strike rate is one of the lowest (fourth lowest in the EPL era), due to the highest rate of goal scoring in the top tier since the swinging '60s. 

There's a long way to go this season, but the Away wins are on course for a record season, currently over 40%, far higher than the previous record of 33.68% set a couple of years ago. First goal-line technology and VAR, and now no home crowds, and Home advantage seems to have vanished entirely.

The median fair price of 4.07 on Draws this season is much higher than pre-COVID's 3.67, so even when there have been Draws, they have tended to be longer priced. The second longest priced winner was the 12.6 for the Manchester City v West Bromwich Albion game at the weekend where Manchester City were the 13th team to be sub 1.10 and the third to fail to win at that short a price. 

With all the uncertainty caused by COVID-19 at the start of the College Football season, I decided not to spend the time on this sport this season. 

With a lower profile than the professional major sports outside the US, it's often not always the easiest sport to get a bet on, even if you focus on the 'bigger' Division 1A matches, but the challenges of COVID seemed to me to make this 'amateur' sport even more likely than the pro sports to be seriously impacted. 

The players are technically students, and it seemed to me that even if games went ahead, there was a decent chance that key players would be missing and without crowds, it would all be a bit of a lottery, and I don't like betting in such circumstances. College Football, unlike the NFL, has no requirements on teams to produce injury reports. 

Over the years, as in the NFL, Small Road 'Dogs have performed very well, until this season as seen in the chart above. Winners have exceeded losers for 19 consecutive seasons, although three seasons would have resulted in a loss backing at 1.952, but this season so far, it's a different story. 

The five-thirty-eight web site has an interesting article on the 2020 College Football season which is worth a read. The title is Losing Money Betting On College Football This Year? You’re Not Alone.

It was a quintessential 2020 college football betting story. During a season that we weren’t sure should have been played, things have been rendered even more complicated for people outside the game, whether they’re just betting for fun or rely on it to make a living. Results like this go beyond tough beats and into a realization that, in yet another way, this year is not normal. The sport has been uniquely difficult to predict for those trying to find a reliable edge.

Sometimes, the decision not to get involved is a good one.

Silly Rules

The big news is that Betfair's US Election markets have finally been settled. The Electoral College (EC) met yesterday, and as soon as California had cast its 55 EC votes and took Biden's total over 270 around 10:15pm, the markets were suspended and settled surprisingly quickly afterwards. I thought it might take a few hours to run the settlement program for a market that had been open for a few years and had almost £1.7 billion traded, but the winnings were in the account and the statement within minutes, although it did take a little longer to show up in the P and L page. 

I was keeping an eye on the six states that Betfair had yet to settle, as I had open bets in those markets, and after seeing that they had all cast their votes as expected, with not a single 'faithless elector' this year, I saw a Tweet misleadingly saying that electors in Nevada had voted for Trump. The account was a right wing site, which a discerning person would soon dismiss out of hand, but incredibly many people not only believe this stuff without question, but were prepared to put their money down.

Only six EC votes were at stake, so there was no danger to Biden's win, but it was potentially serious for Nevada Democrat backers, even though settlement should have been based on the 'projected' EC votes rather than actual. When I looked at the market on Betfair, 1.04 was available, but I asked for 1.05 and 1.06 and both were matched, literally three minutes before the markets suspended.

Twitter, after settlement, was an interesting place. Not just a few, but many people seemed genuinely shocked that Biden was the winner. Many had clearly not read the market rules. i.e. 

"This market will be settled according to the candidate that has the most projected Electoral College votes won at the 2020 presidential election. Any subsequent events such as a ‘faithless elector’ will have no effect on the settlement of this market."

Many also had no idea how a betting exchange works, and the number of people who still think Trump has a path to victory and will thus be the Next President is both astonishing and disturbing. 

No one was able to explain why, amidst what would have needed to be a multi-state coordinated conspiracy involving hundreds of people, no evidence had been found and presented in court in the six weeks since the election. 

Neither common sense nor Occam's Razor were anywhere to be found. Just lunatic after lunatic spouting nonsense about January 6th when the Congress meets, or that Trump would soon be announcing another election (he doesn't have the authority), declaring martial law, or "fraud is covered under the twelfth amendment" (it isn't). Crazy stuff, and you almost feel bad taking their money. At least I can see now where the money backing Trump was coming from.

As Biden will be inaugurated in January anyway, all this protesting is moot, but they really do seem to believe that Trump can stay in office, coming up with all kinds of bizarre theories that just have no basis in reality. 

