Tuesday, 15 June 2021

Whyteleafe Woes

Not to depress anyone, but less than a week until the days start to shorten again, and 2021-22 pre season fixtures start to be announced. Unfortunately for my club, there is again no pre-season tour of Queensland and even more unfortunately for my local non-league club, any season at all is now in doubt. 

Many years back, I trained pre-season with Whyteleafe but surprisingly they never called me back, (presumably they mislaid my number). 

More recently my son went further and played a few matches for the first team there, but yesterday the club confirmed rumours that have been circulating for a while that they will not be playing in next season’s Isthmian South Central League.
The club has been forced to give up its Step 4 status after new owners of the Church Road ground refused to negotiate a new lease or licence agreement with the club for the 2021-22 season.

So that's a bit disappointing, but hopefully the club will continue, albeit in a lower tier. Depending on how much lower a tier, I may try out for the team again, although after the broken leg this year, I'm not sure my chances of first team action are any higher than they were 40 years ago! 

The new owners of the ground are Irama Sports, a Singapore based company which has "close links" to former Liverpool and Wales player Ian Rush. Not sure how true their claim to love grass roots sports is though.

Sports investing has gone a little quiet this month so far with few qualifiers in either the NHL or NBA systems as both these sports are well into the playoffs. It's fortunate there have been few, as most have been losers. 

The NHL ROI has fallen to 13.4% for the season, and the NBA Overs ROI to 22.5%. The MLB Hot Favourites continue to generate money though, with a 22-5 record and an ROI for the month of 16.8% and 11.7% for the season. June is usually a good month for hot favourites, though not quite up to May's high standards, but 2021 is on track to beat the June record set two seasons ago.  


Friday, 11 June 2021

Sticky Situation in MLB

Last month, I wrote this in regard to the MLB: 

The Totals Systems combined are comfortably in profit after 179 games (29.96 units) but interestingly all the profit is from Unders with Overs slightly down, although making up ground after a slow start to the season.

Overall, Unders is the winner in 51.7% of matches, but in our subset of selections, the strike rate is currently 62.9%.

It appears that we may now have an explanation for why the Unders is performing so well. The latest Sports Illustrated magazine has an article titled "The inside story of how rampant pitch-doctoring in MLB is pumping pitchers up and deflating offenses" reporting that:

Over the past two or three years, pitchers’ illegal application to the ball of what they call “sticky stuff”—at first a mixture of sunscreen and rosin, now various forms of glue—has become so pervasive that one recently retired hurler estimates “80 to 90%” of pitchers are using it in some capacity. The sticky stuff helps increase spin on pitches, which in turn increases their movement, making them more difficult to hit. That’s contributed to an offensive crisis that has seen the league-wide batting average plummet to a historically inept .236.

The current World Series champions Los Angeles Dodgers are called out specifically:

According to the data, L.A. has by a large margin the highest year-to-year increase of any club in spin rate on four-seam fastballs, which are considered a bellwether pitch. In fact, the Dodgers’ four-seam spin rate is higher than that of any other team in the Statcast era. There is no proof the Dodgers are doctoring baseballs, but nearly across the board, their hurlers’ spin rates on that pitch have increased this season from last.

The Dodgers declined to comment.

However, the Dodgers have been one of the non-profitable teams for this strategy this season, and along with the Padres and Giants have made this a non-starter in games involving NL West teams. In NL East matches however, the Under is winning 68.4% of the time. 

In the AL, where the Designated Hitter rule applies, matches involving an American League team, system matches are going Under 66.2% of the time.

Now that the issue of tampering with the ball has been exposed, it will be interesting to see how the Totals markets, as well as the leagues, react. We may not always immediately know why an edge exists, but if you wait until an explanation is found, you'll have missed the boat. 

The T-Bone System is firing on all cylinders this season too, with a 100% record this month and a season ROI of 5.6%, while the hot favourites are up 11.1% on the season. After losing 6.7 units in April, the system is now up 26.9 units.  

Thursday, 3 June 2021

The Betting Bees - Benham's Brentford, and Bloom's Brighton

Other than fans of their promotion rivals, I suspect that most neutral football fans were happy to see Brentford promoted to the Premier League last Saturday. 


One club chairman who wouldn't have been so thrilled would have been Brighton's Tony Bloom, as it is well known that he and Brentford chairman Matthew Benham had a major falling out in the early 2000s when they worked together at Premier Bet. The two clubs did agree on the transfer of Neal Maupay in 2019, so maybe things have cooled off a little but the boardroom could be an interesting place when the two teams play each other next season.

I've previously written on this blog about Benham in February 2015 when Brentford were playing in the second tier after spending 59 of the previous 60 seasons in the third or fourth. I wrote about Bloom a year later in February 2016. It's worth reading the Benham article again, given that the post ended with:
None of us know what will happen next. But we can say this. Brentford and Midtjylland are clearly going the right way and their stories over the next few years will make fascinating viewing. And while Benham has taken some flak in recent days, history teaches us that in the long run it is unwise to bet against him.
Back in February 2015, FC Midtjylland had never won the Danish League or Cup, but since then have won the league three times, finished runners-up twice, and also won the Danish Cup. With Brentford now reaching the Premier League, it's pretty clear that Benham's methods work.

His betting strategy - "to exploit inefficiencies and errors in bookmaker prices" - should be what everyone strives for, and speaking of which, here are the results from May.
A couple of red areas, but in a short time period such as a month, results are always going to be skewed by randomness and luck, and worrying about wins and losses is rather silly if we have confidence in our strategies. Focus on the process, not the results.
"Bad bets sometimes win and good bets sometimes lose. Long-term it will work." - Mark Langdon (Racing Post)

Tuesday, 1 June 2021

Keeping Score

I mentioned Morgan Housel a couple of times late last year, and his book "The Psychology of Money" which is well worth reading if you are interested in finance. 


One of the main takeaways from the book is that investing is quite unlike any other field. In the opening chapter he writes:
In what other industry does someone with no college degree, no training, no background, no formal experience, and no connections massively outperform someone with the best education, the best training and the best connections? 
The 'outperform' in this instance is the often heard story of someone like a janitor or librarian who dies at a good old age and leaves several million in their will, and Housel includes the story of Ronald James Read who:
"was an American philanthropist, investor, janitor, and gas station attendant."
All that Read and others like him have done is typically invest what they can from their average salaries in stocks / index funds and let time do the rest.

