Sunday 26 February 2023

League Cup Final Profile

It's a rare League (Carabao) Cup Final profile for today's Manchester United v Newcastle United match with the Draw priced as third favourite. 

Of the last 18 finals, only the 2106 match between Manchester City and Liverpool had this profile and the game finished 1:1. Of the four FA Cup Finals with this profile since 2004, two games ended as a Draw.  

Over those past 18 matches, the ROI on the Draw is 50% (+9.03 units) and only one underdog (Birmingham City v Arsenal in 2011) has won in that time. 

Berkshire Hathaway Annual Letter 2023

The annual letter from Warren Buffett to shareholders in Berkshire Hathaway Inc was published yesterday. It's always published on a Saturday, presumably to allow time for shareholders to read 144 pages of wit, humility, wisdom and numbers over the weekend. 

I own some of their 'B' class shares, and so far so good with with them up up 3.3% in 2022, a year where anything positive was a rarity, and up 35.8% since I bought them a little over two years ago: 
One of my best individual holdings continues to be Warren Buffett's Berkshire Hathaway which I bought a little over two years ago and has quietly increased by a little over 37% in that time. It's not a jazzy holding, but it's a very solid one, and as regular readers will know, I'm a long time fan of Warren Buffett and his philosophy, although changes at the top for Berkshire Hathaway are unavoidable fairly soon with straight-talking vice-chairman Charlie Munger turning 99 yesterday.

The Class 'A' shares are currently priced at $461,705 and just one would be a rather significant percentage of my savings, but you only need to own a single 'A' or 'B' share to be eligible to attend the AGM in Omaha in person. 

While I have no plans to do so, the 'B' share is currently priced at a rather more manageable $304.02 and the AGM is a popular event with around 40,000 investors attending in person, and hotel rooms in town priced at more than triple the usual rate. 

Buffett's letters are always worth a read, and this year's is no exception. He pointed out that he's been investing for almost one-third of the country's existence, which is quite amazing. A couple of lines that caught my eye:
It’s crucial to understand that stocks often trade at truly foolish prices, both high and low. “Efficient” markets exist only in textbooks. In truth, marketable stocks and bonds are baffling, their behavior usually understandable only in retrospect.

And this one on stock buybacks, which appears to be targeted at a certain US Senator:

The math isn’t complicated: When the share count goes down, your interest in our many businesses goes up. Every small bit helps if repurchases are made at value-accretive prices. Just as surely, when a company overpays for repurchases, the continuing shareholders lose. At such times, gains flow only to the selling shareholders and to the friendly, but expensive, investment banker who recommended the foolish purchases. 

The key point here is the clarification that the repurchases need to be made at value-accretive prices. In October, it was reported that Meta, formerly known as Facebook, conducted a $45 billion buyback initiative at $300 a share. The only slight problem with this was that the stock dipped below $90 not long after!  

The letter also had some good one-liners as usual:
The world is full of foolish gamblers, and they will not do as well as the patient investor.

Patience can be learned. Having a long attention span and the ability to concentrate on one thing for a long time is a huge advantage.

Don’t bail away in a sinking boat if you can swim to one that is seaworthy.

There is no such thing as a 100% sure thing when investing. Thus, the use of leverage is dangerous. A string of wonderful numbers times zero will always equal zero. Don’t count on getting rich twice.

You have to keep learning if you want to become a great investor. When the world changes, you must change.

Some good advice there for all of us.   

Saturday 25 February 2023

Sir Bernard Ingham

‘All right, Prime Minister,’ Ingham told her, ‘If that’s what you’re going to say I’m going to go outside and commit suicide.’ So she didn’t, and he didn’t.
I've mentioned a few times in this blog that I attended my first football match back in 1967 thanks to (later a Sir) Bernard Ingham, who was a neighbour across the road from my home in Old Lodge Lane, Purley. 

His son John was a similar age to me, and knocked on my front door one April Saturday morning asking if I would like to go to and watch football that afternoon. 

