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. 

 

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. 

 

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.

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.

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.

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. 

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. 

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.