Fewer than 4,000 of the 2.8 million Americans who died in 2014 left more than $8m and Read was in this group.

The Washington Post praised Read, writing, "How a man of modest means accumulated so much wealth contains exemplary lessons for saving that apply to all of us.

The writer, Barry Ritholtz, noted that lessons could be learned from Read's experience adding: 
"But there is also a cautionary tale about recognizing the value of your finite time here on Earth. Perhaps learning to enjoy life while you can is part of that equation."

This subject was also touched on by Morgan Housel in a recent podcast interview I listened to, when the name of Warren Buffett was brought up, as it often is in these conversations. 

Early on, Housel is asked about Buffett and essentially the primary reason that he has become so well known and wealthy is because he started investing at age 10, and in his 90s is still going. The formula for getting rich is "be patient and wait for 75 years."  

Housel points out that 99% of Buffett's net worth was achieved after age 50, and 97% after he turned 65 and that his obsession with business and investing has come at a cost to his family and social life.

Most of us want wealth so that we can be independent and focus on other things in our lives, but for Buffett and I suspect some other billionaires, wealth is simply their scorecard in a game they can't quit. 

If you're into podcasts, check out "We Study Billionaires" Episode 378 - The Psychology of Money. It's 75 minutes of fascinating conversation and great to listen to while you're out for a walk or run. 

Back to the book and Housel declares that:

financial success is not a hard science. It's a soft skill where how you behave is more important than what you know.

This applies to sports investing too, as do some of the podcast discussion relating to Benjamin Graham and his evolving formulas!  

While not in the same league as Warren Buffett of course, not many of us are, I do like to track my investments and May was another solid month overall (+3.52%) although most of the gains were from property which is unusual. Seven consecutive months in profit and +33% since the end of October.

2010-2021

Tesla slumped 11.9% last month while my birthday Bitcoin purchase has now lost 40%, not one of my smarter investment decisions but at least I only put in a relatively small amount. Overall my play trading account lost 4.2% last month, and 0.6% year to date. 

I probably shouldn't mention the streak of profitable months because as soon as I mentioned the winning streak (of 19) for hot MLB favourites in the last post, we hit two consecutive losers on Friday. Normal service has since resumed with two more winners at the weekend, but I'll review the MLB, NHL and NBA systems for May in a couple of days. I'll also be publishing some results from the Europa and Champions League this season, now that those competitions are both finished. 

Friday, 28 May 2021

MLB Streaking, Chelsea's CL Final Form and More

A work trip took me away from betting and blogging for a few days, but a couple of people left comments or sent me emails while I was away. 


David asked for clarification on this comment from my "Never Say Never" post of a couple of weeks back:
The lesson for bettors is that any sporting outcome can be value if the price is high enough. Bet for value, not for who you think will win, and you will be a long term winner. In other words, bet numbers not teams.

What I meant by this is that you shouldn't bet an outcome because you "think" it'll win. You back an outcome because the probability of a win is greater than that implied by the price (odds).

If you are finding value, the profits will come. If you are backing who you think will win with no regard to value, then the losses will come. It's counterintuitive to back an outcome that you don't think will be a winner, but it is often the right thing to do if your goal is to make money rather than provide entertainment. The key to successful betting is to take advantage of those betting for entertainment as well as the uninformed, because it is their money that ultimately tips the scales and offers value to the sharper minded. 

Stewboss commented on the NBA Overs System results for the regular season, writing:

The NBA overs figures are good on the face of it but I feel that results based on the closing line would be a more useful measure. The figures polled from your data source are posted at arbitrary times with no consistency. There are threads on their forum confirming this.

As Voltaire said, "perfect is the enemy of good." As I've written here before, the prices in the Killer Sports database aren't necessarily closing prices, but are:

a representation of the line at which most people bet the game. The Lakers closed at -1, pick and +1 in some places, but they were -2, -1.5 and -1 for most of the day. The closing line, in many cases, is not the line at which most people bet the game.

They will generally be close to the closing prices, and in many markets will be the same, but as Killer Sports point out, even if the total or line moves in the last few minutes before a game starts, not many people will be on at that price since betting has been taking place for some time before, and for events like the Superbowl for a full two weeks. 

They're also the best totals and lines we have, or at least that I know of that are available for free, and they are certainly good enough to use as a basis for identifying areas of market weakness. We can never find mathematical proof for a system since prices / odds are dynamic and if we hesitate too long, we miss the boat altogether.  

Anyone who has followed the NBA Overs system will know that totals sometimes move during the hours prior to a game and if you bet early, sometimes the move will be in your favour, sometimes it'll be against you. Sometimes you can get better than the dime line (1.952) and other times you may get worse, but even if you only got 1.806 on the 1,000+ matches since 2013, you would still be in profit. 

The intent isn't to say that if you follow this system, you will have an ROI of 7.9% - you almost certainly won't - but it is to show where the market is inefficient and it's up to each individual to work out for themselves the best way to take advantage of this since we don't all have access to the same sportsbooks and prices. And if anyone has solid closing totals for NBA games, please let me know where they are available and I'll see if the inefficiency is consistent on these. 

The NBA playoffs are currently in progress following the new play-in games, but only one game so far has been a qualifier, but it was another winner at least. 

In the NHL, the playoffs are also moving along, but a small loss so far post season has meant the overall records have taken a slight hit:

There is one Game 7 tonight (Vegas Golden Knights v Minnesota Wild) and possibly another on Monday night if the Montreal Canadiens beat Toronto Maple Leafs tomorrow. 

Since 2012, backing Home teams in Game 7 matches after a loss in Game 6 has an ROI of 23.1% but from just 18 matches so don't get too carried away. 

In the MLB, a couple of wins this week have moved the T-Bone System into green, but it's the hot favourites system which is really paying the bills this season so far, currently on a winning streak of 19 and with just one loss in the last 35 matches. It's not often you get a run this hot in baseball.

Three more selections tonight, and this month is currently the best since August of 2019.  