Parental permission was obtained, and the memories of that afternoon are forever seared in the memory. In those days Crystal Palace played in claret and blue, it was sunny afternoon, Palace won 2:1 (v Birmingham City), and I was hooked. 

As an event which changed my life, that afternoon was up there with the incident of the door handle, and it was personally sad to hear yesterday that Sir Bernard Ingham had passed away at the age of 90.

Long after I knew him personally, his comments about the Hillsborough disaster were of course indefensible, and his refusal to apologise for them after they were proven to be wrong even more unconscionable. 

Many will remember him negatively for his time as Press Secretary for Margaret Thatcher when she was Prime Minister, but when I knew him he was working as Press and Public Relations Adviser at the Board of Trade for Barbara Castle, and later for Tony Benn, and not long before moving south, he had stood as a Labour candidate for the Leeds City Council in 1965, and had a Labour / union background. 

He might have lost his way politically, but in regards to football it was the opposite as, when I first knew him, he was a Leeds United supporter, but he saw sense after a few visits to Selhurst Park and his son still goes to matches there. Perhaps seeing Leeds win just one of 17 games at Selhurst Park between 1966 and 1993 helped with the decision! With the Hillsborough comments in mind, it's an unfortunate coincidence that Palace host Liverpool tonight.  

Politics weren't much discussed on trips to the New Addington swimming pool on a Saturday morning, ten-year-olds have far more important things to talk about, but I do remember him getting a ticket for speeding as we left New Addington one day. Mind you, if you're at all familiar with New Addington you'll have some sympathy, as the desire to leave the place in a hurry isn't unusual! 

He also took me to my first Rugby Union match, though I'm not 100% sure where it was (I think Rosslyn Park), before they (the Inghams, not Rosslyn Park RFC),  relocated to the other side of Purley - the posh part - soon after. 

My parents, I think jokingly, often said they would never forgive him for converting their normal - I use the term loosely - son into a 'football crazy' boy!

I'll remember him as he was in the 1960s, a good dad, a good neighbour, and a man who certainly impacted my life in a way that I will forever be grateful for.  

Sunday 12 February 2023

Big Foot

With Superbowl LVII this weekend wrapping up the NFL season this evening, attention turns to baseball with Spring Training for the 2023 MLB season starting in less than three weeks. The Regular Season opens on March 29th, but significant changes to the 162 game schedule means that the usefulness of some of the data from previous seasons is, at best, questionable. 

Since the Divisions were increased to six in 1994 , almost half of a team's schedule was matches against a divisional opponent with playing up to 20 games a season against each of them. That all changes in 2023 with every one of the 30 teams playing against the other 29 during the season and the number of divisional games dropping from 76 to 52. Interleague games see the biggest increase, with teams going from 20 matchups to 46.

As I've written before, with the universal adoption of the Designated Hitter (DH) rule, there's no longer any difference between the American League and the National League and rumours are that MLB may be headed to a 32 team league with eight divisions of four teams as is the case with the NFL.

For comparison, the NBA currently has 30 teams (six divisions of five teams) and the NHL has four divisions of eight teams.

In addition to completely revamping the schedule, there are some significant rule changes regarding the introduction of a pitch clock, (including a limit on pickoff attempts), restrictions on defensive shifting, and the introduction of larger bases - one of the justification for the latter being that "players' feet are much bigger now than when the bases were designed". The famous 90 feet between bases is no more.

These rule changes should all result in higher scoring. The larger bases and pitch clock will make it easier for players to steal bases, and the shift changes will mean that "more balls will find open spots leading to a higher batting average on balls in play and more action on the field."

As for the change in schedules, the data (courtesy of Killer Sports) shows how there are big differences in outcomes depending on whether a match is a divisional game, an inter-league game or a non-divisional intra-league game.

For example, blindly backing all road favourites in regular season games against an opponent they beat in the previous game gives a losing ROI of -2.5% from almost 14,000 games, but in inter-league games where the selection is an American League team (i.e. playing without a DH) the ROI is 7.7%. Such discrepancies are likely to no longer exist in the future since most of this data is from the days when the leagues had different DH rules so the performance of National League teams is somewhat redundant. Yes, when they would play in an American League park, they would play AL rules, but with relatively few such games in their schedules, this wasn't something they were too focused on.