There was soon a Facebook page for Australian / New Zealand punters who backed Trump on Betfair, and likely a UK one will follow shortly, if not already.

Plenty of screenshots of conversations with entry level help desk employees trying to end the help chat as fast as possible, which would seem unlikely to take precedence over the rules for settlement which have been present since day one of the market. If anyone has experience of dealing with any Help Desk, not just Betfair, you'll know that these aren't the sharpest and brightest of people. 

Some people appear to have literally been physically affected by this, for example::

I have a feeling this topic will provide entertainment for a while yet. There is always the USA - Trump Specials - Trump Exit Date 2 market which currently has 2021 priced at 1.04/1.05. Come on Trump fans, if you're sure he'll overturn this election result, then a lay at those odds will make you incredibly rich, but do check those silly rules this time. Use a magnifying glass if necessary. It could save you some money.

Who bets or enters any financial transaction without reading the rules? Caveat emptor as we say in Rome. 

Oh Come All Ye Faithful Electors

Another winning week in the NFL with the Small Road Dogs. A win in the early slate of games for the Denver Broncos, while in the afternoon games the Washington Football Team were the second winners of the day. Both teams were getting three points. In the Sunday night game, the Pittsburgh Steelers were getting 2.5 points and lost miserably but a 2-1 record is more than acceptable, taking the season record to 31-20-1.

There is a Thursday Night game this week which is currently looking like being a qualifier - San Diego Chargers +3.5 in a Division game against the Las Vegas Raiders.

While technically it was a Home game for the San Francisco 49ers, due to COVID-19 restrictions, the Washington game was actually played in Arizona, in the Arizona Cardinals home stadium. Teams playing "Home" games in another team's home NFL stadium are now 1-6 since the AFL / NFL merger in 1970. Probably not surprising that such a move is more impactful to the nominal Home team than to the Away.

The Washington Football Team was previously known as the Redskins, an offensive term which was belatedly done away with in the Summer, and it was reported last night that the Cleveland Indians are about to announce that they too will finally be renaming.

No "Toss-Up" matches in the EPL this weekend (again) but there were two "Close" matches that ended up 'close' but no Draw. A full round of midweek matches ahead, with Fulham v Brighton and Hove Albion currently just outside the "Toss-Up" range.

With the Electoral College meeting today in the US, and the rules stating that "subsequent events such as a ‘faithless elector’ will have no effect on the settlement of this market", Betfair should be settling in the next few hours. Biden can no longer be backed at 1.03, with the price shortening over the weekend to 1.02 after the remaining legal case in Wisconsin was thrown out, as have about 56 other cases. It's hard to keep track.

The confusion Betfair caused by naming the market "Next President" is clear, with several Twitter users convinced, based on 'information' garnered from conspiracy web sites, that Trump has a real chance of winning and that they would be paid out. I almost felt bad taking their money, but I got over it. The market has now traded over £1.67 billion although according to Jon, Biden backers are up against "God", although he curiously doesn't specify which one. Presumably the one his Mummy and Daddy told him about and he fell for it:

Other, absolutely delusional, comments from the thread above (cosmetic changes to spelling and grammar):

I got 28/1 but have never placed a bet before so not a clue what I’m doing

Just got my salary 1k for Trump, convinced my gf for £500 for Trump. Tried to get a loan but the bank will not let me

Bet on Trump. Won't regret cuz he already won

I had it at 30-1 with them last week. A month or more back I had 11-8 and the 4-1 so this new price is still very good. He won't lose will he? I've got nearly £5k potential winnings. C'mon Trumpy

I’ve got a few bets on at different prices, £5,500 when trump wins

Better 18:1 than nothing. Look at what you can gain not what you missed out on.

I had an argument with Coral because they have put out that Biden won so I said when Trump wins I want double my winnings

Do you think when the election result is confirmed as fraudulent that all bets will be classed as null and void and we’ll only get our stakes back? I’m hoping not as my bets on Betfair are for the ‘next president’ so technically they should pay out when Trump enters a second term.

I put £100 on 23/1 a couple of days ago. A Trump win is looking more and more likely.

Went all in when odds were lower but still got 17/1 ish!

Hopefully by Tuesday morning, all this nonsense will be behind us. I guess we should be happy there are such people happy to divest their money like this, but it's terrible for the future of democracy which requires an informed electorate to work, and clearly these people are not well informed whether it's about Trump or the realities of Brexit for that matter.