The Totals Systems combined are comfortably in profit after 179 games (29.96 units) but interestingly all the profit is from Unders with Overs slightly down, although making up ground after a slow start to the season. 

Overall, Unders is the winner in 51.7% of matches, but in our subset of selections, the strike rate is currently 62.9%. 

Looking at the past 17 seasons of Champions League football, the Final has not been profitable for backers of the underdog, which tomorrow means Chelsea. 

The favourite has won 11 of the 17 Finals, with five Draws and only Barcelona's win over Manchester United in 2009 seeing a return for 'dog backers. This game was also the one with the narrowest of differences between finalists. 
A couple of curiousities are that the only Final where an odds-on favourite didn't win was 2012 when Chelsea were again the underdog and held Bayern Munich to a Draw while Chelsea were 
also underdogs in 2008 with another Draw the result. 
 

Monday, 17 May 2021

Into The Playoffs With Page-McIntyre

Both the NHL and NBA regular seasons are now ended with the playoffs underway for the former. For the NBA, this season sees a new play-in format (similar to the first two rounds of the Page-McIntyre System for a four-team playoff) to determine the seventh and eighth seeds in both conferences.


Typically the teams with the seventh and eight best regular season records are allocated these spots, but this season the teams finishing seventh through tenth play a mini single elimination tournament for the two spots. The ninth and tenth placed teams play each other first, with the loser eliminated and the winner playing the loser of the match between seventh and eight placed teams for the final playoff spot. The winner of the seventh v eighth game becomes the seventh seed, which in the Western Conference sees the Los Angeles Lakers (second favourites to win the championship) host the Golden State Warriors. The Lakers finished tied for 5th place with the Dallas Mavericks and Portland Trail Blazers but dropped to 7th based on the tie-breaker rules. 

The idea of a play-in tournament was, as with the Football League playoffs, to keep interest going for longer for more teams in the regular season and a single elimination game in the NBA is new, with best of 5 or 7 game series typical. 

Those of you following the Overs System this season will doubtless be thrilled with the results yet again. 
A more manageable number of bets than in 2018 and the highest ROI since the totals started to climb so dramatically in this league. Totals are in italics as there will likely be a few more qualifiers from the playoffs. 

In the NHL, the results were also excellent despite the realignment of teams due to the pandemic:
Hopefully the markets will continue to be inefficient through the playoffs. The Boston Bruins lost in overtime on Saturday, but we had two winners yesterday to put the post season results into profit. 

 

Thursday, 13 May 2021

What A Drag

They are still favourites to win the World Series, but the Los Angeles Dodgers have fallen to third in their Division behind the San Francisco Giants and the San Diego Padres. After starting the season with 13 wins from the first 15 games, they lost 15 of the next 20, despite not being the underdog once. 


When the starting pitcher is right handed, there is an ROI of 93.5% when opposing the Dodgers in non-Divisional matches, but in Divisional games where the sides typically are more familiar with each other, right handed starters mean it is profitable to back the Dodgers, but the season is still fairly young so don't get too excited. It's just another angle to keep an eye on.

The familiar T-Bone System is in positive territory this season, with National League matches boasting an ROI of 11%. Backing 'Hot Favourites' got off to a slow start, but with a current streak of seven wins the ROI is down just 1.1%

For the Totals Systems, results are mixed so far. Overs are struggling, overall down 4.53 units but mostly in the National League, while Unders are up 22.22 units so at least the Combined Totals are in profit once again. 
I wasn't sure how Totals would play out this year with the introduction of a new baseball but experts had determined that:
the new baseball is bouncier, yielding higher exit velocities than in years past, and also possesses more drag, as it is not traveling as far.
The key is that the early numbers seem to back up the theory that the baseball isn't traveling as far. Fewer Home Runs in April than in 2019 (no April games in 2020), and home run totals are at their lowest since April 2017. It does appear that the betting markets haven't yet adjusted to account for this.

Monday, 10 May 2021

Dow 36,000

In 1999, a book titled Dow 36,000: The New Strategy for Profiting From the Coming Rise in the Stock Market was published.

 
Written by James Glassman and Kevin A. Hassett, the authors argued that stocks at that time were "significantly undervalued and concluded that there would be a fourfold market increase with the Dow Jones Industrial Average (DJIA) rising to 36,000 by 2002 or 2004."

It didn't happen. At the time of writing, the DJIA is above 35,000 for the first time and within touching distance of the 36,000 but almost two decades later than predicted. 

The authors put a little money where their mouths were by betting $1,000 (proceeds to charity) that the index would be closer to 36,000 than 10,000 in ten years and lost. 

They would have needed to wait until October 2017 to have won, but were perhaps a little unfortunate in timing, given that the book was published shortly before the dot-com bubble burst, with a further blow coming with the September 11 attacks of 2001.

The global recession of 2009 was the final nail in the coffin for the bet, but hopefully the royalties from the book covered their losses! 

While tidying up some files this weekend, I came across this article from MoneyWeek magazine of 24th January 2020 written by Bill Bonner. I'm glad I ignored the advice. 

At the time of the article, Tesla was priced at an adjusted $112.96 and while it did decline in March (along with just about every share) to around $70, it's now around $637, even if it is struggling today.

The point is not to believe everything you read, especially when people are paid to write rather than for being correct. 

Most bloggers are not paid to write, and last night I purged from my blog roll all those entries without a post in the past year. There are surprisingly few sports investing blogs out there, and if you know of any please let me know.

Martin, who writes the Tennis Trading blog asked to be added, and I have complied, although to be honest with a 15 month break between February 2020 and this month, I fully expect this blog to go dormant sooner rather than later. 

His comeback post blamed the pandemic for the loss of interest, but the tennis markets are tough to find an edge in so it will be interesting to see what transpires, but Martin is correct in saying that:
A progressive staking system will never change a losing strategy in a winning one. There has to be a real edge.

Friday, 7 May 2021

Never Say Never

Sky Sports News tweeted out the following on Wednesday:

The key five words here are, of course, "if the price is right".

As one reply succinctly put it:
OK, so it was my reply and I'm biased, but of course the Glazer family would sell any asset at "the right price".