Back to the Superbowl and good luck if you think you can find an edge on the biggest game in the US sports calendar. The last NFL game I saw live was a Monday Night game in Philadelphia (vs. the Green Bay Packers) with my son so I shall be supporting the Eagles for the second time this weekend. My money is on them giving 1.5 points as my gut tells me they should win by a lot more, but as I said, it's highly unlikely I have any edge on this game.  

Friday 3 February 2023

Points, SGPs and January

We had no luck for the small road 'dogs in the NFL Championship games last weekend, and as The Guardian summed up the Philadelphia Eagles v San Francisco 49ers game:

Well, we were all expecting a closer game, but the 49ers had ridiculously poor injury luck with their quarterbacks and far too many costly penalties, so we ended up with a rout instead. That happens sometimes.
The Kansas City Chiefs v Cincinnati Bengals game was much closer, but we lost that one by a single point. C'est la vie. On to the Superbowl where the Eagles will play the Chiefs on Sunday week in Glendale, Arizona and wrap up what has been another profitable season in this sport. I am actually scheduled to fly to Phoenix for a work meeting later this month, but unfortunately a few days after the game so I shall miss out on the excitement that accompanies the event and my company will miss out on paying ridiculous sums of money for my hotel room.

ESPN had an interesting article covering the rise in interest in SGPs, Same Game Parlays which some of you may enjoy reading.
The days of placing a bet before a game and rooting for your team to cover the point spread are waning. The modern American betting market is full of player props, in-game betting and same-game parlays. Not even the long odds and the bookmakers' cushy margins are causing bettors to shy away from them. As we approach Super Bowl LVII, SGPs are as popular as ever.

This season, 46% of customers who bet on the NFL with a Kambi sportsbook placed a same-game parlay and 28% of all pre-game bets placed during the regular season were SGPs.

January is now in the books, and the EPL Draws had a profitable month (+1.19 units) with three winners from nine selections. In Spain's Segunda DivisiĆ³n, the similar Draw strategy had an even better month, with 19 selections generating 8 winners and 3.8 units of profit, while in the Bundesliga, the laying systems in the top division had a small profit, unfortunately more than offset by the loss in the Second Division resulting in a net loss of 2.21 units, although still (slightly) profitable overall on the season. 

The US winter sports continued to be a challenge in the new year, with the NHL and NBA systems all taking losses overall, although the NBA Totals System managed a small profit in January. Unfortunately February has started with four successive losses, so any hopes that the tide may have turned have been rapidly squashed.

Why the NBA has changed so much this season is debatable but the game is changing fast as reported by Axios last month:

Now for the boring, personal stuff. The bigger picture for January was quite positive, with my spreadsheet showing a 2.73% overall gain, and I'm now back to within a few hundred pounds of where I was at the end of October! Tesla was up 40% after a dire few months, Bitcoin was up almost 47% and Lloyds Bank close to 18% and the only real negative was that my company stock price was down. It's annual review and bonus month in February, so hopefully any options and RSUs will be awarded at lower strike prices. Retirement is proving elusive.

While the 40% gain for Tesla sounds impressive, the price is still about 50% off its high. As Ben Carlson puts it:

Dry Veganuary was successful, and while I wasn't strictly vegan during the month, consuming a little fish and cheese, I did avoid any meat or poultry all month and this, combined with walking / running 227.9 miles, resulted in a weight loss of 16.8 lbs, and my weight is now back to where it last was 4,100 days ago! Not sure how long it will stay here given the upcoming travel and a certain amount of catching up on my social life after a quiet January, but rest assured, you will know in four week's time. 

The correlation between weight gain / loss and calories ingested continues to be strong, with exercise making just a small difference. Consume fewer than 2,200 calories a day and I'll lose weight; more than that and I'll gain weight. And curiously the correlation between alcohol consumption and weight is strong too...