$TSLA had another positive week, closing at $609.99 (+10.90) after reaching a new high on Wednesday at $654.32. Tesla now has a higher valuation than Warren Buffett's Berkshire Hathaway, and there are suggestions Mr. Buffett might be the 'mystery investor' buying up millions of shares, but while he does like the premium brands such as Apple, Coca Cola and American Express, and Tesla certainly fits that bill, he's also a value buyer, and Tesla could hardly be considered a value buy. On the other hand, with Buffett's long standing philosophy of not investing in companies whose business he doesn't fully understand contrasting with Apple now being $BRK-B's biggest holding, perhaps at 90 years old, Buffett isn't doing so much stock picking himself these days, but starting to hand over control to his successors. 

The Lost Notes of 1937

The Junction, fka The Wheatsheaf

Working on one of the side projects I mentioned last Sunday, I came across this reference on the topic of home advantage, or more specifically of crowd impact, from October 1937 when it was announced in the Surrey Mirror that:

Mr. F Judd, of Watford, is coming to speak at the next meeting of the Branch [Surrey Society of Association Referees] at the Wheatsheaf Hotel on Friday next, October 8th. The meeting will start at 7:30pm, sharp. as Mr. Judd has a long journey to make. it should be a highly interesting meeting, for Mr. Judd is just entering upon his 26th year of active refereeing in various classes of football. He is the retiring chairman of the West Herts Referees' Association. His subject is particularly interesting, "the effects of the crowd on the game".

Indeed, and I was rather excited to find out the details of this talk, but sadly three weeks later, the same correspondent reported that:

Some notes which I understand were sent me regarding the referees' meeting at which Mr. F Judd spoke on the effect of the crowd on the game, appear to have gone astray, so I must just record that it was a satisfactory meeting and proved very edifying, not only to the referees themselves but also to a number of visitors. Incidentally, the referees are still waiting for a spectator to speak to their January meeting on the effect of a referee on the game, and if one does not materialise soon, Mr. Bish. the Hon. Secretary of the branch, tells me he will have to fill the date with some other subject.

The attempt at humour did little to ease my disappointment at missing out on Mr. F Judd's insights. It may have been a satisfactory meeting, but the loss of notes from it is anything but satisfactory when you're prepared to go to these lengths to find an edge. 

The NFL continued to be lucrative this weekend with the two Small Road 'Dog selections - Detroit Lions and the Cleveland Browns - not only covering the spread, but winning outright. Officially the Browns were a +4 selection, but I had them at +5.5 before they shortened, which is always a good sign. 

The 2.08 on the Lions was also a nice bonus. The season record for this system is now 29-19-1 and as of today, we look to have ten more selections this season before the expanded play-offs begin.

No "Toss-up" EPL Draw selections again, and although this system doesn't generate too many selections at the best of times, with only four so far, it's certainly behind schedule. 

In the meantime that 65.7% ROI looks impressive even if it will ultimately drop, although usually this system ends the season in positive double figures as shown left. 

The NBA is back, with pre-season games starting this week, which will make the weekdays a little more interesting. The 2019-20 season saw the rate of increase in points per game slow down, increasing by just 0.5% from 222.4 to 223.6. Up just 0.3%, the number of possessions also remained about the same as the previous season, but the number of 3-point attempts increased by 6.6%. Of course, the regular season wasn't completed, but 86% of matches were played so using these numbers isn't too much of a stretch. Backing Overs in games where the total is greater than 224 points looks like a good place to start the season. 

The Lazy Way to Grow Wealth

One of the trading accounts I follow on Twitter is Joseph Burns, and he recently posed the question:

What's the worst trading advice you've ever received?

One reply suggested index funds, because:

it is not an 'advice'. For a finance person, it is nothing but a lazy way to protect their skin and escape accountability.

I have a few issues with that response. First, the idea that this is not advice. 

Advice is defined as "guidance or recommendations offered with regard to prudent future action" so what else suggesting index funds could be isn't clear. 

There could be a language issue here, so I'll move on to the more important piece of the response, and the idea that passive investing in index funds is "lazy" and a way to "escape accountability".

Passive investing takes up far less time than active investing, but that's a key part of why passive investing is best for most people. Does that mean it is "lazy"? I wouldn't say so. It's certainly "easier" and "cheaper" but there's an opportunity cost for the time spent trying to beat the indexes, and very few people can do this in the long run anyway. And it's not only the time that costs money, it's the higher fees, transactions costs and expenses that also reduce the viability of active investing.

Is betting-and-forgetting a lazy way of making money on the betting exchanges? It's certainly a better use of your time than wasting hours watching a sport for a value opportunity that a) may rarely present itself, and even if it does, then b) you would need to react fastest to benefit from it anyway. 