For example, Ron Noades sold Crystal Palace in 1998 after Mark Goldberg offered him £23.8m, a sum at least double what the club was worth at that time. 

Noades was reluctant to sell, and regretted the deal later, but the offer was simply too good to turn down. Noades even lent Goldberg £5m to allow the deal to go through.

Perhaps Goldberg knew that Palace were destined to be one of the biggest 25 clubs in the world, ahead of "Super League" club AC Milan!

The point is that everything has its price. I mentioned the Berkshire Hathaway Annual General Meeting in a recent post, and one of the questions asked was whether the company would be open to a call from Elon Musk with a request to insure SpaceX's future mission to and colonization of Mars.

The question was directed at Ajit Jain, who runs Berkshire Hathaway's insurance business.
“Specifically he wants insurance to insure SpaceX’s heavy rocket, capsule, payload, and human capital. Would you underwrite any portion of a venture like that?”
Without hesitation, Jain responded, “This is an easy one. No thank you. I'll pass.”

Buffett chimed in with:
“Well, I would say it would depend on the premium. And I would say that I would probably have a somewhat different rate if Elon was on board, or not on board.” 
Buffett gets it, and perhaps it's no surprise that Buffett's successor will not be Ajit Jain, though that decision appears to have been based on the latter's age rather than his questionable response, as the chosen one is Greg Abel who is a mere 58 years old. 

The lesson for bettors is that any sporting outcome can be value if the price is high enough. Bet for value, not for who you think will win, and you will be a long term winner. In other words, bet numbers not teams.

Wednesday, 5 May 2021

National League Rivalries

As the 2021 MLB season moves past its opening month, the most interesting division right now is the National League West where two of the top three favourites for the World Series are currently trailing the San Francisco Giants, currently available at 130 on Betfair. 

The reigning champion Los Angeles Dodgers are favourites for the World Series, with the Padres third favourites behind the New York Yankees who are currently fourth out of five in the American League East division. 

The Guardian has an article on the Dodgers - Padres rivalry which has become a thing over the past couple of seasons, and mentions the other big rivalries in baseball such as the Yankees - Boston Red Sox, St Louis Cardinals - Chicago Cubs, New York Mets - Philadelphia Phillies and the traditional NL West rivalry between the Dodgers and the Giants.

These rivalry matches are interesting from a betting perspective because, as well as each occurring around 19 times a season, of the extra interest they generate.

The eight clubs mentioned in the traditional rivalries all happen to be in the biggest eight clubs in baseball, at least by franchise value which is likely closely correlated to the fan base. In order they are ranked as shown left.

Only one of the rivalries (Yankees - Red Sox) is in the American League, with the others all National League, evenly spread across the Divisions with one apiece. 

Back to the National League West and with data starting from the 2004 season, i.e. 17 full years plus this one, backing the underdog is a profitable strategy. The market appears to be particularly pro-favourite at the start of a new series and in games where the 'dog is coming off a loss. 
For the Mets - Phillies matches, the ROI is 9.7% while for the Cubs - Cardinals games it is 6.4%. Neither is close to the 47.3% in the West, but it's well worth looking out for these games. The Dodgers play the Giants seven times later this month. 

As an aside, Clayton Kershaw, an old topic of this blog, had one of the worst nights of his career for the Dodgers yesterday giving up four runs in the first innings before being pulled from the game. As it was Game 1 of a double-header, this put the Dodgers in something of a bind, and they went on to lose both games.

Switching sports, and in the NBA last night the Phoenix Suns were about 12.5 point favourites versus the Cleveland Cavaliers. After regulation, the game was tied, but in overtime the Suns not only won, but covered the spread winning by 16 points. First time in 30 years a double digit favourite has covered in overtime. 

Tuesday, 4 May 2021

Cryptocrime

Thanks to my new found awareness that comments now require me to proactively seek them out and approve or, in the event they are spam, delete them, this blog has its first comment in a while. With regard to Bitcoin and it's traceability by law enforcement, Cats of Oxford wrote:

The question is, if Bitcoin is so easily traceable by law enforcement, why have we not been able to track down and stop the ransomware attackers who take payment in Bitcoin, nor even to work out who is behind the number of high profile "Bitcoin thefts" in the currency's history...

The comment by The Irrelevant Investor (Michael Batnick) was that:

"Law enforcement would love nothing more than for criminals to use a financial instrument whose history can clearly be traced, like Bitcoin."

When Batnick was challenged on this point, his reply was a rather weak:

"The US government seized roughly 70,000 Bitcoin from the Silk Road case last November, or more than $3 billion at current values."

Technically true, but from what I understand, this was after the authorities had seized the records of Silk Road, rather than from tracing the transactions. As someone on the thread said, the equivalent of Al Capone's accountant being turned.

This paper "In Math We Trust" published in March by One River Digital Asset Management has this opinion:

Reasonably, there are also concerns about the use of Bitcoin by nefarious actors. Yet, the immutable nature of the blockchain ledger has worked to the great advantage of law enforcement officials for tackling criminal behavior (Kathryn Haun’s journey at the Department of Justice is a terrific example). Forfeiture of digital assets is also far more successful than with cash criminal activity.

Who's Kathryn Haun? you may ask. Well, apparently she was asked in 2012 to look into shutting Bitcoin down.

But Haun quickly decided the currency itself wasn’t what needed probing.

“It would have been akin to saying ‘let’s go prosecute cash,’” Haun said.

Instead, her department prosecuted multiple cases where bitcoin was being used for extortion and white collar crime. In some cases, the technology behind bitcoin, known as blockchain, actually helped the department solve cases.

So it's probably the blockchain technology that Batnick was basing his opinion on. While several exchanges have been hacked with huge losses going back many years, there's also this problem reported on by the New York Times earlier this year:

"of the existing 18.5 million Bitcoin, around 20 percent — currently worth around $140 billion — appear to be in lost or otherwise stranded wallets, according to the cryptocurrency data firm Chainalysis.

Unfortunately Bitcoin lost 4% yesterday, and Tesla lost almost as much, so not the best of starts to a month, but there's a long way to go yet. 

Monday, 3 May 2021

Bitcoin, Berkshire, Betfair and Bromley

As mentioned last week, it was the Berkshire Hathaway Annual General Meeting in Los Angeles on Saturday, with Warren Buffett and Charlie Munger giving their opinions on a number of topics. 

While Buffett dodged a question on Bitcoin saying:
"The truth is, I’m going to dodge that question, because the truth is, we’ve probably got hundreds of thousands of people that are watching this that own Bitcoin. And we’ve probably got two people that are short. So we’ve got a choice of making 400,000 people mad at us and unhappy, and making two people happy. And it’s just a dumb equation."
Munger didn't hold back however, in fact quite the opposite.
"Of course I hate the Bitcoin success," he said. "And I don’t welcome a currency that’s so useful kidnappers and extortionists and so forth. Nor do I like shoveling out a few extra billions and billions and billions of dollars to somebody who just invented a new financial product out of thin air. So I think I should say modestly that the whole damn development is disgusting and contrary to the interest of civilization."
Well, that escalated quickly. My opinion is that Munger's argument is simply wrong. As the Irrelevant Investor Michael Batnick put it:
This argument from Munger is quite common and quite silly. Law enforcement would love nothing more than for criminals to use a financial instrument whose history can clearly be traced, like Bitcoin. You know what criminals use to launder money that doesn’t leave so clean a path? U.S. dollars. And Berkshire Hathaway is currently sitting on $145 billion of them.

A circle of competence is one of the core principles of Buffett and Munger, so I understand why they haven’t bought any Bitcoin. I have a harder time understanding why Munger feels so strongly about something that is clearly outside of his circle.
When asked about the moral issue of investing in the oil and gas industry, Chevron specifically, Buffet had this to say:
"I don't like making the moral judgments on stocks in terms of actually running the businesses, but there's something about every business that you knew that you wouldn't like," he added. "If you expect perfection in your spouse or in your friends or in companies you're not going to find it."
I suspect my wife has no idea how lucky she is. 

Munger and Buffet had conflicting opinions on whether the S&P 500 Index or Berkshire Hathaway stock was the better investment. Readers will know that Buffett put his money where his mouth was to the tune of $500,000 several years ago and has long been a fan of passive investing and this fund in particular.
"I recommend the S&P 500 index fund … I’ve never recommended Berkshire to anybody because I don’t want people to buy it because they think I’m tipping them into something," he said. "On my death there's a fund for my then-widow and 90% will go into an S&P 500 index fund."

"I do not think the average person can pick stocks," he added. "We happen to have a large group of people that didn't pick stocks but they picked Charlie and me to manage money for them 50, 60 years ago. So we have a very unusual group of shareholders I think who look at Berkshire as a lifetime savings vehicle and one that they don’t have to think about and one that they'll, you know, they don't look at it again for 10 to 20 years."
Charlie Munger, on the other hand, had a different perspective.
"I personally prefer holding Berkshire to holding the market," he said in response to the same question. "I’m quite comfortable holding Berkshire. I think our businesses are better than the average in the market."
I've been invested in the S&P 500 Index for many years but only added Berkshire Hathaway as an individual holding in December last year. It's already up 22.82%, which is not too shabby, but my investments in individual stocks are a small percentage (9.2%) of my total investments. While no one ever knows what the future holds, it does look like the US economy is positioned for an excellent couple of years. For example, Moody's Analytics said this yesterday:
"We are revising up our outlook for real GDP growth this year to nearly 7% and to over 5% next year. If we are right ... this will be the strongest two years of growth since 1950-1951 at the height of the post-World War II economic boom."

That's a big 'if', but fingers crossed. 

Another month is now in the books, and the NHL System continued its record of profitable months with the basic system adding another 18.23 units (ROI 23%).
The NBA Overs System had a 17-9-1 record in April, taking the season record to 63-35-2 after exactly 100 selections.
April was the opening month for baseball and the T-Bone System is up by the smallest of margins, 0.23 units and an ROI of 0.6%

Backing 'hot favourites' hasn't been profitable which is a bad sign given that the early games of a season usually offer value (see image right) although backing the 'really hot' favourites is 3 for 3.

There have been a few comments about Betfair recently, and while I don't have any specific details, it appears that some people are having trouble depositing funds, even if they are long term winners, or at least they claim to be, falling victim to Betfair supposedly ensuring the account holder can afford the amount being deposited.

Once you have established an edge, I'm not sure why anyone needs to make further deposits. As I've said before, I made one deposit of £98.50 back in 2004, and that's been it. I'll make withdrawals, but never leaving the account at a level where it will need topping up again. If that day ever comes, then I'll accept that my edge has gone and it's time to move on to something else. Ian Erskine of FTS actually mentioned this in his blog at the time, although the page no longer seems to be there:
Over time we will break down the myths of what is required but my starting point today is bank. I bet long before Betfair and lost fortunes. My first deposit into Betfair was £50. My initial starting cash to get where I am today is less than £1000. You can believe that or not believe it. I will give you a further example Cassini who operates Green All Over which is an entertaining blog started with I believe £98 and has never made another deposit, went down to £20 odd quid and now pays 60% Premium charge, focusing mainly on American sports betting and trading.

My Premium Charge percentage is 'only' 50%, but his point that with an edge, you can build up from just a small amount, is correct.  In fact, starting with a large bank and little to no experience is a very bad idea as this Tweet from last night illustrates:

The month of May sees the NBA and NHL Regular Seasons come to an end and for the NBA the new Play-In Tournament starts on the 18th, followed by the traditional playoffs. The NHL playoffs are scheduled for May 11th concluding in early July. 

Overall, including the more traditional financial investments, April was the third best month in spreadsheet history with a 4.71% increase. $TSLA was up 6.2%, S&P 500 index was up 5.24%, the FTSE100 was up 3.23% while $BTC lost 1.98%

It's no secret that I love myself a good spreadsheet, tracking finances, health and exercise, football, betting, postcards and family history records to name a few, but a certain Gareth Wild from Bromley has found another use, and I'm a little sorry I didn't think of this myself. You can
read the full thread here but it opens with:
For the last six years I’ve kept a spreadsheet listing every parking spot I’ve used at the local supermarket in a bid to park in them all. This week I completed my Magnum Opus!