As for escaping accountability, I'm not sure this applies to most of us since we are accountable to no one but ourselves.

As readers will know, as much as I recommend index funds, I'm also not averse to playing with some individual stocks such as Tesla, which I may have mentioned here once or twice, plus other mentions earlier this year such as Lloyds Bank, Boeing and Pfeizer, all of which since they were bought, are currently up by more than my index funds at +21.6%, +47.6% and +18% respectively. At 9.65%, my active stock trading account is just under 10% of my net worth, which seems about right, but for most of us, investing in index funds is good advice.

After Hours

Week 12 in the NFL was already off to a winning start with the Washington Football Team's win in Dallas on Thanksgiving, and Sunday saw two more wins and one loss for the Small Road 'Dogs taking the season record to 27-19-1, an ROI of 14.3%.

As a bonus, we also had the New Orleans Saints comfortably defeating the Quarterback-less Denver Broncos, recommended at -14.5 although the line did move to -15.5 by kick-off. 

Although overall these big (two converted touchdowns) favourites aren't anything to get excited about, as is often the case, when you drill down a little, you find market inefficiencies.

Overall their record since 1991 is 72-74-2 ATS, but they have a 72.2% record when the Road team is favoured, and an 88.9% record when it is a Divisional game. 

We have a rare Wednesday NFL game this week with the re-arranged Pittsburgh Steelers v Baltimore Steelers game now scheduled for tomorrow. The opening day of the 2012 season was moved to a Wednesday for political reasons (President Obama was speaking) and since at least 1991 that is the only other instance of a Wednesday game. The Steelers play on a Monday afternoon in Week 13, and the Ravens move to Tuesday, only the third time that a Tuesday has seen an NFL game.  

Another big move for $TESLA stock last night after the markets closed, with the announcement that: 

“S&P Dow Jones Indices (“S&P DJI”) has determined it will add Tesla to the S&P 500 at its full float-adjusted market capitalization weight effective prior to the open of trading on Monday, December 21, 2020”

It had been expected that Tesla would be added in two tranches, but the decision is to do it all in one. 

Something I don't think I've written about before, I may have in which case it won't hurt to repeat it, is how much difference there is in stock returns when investing during the trading day, and when investing after hours.

Basically two strategies were compared. The Regular Trading strategy was to buy at the open and sell at the close; the After Hours strategy was to buy at the close and sell at the open. The Index used was the S&P 500, and with the market only open for 6.5 hours a day (32.5 hours a week), leaving 135.5 hours a week for After Hours, you probably wouldn't be surprised to find more than 80% of the gains happening when the markets are closed. In fact:

Had you only invested in the After Hours strategy by buying the close and selling the next open, you'd be sitting on a solid gain of 722%. Had you done the opposite, however, and only invested in the Regular Trading strategy by buying at the open and selling at the close, you'd actually be down 8.5%.

Of course it is impractical to keep selling and buying each day, so buy and hold is the best strategy.  

With November now behind us, although the month finished with a five figure loss, the month overall was a record one both in percentage (9.41%) terms and actual money. The previous monthly record of 9.3% was set in April as markets bounced off their COVID-19 lows, and the YTD number is at 19.23%, a little shy of 2019's 21.87% with one month to go. 

As mentioned previously, with some of the US Election markets not yet settled, November's numbers are in fact a little lower than they should be, but December will get the boost instead - assuming Betfair don't keep dragging settlement out until inauguration day on January 20th.

Denver QBs Zero, Observers Nonzero

Apparently the decline in output from this prestigious blog has resulted in formerly regular readers forming new, and bad, habits including not checking in on a daily basis. As unacceptable as this is, I must take some responsibility because with most of my favourite (from a betting perspective) sports in their close season, and NFL teams playing weekly at the most, there's not been a huge amount to write about. 

Add in a work trip this month, which looks likely to be the last one for at least a couple of months, a couple of side projects which I have found myself pursuing, and the result is fewer posts.

In my defence, the decline is more perceived than actual with the number of posts this year already at 125, including this one, which surpasses the totals of both 2018 and 2019. Nevertheless, I shall try todo better.

Some of you may have seen the line move in the Denver Broncos v New Orleans Saints game. The opening line favoured the Saints by 6 points, but the news that all four Broncos Quarterbacks are out has meant that line has now moved to -14.5 making them the fourth biggest road favourite in the last 15 seasons. The other three all covered the spread in case you were wondering. Some sportsbooks have circled this game, but at the time of writing Pinnacle are still accepting bets. 