I live in Bromley and almost always shop at the same Sainsbury’s in the centre of town, here’s a satellite view of their car park. It’s a great car park because you can always get a space and it is laid out really well. Comfortably in my top 5 Bromley car parks.

After quite a few years of going each week I started thinking about how many of the different spots I’d parked in and how long it would take to park in them all. My life is one long roller coaster.
There's more, and worth a read as are the comments which include:
I love spreadsheets (4 open right now and track 3 daily) but this is a bit much even for me

have you considered an autism diagnosis? this very cool experiment is something we would absolutely do and lots of my also-aut friends have commented on how cool this is

I love this sort of thing. I have logged all my 883 fights and mapped all the airports, hotels and sports arenas I have visited. Not sure why but it could come in handy if I ever needed to prove to the police where I was...

While spreadsheets, like sports betting, remain only a hobby for me, there's apparently good money to be made these days as a 'spreadsheet influencer'. 

Continuing the light hearted theme, I would also like to recommend the Wikipedia page for Rube Waddell, a baseball Hall of Famer from the turn of the 20th century. To describe him as 'eccentric' would be an understatement. A sample:
Waddell's career wound through a number of teams. He was notably unpredictable; early in his career, he once left in the middle of a game to go fishing. He also had a longstanding fascination with fire trucks and had run off the field to chase after them during games on multiple occasions. He would disappear for months at a time during the offseason, and it was not known where he went until it was discovered that he was wrestling alligators in a circus. He was easily distracted by opposing fans who held up puppies, which caused him to run over to play with them, and shiny objects, which seemed to put him in a trance.

Monday, 26 April 2021

Reading and Thinking

A big earnings week ahead with both Tesla and Boeing reporting their Q1 results, the former today, the latter on Wednesday, and on Saturday 1st May there is the always interesting annual shareholders meeting for Warren Buffet and Charlie Munger's Berkshire Hathaway, another individual stock I added to my portfolio last year, and already up 21.49%.

Buffet and Munger are both known for the amount of time they spend reading, with Charlie Munger being quoted as saying:
"Warren and I do more reading and thinking and less doing than most people in business. We do that because we like that kind of a life. But we've turned that quirk into a positive outcome for ourselves. We both insist on a lot of time being available almost every day to just sit and think. That is very uncommon in American business. We read and think." 
They are not the only ones to espouse the importance of reading. Bill Gates reads one book a week, and Mark Cuban reads for three hours a day. Arthur Blank (owner of Atlanta's Falcons and United) reads for two hours a day, while Mark Zuckerberg gets through a book every two weeks. The claim by his brother that Elon Musk reads two books a day sounds far fetched, but it's likely that Tesla's CEO certainly reads a lot. All books are not equal of course, but the point is that successful people read prodigiously. 

Bill Gates makes a point of finishing all the books he starts reading, which is not something I can claim to do, but this article is worth a read, and you can credit the time spent towards your daily total!

My latest read is "The Joys of Compounding" by Gautam Baid which arrived on Saturday, and the reviews look good even if the price on Amazon is a little high. Shop around. 
In The Joys of Compounding: The Passionate Pursuit of Lifelong Learning, Gautam Baid integrates the wisdom, strategies, and thought processes of over 200 preeminent figures in history whose teachings have stood the test of time. Distilling generations of investment and life lessons and compiling it with his personal experiences into a comprehensive guide on value investing, Baid demonstrates their practical applications in the areas of business, investing, and decision making.
At 438 pages it's not a short book, but one of the benefits of working from home is the extra time available for reading. 

Saturday, 24 April 2021

Comment Catch Up

As I have mentioned previously, thanks to @Beigemartin who mentioned that he had commented recently but the comment had not appeared, I discovered a treasure trove of unpublished comments awaiting moderation dating back several years. Rather embarrassing really, but I used to receive emails telling me that comments had been received, but at some point this appears to have stopped.


Of course many comments were time sensitive and there's no point commenting on them now, but some of them look interesting and as I've said in the past, comments are a good source of inspiration for future posts. Plus it's just rude to ignore a comment when someone has taken the time to contribute, even if the slight was unintentional.

So if you've commented and not seen your comment published, mea culpa and apologies. I'd rather assumed that leaving comments on a blog was passé but maybe not.

So working my way back in time, and Marty (presumably Beigemartin) had this to say on my March Wrap post a few days ago:
You might consider adjusting your S&P return to GBP, or at least ensuring they are in the same currency, for comparability.

I wasn't sure what he meant by this, since the returns of the S&P 500 versus FTSE 100 were compared to a 100 unit starting amount, and no currency was mentioned. The point I was trying to make was that the US index had grown that 100 units to 270 units while 100 units invested in the UK index had lost value. Thanks to ALuckyA Day, I realised that some of you are looking to compare the actual amount in real terms, taking into account exchange rates and perhaps inflation too, but this is going much deeper than I intended. 

Yes, if you had converted £100 into dollars at the end of 1999, invested that $164 in the S&P 500 and then converted back at the end of the period in question, you wouldn't have £270. (You would actually have more - £336.16 - thanks to Brexit and the exchange rate dropping from around $1.64 in 2000 to today's $1.39, but point taken.) It's good to know people actually think about these posts!   

Going back in time, at the start of the year Wayward Lad commented:

Great to read your blog today. I must confess that I'm not a regular visitor, but being a blogger myself, I know the time and effort to keep it going year-in-year-out is tremendous. Good luck in 2021, and I promise the visit and read more often.
It would be a lot easier to blog if I didn't miss comments for several years! 

My old friend, the very knowledgeable Matthew Trenhaile, took me to task for a line from this post written during the aftermath of the US election back in mid-December:

"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." 

That really is an unpleasant thing to say. The sweeping nature of the statement also of course makes it factually incorrect.

Of course it was a generalisation, but unfortunately my experiences over the years have led me to this conclusion, although Betfair's training may be partly to blame. For whatever reason, the information being given to bettors during the post-US Election period was incorrect, and while I have little sympathy with those betting based on the Help Desk's word rather than on understanding the market rules, this should not have happened.

While talking about Matthew, he left a comment back in July on this US Election post saying:   

"The always excellent The Economist" This is presumably an exaggeration and I don't believe even The Economist themselves would claim to be always excellent. In fact I would suggest that "always" when applied to excellency is a tough standard to meet for any entity. I was particularly disappointed at the last general election that the publication suggested that all readers who had the same values as it should vote for the Liberal Democrats. When voting in a first past the post environment willfully throwing away a vote in this fashion is completely meaningless. If general elections were conducted in the not always excellent but more excellent than FPP way of proportional representation and single transferable vote then the advice might of held merit. The most important thing when voting is that your vote carry positive expected value much like in betting. The more optimal way of voting when dissatisfied with the status quo is to vote for the most popular non incumbent party. Even if you do not agree with that party’s policies the most important thing in politics is invariably to, as cricket commentators are want to say about bowling to a batsmen, “keep ‘em honest”. Safe seats become less safe and marginal seats are often lost. Only when the constant threat of change is embraced can we hope to see progress. To use another cricket metaphor politicians must be forced to constantly play balls in the “corridor of uncertainty” otherwise they might develop a taste for leaving too many deliveries altogether or even worse start slogging with no regard for the team effort.

A good comment and of course the use of 'always' in this context was an exaggeration - my way of saying that this is a publication I enjoy. Excellence is a hard status to maintain, and is in any case subjective.

Also on the US Election, G wrote:

With little rationale and certainly no evidence to date I do see Biden somehow dropping out [on set dementia the most likely reason at this point]. I then see Clinton stepping in as the Democratic nominee. Could be pure fantasy by I’ve had a reasonable nibble at long odds on her being the next President. Time will tell off course but I just don’t see Biden carrying the Dems all the way to victory.

If any candidate was showing signs of dementia, I wouldn't have said it was Biden. Both candidates are up there in years, but Trump's decline over the past four years was the more notable. Fortunately G's fantasy was just that, and with no evidence was always likely to be. The more people betting with no evidence and little rationale, the better.

Finally, at least for now, and in this post I mentioned that:

1892-93 was a season that previously famous for being Bootle's only season in the league.

No prizes, but name the only other club to have played just one season in the league, and I'm not counting Salford City as I expect them to return next season!

"Unknown" guessed New Brighton, but that club played a full 21 seasons before dropping out in 1951. Salford City did play a second season, and the answer isn't Harrogate Town either! 

Overdone

It's not often that I get something right, but I did say yesterday regarding the proposed increase in capital gains taxes over $1m that:

"I suspect the resulting drop in the markets was an overreaction"
And sure enough, the S&P rose by more than 1% to close near its all-time high.

Charles Schwab's chief fixed income strategist Kathy Jones may be a reader of this blog, as she commented:
"I think the immediate reaction was probably a bit overdone."
Just a bit. She did go on to make the point that with the index close to a high:
"I think at the moment, when you have very high valuations in the market, anything that is bad news can spark a bit of a sell-off."

She thinks a lot, which is good, but sometimes you can overthink these things. 

With just five trading days to go this month, April is currently my third best month ever with $TSLA back above $725 and despite my Bitcoin investment being rather poorly timed. Its day will come, and if anything, the recent pullback presents a buying opportunity.

As for sports investing, April has been excellent for the NHL System which is currently on a six game winning streak and a 29-10 record for the month and an ROI for the season now at 18.6%.

The NBA Overs System has had no selections for the past two days, but with six winners from the last seven, this too is having a positive month with a 13-7 record and a season long ROI of 24.9%.

In other news, I mentioned that I uncovered a few years worth of unpublished comments recently. While many were spam and have been deleted and others were time sensitive and thus pointless to address now, I do plan to trawl back through them and post where it seems appropriate to do so. 
   

Friday, 23 April 2021

Wayward Comments

While the FTSE 100 is once again above its price at the start of this millennium (£100 is now worth £100.12), in the US "stocks turned lower following reports that US president Joe Biden planned to raise capital gains tax for wealthy individuals. The S&P 500 index gave up morning increases and closed the trading day down 0.9 per cent following a Bloomberg report stating that people earning more than $1m would pay a capital gains rate of 39.6 per cent, up from 20 per cent."

The above lede in the Financial Times is a little misleading as the 39.6% mentioned would be the marginal rate for gains in excess of a million dollars, not something that would be a concern to most people. The thing with news like this is that for the media, it's a far bigger story if they say the rate is almost doubling, than if they say that hardly anyone will be impacted by it.

I suspect the resulting drop in the markets was an overreaction, but reading comments on Twitter about it are quite revealing about how people don't understand the basics of how the taxes work. Some outlets compounded the confusion or misinformation by adding in the Federal Tax Rate on incomes over $1m resulting in this kind of nonsense:
Well there's a reason why it doesn't make sense, which is that it is nonsense. The announcement also shouldn't have come as a surprise, but as we all know, markets aren't always efficient as illustrated by the story of the Bombay Oxygen company in India, where there is currently a shortage of oxygen for the treatment of COVID-19 victims. 
It appears that the company were once involved in manufacturing industrial gases but stopped in August 2019. Someone hasn't been reading the small, but important, print.
A few weeks ago, thanks to @BeigeMartin, I realised that the reason no one was commenting any more wasn't because they weren't commenting any more, but because I was no longer getting emails telling me that there was a comment to approve. This misunderstanding has resulted in many missed comments, but now I know I shall try to keep on top of them.

Unfortunately many comments were time sensitive and there's no point commenting on them now, but some of them look interesting and as I've said in the past, comments are a good source of inspiration for future posts.

BeigeMartin's comment was on my March Wrap post a few days ago and he said:
You might consider adjusting your S&P return to GBP, or at least ensuring they are in the same currency, for comparability.

I'm not actually sure what he means by this, since the returns of the S&P 500 versus FTSE 100 were compared to a 100 unit starting amount, and no currency was mentioned. The point was that the US index has grown that 100 units to 280 units while 100 units invested in the UK index hasn't grown at all.