How, you may ask, did Denver end up in this predicament? Per Adam Schefter of ESPN:

QB Jeff Driskel tested positive for COVID on Thursday.

 

Drew Lock, Brett Rypien and Blake Bortles did not wear masks, per a source, and were deemed high-risk close contacts today. They now are out Sunday.

Here is where I would normally take the opportunity to point out that John Elway (President of Football Operations) is a well known Republican which may have been a factor in the mask debacle here, but Elway has shown a positive attitude towards understanding the racial injustices in the US so I'll be kind:

"I've spent the last week listening and learning from the players and coaches on our team.

"What I've heard from the players in particular—and watching the way they lead during this time of need—has been moving. I always thought that since I grew up in a locker room, I knew everything there was to know about understanding teammates from different backgrounds and walks of life. What I've realized is that I could not have been more wrong. Listening to the players and reading their social media, the strength they have shown and the experiences they have shared has been powerful. It has impacted me. I realize I have a long way to go, but I will keep listening and learning. That is the only way to grow. I truly believe a lot of good will come from the many difficult conversations that are taking place around our team, league and country.

The Betfair Forum has some long threads on the subject of when the US Election markets, notably the "Next President" market might be settled, and in particular plenty of people who are not happy with Betfair making up new rules as previously, and specifically, excluded "subsequent events" unfold.

One user suggested:

It's like backing the winner of a horserace and then being told by the bookie that you cannot be paid until the vets have examined the horses, and confirmed that as no doping or other fraud took place the result can stand, subject of course to any subsequent legal objections to the winner.

He's not far wrong. It's as if the horse race rules said:

"This bet will be settled with the winner the first horse past the post. Subsequent events such as an objection or positive doping test will have no effect on the settlement of this market" 

Biden's My Boy wins by 20 lengths, but the owner of runner-up Racist Donny doesn't like losing and immediately signals his intention to form a crack legal team to be led by Rudy Giuliani and files an objection. Betfair consult with their own crack team of lawyers and announce that they have decided to wait until the objection is heard. The objection is over-ruled. The horses never came close to each other, at least not within six feet, but another objection is filed. Giuliani, tucking in his shirt, says they have heard about a massive fraud that needs to be fully investigated. No evidence of course, but it possibly involves 5G technology, pyramids and men from Mars. 

No, wait! None of my horse's fans were allowed in to see the race!

Status: Denied. The Trump campaign later admitted that there were a "nonzero number of people in the room" observing the vote count, including some affiliated with the campaign. Judge Paul S. Diamond shot back, "I'm sorry, then what's your problem?"

The problem is that he can't handle losing, and it's not even as if it is close.

From the Washington Post:

The facts were indisputable: President Trump had lost.

But Trump refused to see it that way. Sequestered in the White House and brooding out of public view after his election defeat, rageful and at times delirious in a torrent of private conversations, Trump was, in the telling of one close adviser, like “Mad King George, muttering, ‘I won. I won. I won.’ ”

However cleareyed Trump’s aides may have been about his loss to President-elect Joe Biden, many of them nonetheless indulged their boss and encouraged him to keep fighting with legal appeals. They were “happy to scratch his itch,” this adviser said. “If he thinks he won, it’s like, ‘Shh . . . we won’t tell him.’ ”

Only on Nov. 23 did Trump reluctantly agree to initiate a peaceful transfer of power by permitting the federal government to officially begin Biden’s transition — yet still he protested that he was the true victor.

The 20 days between the election on Nov. 3 and the greenlighting of Biden’s transition exemplified some of the hallmarks of life in Trump’s White House: a government paralyzed by the president’s fragile emotional state; advisers nourishing his fables; expletive-laden feuds between factions of aides and advisers; and a pernicious blurring of truth and fantasy.

Though Trump ultimately failed in his quest to steal the election, his weeks-long jeremiad succeeded in undermining faith in elections and the legitimacy of Biden’s victory.

As I've said before, it's the principle that Betfair are establishing here that is worrisome. Having funds tied up for a few more days is slightly annoying but it isn't a big deal.

What's the worst that could happen? Say there are enough faithless electors to give Trump another term. In this event, Betfair would have three options

1. Settle the market as a win for Trump. Not going to happen since millions were put into the market where the rules clearly stated that "Any subsequent events such as a ‘faithless elector’ will have no effect on the settlement of this market". I imagine some fairly large bets were placed and a lot of unhappy customers would take legal action.

2. Settle the market as a win for Biden. That wouldn't be a viable option having refused to do just that when they should have, and with Trump heading for another term.

3. Void the market. A billion pound market? Maybe, but that would be a PR disaster as well as costing Betfair some money.

The most likely outcome is that Trump's legal efforts continue to be denied, thrown out, withdrawn etc. (you'd think they'd have fired their best shots by now, if they had any), and the Electoral College process sees Biden elected on December 14th with close to 306 EC votes, and Betfair settle the markets breathing a huge sigh of relief in the process.

I think they chose to milk the uninformed Trump supporter for a few more weeks at the expense of the integrity of the market, and having waited too long (unlike other sites who settled much quicker) painted themselves into a corner. Very poor from Betfair, and I'm usually one of their biggest fans.   

Anyway, following my established accounting process, the profits will now be booked in December with November's numbers including the worst case scenario, which is a four figure loss. We still have one trading day to go in the month, and I'd hate to jinx it but as things stand, this month has been the single most profitable one of my life. 

$TSLA

The continued gains in Tesla, (first mentioned in this 2018 post) have of course helped significantly, with the stock soaring another 50.95% just this month, in part at least on the news that the company will be joining the S&P 500 Index. 

Readers will be aware that I first mentioned this possibility back in July when $TSLA was trading at (price adjusted to account for the split) $308.93 and hopefully someone saw what I did and took advantage of the opportunity as it is up 89.6% since that post. 

Aside from Tesla, which closed at $585.76 on Friday, the stock market overall has been good this month. Hopefully some of you took my advice in 2018 and invested in US funds.

A quick calculation shows that an investment of £100 in each Index Fund at the end of 1999 would now be worth just £91.88 for the FTSE100 and £247.63 for the S&P500. These are quite shocking numbers actually, as is the fact that the FTSE100 is on track for its worst year since the market crash of 2008. 

A solid December, and it'll be a record year, which is not something that looked likely on March 23rd when I was 20.4% off my all-time high. 

Finally, a word of caution about small sample sizes. Just because a "big favourite" (in this case we are talking about the EPL where "big" is under 1.5) has a few losses in the opening 14 matches of a season, doesn't mean the markets are suddenly offering you value to lay them. The favourite-longshot bias means you'll lose your money more slowly by backing such selections.

It's true that seven of the first nine teams priced shorter than 1.5 this season failed to win, but since then, there have been six consecutive winners.

In the Pinnacle era (2012-date) your ROI would be -0.3%. 

When presented with some statistics pointing out the nonsense of this idea, the response was:

On the other hand, I am sure -6% ROI for the last 10 seasons is better than many of of us had.

I did point out that an ROI of -6% in a 103% overround market was actually pretty bad and hopefully the idea that laying favourites in the EPL is profitable is being reconsidered.

Unsettling

Some news last night regarding the Billion Pound Betfair "Next President" market, with Betfair essentially announcing that they are now no longer settling the market based on their rules.

Naming the market "Next President" may be the root of the issue, because it is actually a misnomer since, per the rules of the market, the bet is actually for "Who will be elected to be the next President of the United States of America as a result of the 2020 presidential election?"

Reading the Betfair Forum, it's clear that at least some people investing in this market thought they were betting on the actual Next President, and not on the '2020 presidential election' winner. 

Betfair's rules also clarify that "This market will be settled according to the candidate that has the most projected Electoral College votes won at the 2020 presidential election. Any subsequent events such as a ‘faithless elector’ will have no effect on the settlement of this market."

The projected Electoral College vote count is 306 (Biden) to 232 (Trump), so why haven't Betfair settled the market? 

Well, only they know for sure, but clearly by their own rules, they should have settled by now.

The Trump campaign's continued efforts in the courts are a "subsequent event" as key states such as Georgia, Michigan and Pennsylvania have already certified their results, yet those markets remain unsettled. 

The Trump campaign has no evidence to support their sweeping claims of voter fraud and with election day almost four weeks ago now, it seems unlikely that any evidence will come to light in the future, but logic and common sense don't seem to be an attribute found among Trump's lawyers or his supporters. It's all a show for his base (64% of uneducated whites) as Trump fights to keep his fast sputtering "populist" movement alive. 

I suspect the reason that the Betfair markets remain open for some states, including the certified states listed above, is that were they to settle these markets, they would have no reason to not settle the "Next President" market which, at the time of writing, has lots of money available to back Trump at 19 and Biden at 1.05, and there is commission to be had. 

Betfair's latest statement reads:

A statement that clearly contradicts their rule about "subsequent events" not having any effect on market settlement, and wouldn't it have been better to consult these "leading U.S. lawyers" while setting up the market rather than 24 days after the polls have closed? And since "subsequent events" have no effect on settlement of the market, couldn't U.K. lawyers have given an answer?  

It's all rather poor from Betfair, and while waiting a couple more weeks isn't a big deal for me personally, I imagine that for many, it is a big deal. There is no way that this market can be settled as a Trump win (given their rules) and the chances they void a billion pound market are nil, so basically they are taking advantage of the uneducated Trump supporter (sadly, there are a lot of them) who, based on their "news" sources think he has a legitimate chance at being the "Next President". He doesn't. The market should be settled now. 

Thanksgiving Thoughts

On the Betfair Forum, Souldancer wrote that:

The average racehorse punter gets 75% of their stake returned.

If you put the work in it's not hard to change the racing loss into a profit.

Even if this number is anywhere close to correct, and I'm pretty sure it's nothing but a wild guess, you would need to put in a hell of a lot of work to overcome a -EV of 25%. 

You would also need to be an incredible optimist to even attempt such a task, given that this is probably about the worst handicap in betting to try to overcome. Even a single zero casino roulette gambler only faces a house edge of 2.7%.

With it's multiple possible winners, and vulnerability to inside information, Horse Racing isn't the easiest of places to find winners, but in sports betting, there are many 50/50 propositions and as I've written before:

I can't be sure, because it was a few years ago that I first read this book, but this may have been when I realised that betting the 'dime line' (i.e. Pinnacle's 1.952) on 50/50 bets, winning just 51.23% of bets would result in a profit.

Given that my grandmother would be expected to pick winners at a rate of around 50%, and she's been dead for over 30 years, this didn't seem to be a hugely impossible task. 

It's not as easy as it might seem of course, but as explained above, you're not betting against a sportsbook with otherworldly powers of prediction. You are betting against other members of the public, and in some markets more than others, the public aren't too smart.

If Grandma can get a return of 97.6% blindly betting say Overs in the NBA, doesn't it make more sense to focus your efforts on turning 2.6% of those losers into winners and start making a profit? 

Over 1,000 bets, you would need 513 winners to be profitable, which is a lot easier than overcoming a massive 25% disadvantage.    

Followers of the Small Road 'Dog System will have enjoyed an easy Thanksgiving Day win by the Washington Football Team in Dallas yesterday in their Divisional game against the Cowboys. This takes the season win percentage to 58.1% at 25-18-1. This result was the second most comfortable win of the season, and with four possible qualifiers this weekend, let's hope it augurs well.

Meanwhile in the US, the Betfair market for Next President surpassed the billion pound mark earlier this week, and Biden is still available at 1.07 which is incredible value if you don't mind tying up your money for a few days. The Democrats are also still available to win in some states such as Pennsylvania (again 1.07), a state which certified its results earlier this week as has Michigan (also 1.07).

Finally while doing some research for another project, I came across this comment about "Home" advantage in football from 1920:

That 'two goals' seems a very precise estimate with not even a mention of goal expectancy, but 100 years later and with no crowds and VAR, Away teams are actually winning more games than Home sides in the EPL, a trend many of us hope will continue today.   

Bet, Forget, Enjoy Life

Another work trip just wrapped up, and hopefully the last one for a few months. While I was away, Jackson wrote to me asking:

Hello Cassini. I have been looking for a piece you wrote on the benefits of bet and forget in comparison to in play betting without success. Kindly assist. I am an avid reader of your articles and also a pro punter. Many thanks.

It's a topic I've covered on many occasions, and I can't say I recall a specific post on the topic, but my immediate response was that:

Basically the benefits are that you don’t waste your life watching hours and hours of sport! If you have a few proven systems, although no system should last for ever, it’s far better for most of us to place our bets and get on with life, although in lockdown maybe that’s not such a great argument!

Another consideration is that pre-event, you have time to do your research, and invest an appropriate amount at the best prices available to you. When you are in the middle of an event, it is harder to think clearly with fewer options for placing your bets, as well as prices and events changing in real-time, which increases the chances of bad decisions and taking poor value. There's no stress placing bets pre-game.

The only way you are ever going to get good value when an event is in-play is either to get your data before anyone else (think courtsiders at tennis or cricket matches who are paid to transmit live data) or to understand the event better than anyone else, which is highly unlikely or you'd be very wealthy indeed. 

If someone is paying for this data, it doesn't take a genius to work out that it has value, and by definition once that value has been taken, there is none left.  

You are not going to make any money from watching say a football game, seeing a goal scored after a certain number of minutes, and based on historical records, having a bet.

If you think you can read a horse race better than anyone else, well good luck with that, because apparently everyone thinks they possess the same talent.  

You're wasting your life for one thing, and completely misunderstanding that the markets know the true price for all these scenarios. In the rare event that the market doesn't know, perhaps some South American third division match is in play late at night, then there usually won't be enough money in the market to make it worth your while. Occasionally there might be, but the risk is you end up spending half your waking life waiting for such rare opportunities.

As I've written before, in the early days of Betfair, it was almost easy money to trade some sports in-play, but after several years the liquid markets are now much more efficient. The introduction of the Premium Charge was the killer for in-play betting, at least for me, and it's so much calmer and less time consuming to take a look at the lines and prices as close to the start time as possible, and bet according to proven strategies.

Writing this on an NFL Sunday, and the Small Road Dogs System is an example in point. No luck last week, with a 2-3-1 outcome, but long-term this is a solid system. It takes a few minutes to run the query and put the bets on. 

One thing I've noticed, and it may well be due to the absence or reduction in home fans, but in matches where the road team is getting a very small number of points, i.e. fewer than 2.5, ATS this strategy is 9-2 this season, increasing the trend which has been present in this category of games since 2009 which is now 107-83-5 in all games, and with a slightly higher ROI in Divisional games. Good luck if playing the Small Dogs today. 

   

The Cassini Tales From Victorian North London

A change of pace today with a personal post, and it appears that the Cassini family have a long and proud history with drinking and gambling. The next time I am accused of taking either of these perfectly harmless (in moderation) activities to excess, which does happen on rare occasions, I shall fall back on the excuse that it runs in the family, a claim for which I now have evidence.

The first story is about my great great grandfather who featured in the Tottenham and Edmonton Weekly Herald of Friday 31st July, 1891: 

Almost seven years later, his elder brother had some notoriety appearing in the Globe newspaper of Friday 20th May, 1898, in a story also covered in the same day's London Evening Standard:

THE KING’S CROSS CLUB RAID 

Arthur Golding, 321, Upper-street, Islington, was summoned before Mr. Horace Smith for keeping and using the premises 376, Gray's Inn-road, for the purpose of betting. The defendant was further summoned for permitting the premises to be used by William Wolton and William Henry Golding for the purpose of betting on 4th May. William Henry Golding and William Wolton were summoned for using the premises for the purpose of betting. William Henry Golding and Wolton were further summoned, together with Henry Cassini and Richard Ray, for assisting in the conduct of betting at 376, Grays Inn-road.

From the evidence previously given, it was shown that Arthur Golding rented the premises known as the Great Northern Club, at £130 per annum, the landlord paying rates and taxes. The club was raided on 4th May by Superintendent Hammond and a number of officers of the G Division. No fewer than 855 betting telegrams and 863 betting slips were discovered on the premises, and while the raid was in course of progress, a number of telegrams relating to horse racing were received at the club. Wolton and William Golding were sitting at desks receiving betting slips. Mr. Muskett prosecuted on behalf of the Commissioner of Police. Mr. Travers Humphreys defended Cassini and Ray. The two Goldings and Wolton were represented by Mr. C. Mathews. 

After hearing the evidence, Mr. Horace Smith said he was of opinion that this was betting club used for the purpose of betting. It was obvious that a great deal of betting was carried on there, and also outside the club. He dined A. Golding £50 and 5gs. costs; W. H. Golding, £20 and 3gs. Wolton, £20 and 3gs. costs; and Ray, £5 and £1 1s. costs.

He dismissed the case against Cassini. Several defendants found on the premises were bound over.

Back to my great great grandfather, and it does appear there was something of a history of drinking. He was in Holloway Prison in 1881, though I have yet to find out what for and how long he was there for, but in September of 1875, he was caught in a pub (Nightingale Tavern, Hornsey - sadly now closed) after-hours:

As reported in the Hampstead & Highgate Express: 

With all these fines, I'm beginning to understand why the family fortune never made its way down to me.

There are other pleasures in life besides drinking and gambling and this Cassini story from 1891 completes the set, although it's not a happy tale. A nineteen year old girl killed herself after being pressured by her Mum to choose a Cuthbert over a Cassini - Cuthbert? Seriously? He may have gone on to work for the Trumpton Fire Brigade, but that is to be confirmed:

This is what happens when there is no sport to invest on - things get silly!