Wayward Lad, whose blog I have mentioned in the past, commented a while ago:

Great to read your blog today. I must confess that I'm not a regular visitor, but being a blogger myself, I know the time and effort to keep it going year-in-year-out is tremendous. Good luck in 2021, and I promise the visit and read more often.
More recently, i.e. just this month, Wayward Lad commented on my Worse Than Marxism post:
An interesting post Cassini, and one that's close to me. After decades (I'm giving my age away now) of indifferent pension performance, I took control of my pension in 2012 and opened a SIPP. Thirty years of pension contribution amounted to just £51,684 in the pension pot - not much to write home about. I've bought individual stocks, and Investment Trusts, dabbled in AIM companies and had some success, some failure and (worst) sold out of big winners when they were only just starting to climb the mountain of success (why-oh-why did I sell out of Ashtead at 675 in 2013 after doubling my money?). Recently, I've been drawn into the ETF web on the advice of my banker son-in-law and my eldest son (works at Goldman Sachs), but I still enjoy the euphoria of the individual company purchase. It's the euphoria that we chase: be it in sport, sex, gambling or the stock markets - euphoria proves that you are alive!

I can confirm that being alive is indeed a very good feeling! Wayward Lad sums up in that comment just how difficult trading is. Whatever you do is almost certainly not going to turn out to be perfect, but when it comes to investing, whether it be in sports or more traditional markets, the aphorism that perfect is the enemy of good, or more literally the best is the enemy of the good, is never truer. 

@IanCassel tweeted recently that:
One of the hardest parts of being a full time investor is over complicating things because you have time to over complicate things.
We make decisions to buy and sell based on our knowledge and influences at the time. It's all too easy to second guess why we sold a stock after it doubled, but there could have been many reasons and looking back and saying "if only" isn't helpful.
"Until you can manage your emotions, don't expect to manage money."-Warren Buffett
We tend to remember the bad decisions and forget the good ones. Probably an evolutionary strategy to reduce the chances of us making poor decisions in future, but who remembers cutting a losing trade short before it went on to tank even further, or selling at a profit shortly before a bad earning call negatively impacted the share price?

ETFs are great as I have written before - there's no second guessing yourself with these, and most of my money is tied up in tracking indexes, but as Wayward Lad says, there's a thrill to picking an individual stock that goes on to do well, (have I mentioned Tesla?), and there's a thrill to making money on sports that far exceeds that of a gain from the stock market which, in real terms, dwarfs the sports bet winner but is rather boring.

It's a bit like being married. Chasing individual stocks is the bachelor in us looking for a little excitement outside the routine and security of marriage / index funds. My best single day in total was one where I "made" just over six figures, and while that might sound impressive, it's simply the result of old age and compounding and a rebounding stock market. (If you invest just 
£200 a month from when you turn 21, and increase that amount by 5% a year, you'll almost certainly be worth a million by the time you turn 60). 

The point is though that I enjoy sports betting wins, even if they are much smaller in sum, far more than I should and similarly I get more upset about losing £500 on a sports bet than I do dropping ten times that amount in stock market losses. Perhaps part of the reason is that those stock "losses" aren't actually losses, nor "wins" gains until the underlying security is sold but it's also a factor that I feel a personal satisfaction in identifying a value bet in sports.

The table on the left shows the number of all-time highs hit for the S&P 500 since 2005, courtesy of CompoundAdvisors.com 

Making money in a bull market isn't very satisfying, and it's easy to get carried away and we've been running with the bulls for a few years now. In Wayward Lad's most recent post, he writes:
The SIPP is looking tremendous. The value is at a record high and I think there's a long way to go this year. My target for the year-end is £300,000 and at one stage this year (early March) I was getting a bit worried that I was likely to fall well short of that target - but my, what a rally in recent weeks!

Since my "birthday blog" on 8th November 2020 (long-term plan is to "retire" on the day before my 67th birthday in 2026) the SIPP has gained £29,500 of which £6,000 is contributions; so that's £23,500 gain, equivalent to just under 10% - if this keeps up the £300,000 for 31st December could be hit a bit earlier.

While a rising tide lifts all boats, I'd caution that there's a hurricane somewhere in the future. Batten down the hatches. These "if this keeps up" thoughts can be dangerous. 

Wednesday, 21 April 2021

Almost Perfect

“I don't care what you have to do – if it means walking everywhere and not eating anything that wasn't purchased with a coupon, find a way to get your hands on $100,000. After that, you can ease off the gas a little bit.” - Charlie Munger
With teams having completed somewhere between 12 and 18 games out of 162, the 2021 MLB season is still very much in its infancy but the futility of blindly backing Home teams in the early stages of a season continues to be evident.

With data going back 17 seasons, a strategy of backing all Home teams during the first 30 games of a season has an ROI of -3.3% over 7,644 games, and while 'hot favourites' are profitable (especially in National League matches), it's Away teams offer more value.

Backing big underdogs in baseball isn't a good idea, but backing Small Dogs on the road in the first 30 games of a season has an ROI of 4.4% in National League games. The 2020 season saw this strategy take a loss, but we can blame the now abandoned Designated Hitter rule change for that. This season, the strategy currently has an ROI of 9.9% on the Money Line with three probable selections tonight. 

I mentioned a few days ago that the San Diego Padres, in their 52 year history, were the only team in MLB never to throw a no-hitter, but that fun fact did not age well as locally born Joe Musgrove threw one on April 9th. He was just a hit batter away from the even rarer perfect game.

The NBA Overs System for this season now has an ROI of 18.8% after 83 selections with April so far having a 10-6 record. 

The Basic NHL System has now passed 200 selections for this season and continues to pay dividends, currently up 48.43 points with an ROI of 17.6%. Here are the results for this system for the last 10 seasons:
$TSLA

In the financial markets, April was a good month until this week, when gains have been trimmed a little, but with just eight trading days to go, I'm hopeful for a sixth consecutive positive month, but of course anything can happen. My Bitcoin investment has lost 6.76% in its early days, but Tesla's current gain means I can sleep easy at night.

In a sure sign that I have too much time on my hands, I decided to rewrite the history of English football and strip the "Big" 6 of their trophies, awarding them to the highest placed non-Big 6 club. The good news is that Crystal Palace have now won the league, a couple of FA Cups, and doubled their tally of Full Members' Cup wins.

Leading trophy winners in English domestic competitions are now: