Thursday 28 March 2024

Daniel Kahneman RIP

I've often mentioned here the importance of psychology in investing, and probably the top expert in "the field of psychology of judgment and decision-making" passed away yesterday.

I've mentioned Daniel Kahneman him several times over the years, and if you haven't read his book Thinking, Fast and Slow, you should.

It’s a book that will take some effort to read because the ideas are dense, and even though they are well-presented, they’re not cloaked in the clothes of story. If you’re willing to do the work, though, Thinking Fast and Slow may be one of the most important books you ever read.
His Prospect Theory explains why investors typically consider the loss of a specific amount twice as painful as the pleasure received from a gain of the same amount.
When they made decisions, people did not seek to maximize utility. They sought to minimize regret.
Michael Lewis wrote a great book about Kahneman's relationship with Amos Tversky, called "The Undoing Project: A Friendship that Changed the World" which I also recommend. 

Some light reading for you while I am away for six weeks as I mentioned a few days ago. 

Although I have yet to receive a response to my mentioning that I might be open to a voluntary severance agreement should one be on offer, I have been immersing myself in the topic of retirement finances by listening to podcasts on my daily walks and reading while less active and I suspect much of my time away will be spent on this topic. 

One of the more interesting papers I've come across on the topic of how retirement funds should be invested (many experts say that one should move from stocks to bonds as you get older) is a recent one (October 2023) titled "Beyond the Status Quo: A Critical Assessment of Lifecycle Investment Advice" by Aizhan Anarkulova, Scott Cederburg and Michael S. O’Doherty which suggests that a 100% equity allocation may be the safest asset allocation even in retirement.

I've always been of this mindset myself, although my more risk averse wife is not, but fortunately I make the financial decisions. Yes, the 38% expected drawdown would be emotionally challenging, but I've been through a few of these in my time, with the lessons of Black Monday (October 18th) 1987 coming at a very good time in my life. More recently, on March 23rd, 2020, I was down 23.4% but never sold a single share and markets have bounced back as they always have done.

The odds that my next post will be penned as a retiree have moved to slightly odds-on, with an announcement coming on April 18th if rumours are to be believed, but once I've got my head around the sequence of return risk, the 4% rule and switching my mindset from accumulation to decumulation, I should be good to go. With Bitcoin halving around that date, it could be an interesting week.  

Enjoy Spring. All being well, I shall be back on May 8th after my third Total Solar Eclipse, either employed or retired. How boring life would be if we didn't have such uncertainties in front of us. Stay safe and stay lucky. 

Saturday 23 March 2024

Towel Throwing

Back in November, I mentioned a fairly well known tipster who, during a poor run of results, suggested that increasing stakes might be a good idea.

We're currently a few points down for the season with both official and unofficial picks, so if you've been thinking about upping the stakes at some point, this should prove to be a great time to do that.
I pushed back on this idea for what I hope are obvious reasons, but if anyone did actually follow this poor advice, they would be seriously regretting that decision. Hopefully many took a 'good money after bad' approach and scaled down the size of their investments. 

The ill-advised recommendation was made after 10 bets and a manageable loss of 4.02 units, while the subsequent 27 selections have now resulted in further losses of 14.76 units, a total ROI for the season of -50.8%.  

These are the 'official' bets with the towel having been thrown in this week on the 'unofficial' bets after 82 selections and a -24% ROI.  

All this is to point out that chasing losses is not a smart strategy rather than anything else, but with the National League less than four weeks from concluding, a losing season is now guaranteed.  With the acknowledgment that the edge has gone for unofficial picks, I'm sure some subscribers must be licking their rather deep wounds and wondering whether the edge has gone for official picks also. 

It happens. Markets are Darwinian - rather than Newtonian - in nature, and they evolve, and it's quite likely that the increased interest in the National League has sped this process up. We'll see how the remaining weeks go, but end of season games can be tricky with the motivation for teams ranging from nothing to play for to must-win for a play-off spot or to avoid relegation. Chesterfield have now won the League and promotion, but eight teams are realistically in with a chance of making the six club playoffs, while at the bottom Oxford City have gone with a tight battle between several clubs to avoid filling one of the other three relegation places. 

Friday 22 March 2024

16 Down

This blog is now into its 17th year, and not too many sports investing blogs can claim this longevity. 

Matekus' Sports Trader blog has been going since September 24th, 2009 which by some incredible coincidence is the exact same date as Steve Mullington posted his first entry on the Horse Racing oriented Mull it Over blog. The latter is updated almost daily while Sports Trader is a little less frequent with his posts.

Wayward Lad began posting in March 2010, with his Pension Builder blog making its debut in August 2013. There may be other long-standing blogs out there, and if you know of any that should be added to the blog roll here, let me know, and check out those long-runners I've linked to. 

Not so much these days, but in the past I would regularly receive requests along the lines of "Hey there, I've started a new blog. Please add me to your blog roll" but my experience told me that almost all of these would dry up in a very short time, so I would politely decline until a significant amount of time had passed. 

Whatever happened to Steve at daily25? With the benefit of hindsight, his last post is a bit concerning since he seemed to have fallen for the NFT scam. Perhaps 'scam' isn't the right word, but very few people have made money from NFTs. The idea always seemed a bit silly to me and I've never been tempted to go anywhere near these, and I'm still on the fence about crypto although I do have a fairly small FOMO investment in Bitcoin as I've mentioned. Hopefully Steve is doing well as he was one of the good guys and I still remember him sending me a Xmas hamper back in 2012 after my XX Draws had made him a lot of money. Steve wasn't shy about betting big, which is why the NFT thing is a little worrying.

I'm pretty certain the blog won't last for another 16 years given my age, but I still enjoy writing and, as I mentioned the other day, the challenge of finding edges. I'm still working, with nothing yet from my enquiry into a voluntary severance package, but I'm not in a hurry. My suspicion is that cuts are coming and by broaching the subject I've pretty much guaranteed I'll be included in the next round. 

We are off to Arkansas next week for the Total Eclipse on April 8th, the third one I will have experienced following Cornwall 1999 and Idaho 2017. Hopefully the skies in Russellville will be clear. The next one on my list is August 2026 in either Spain or Iceland, and if you have never experienced totality, you really should make sure to add this to your bucket list. 

Thursday 21 March 2024

Seoul Split

Major League Baseball is back, sort of, with a couple of games this week in South Korea before the season starts for real next Thursday with all 30 teams in action. With the recent rule changes, years of data has become pretty much valueless, and the last couple of years have been challenging to say the least. 

The totals markets are the ones where the most disruption would be expected and the table below shows the results over the past ten seasons for a couple of Totals systems (one Overs, one Unders) that, once upon a time, were good:
2020 was the shortened COVID season, but the golden years of 2016 - 2021 are clearly over. 

We do have two full seasons of data from the new world, which is a little over 5,000 games, and there are a couple of edges that seem to be showing themselves so far.  

The two games in South Korea between the Los Angeles Dodgers and the San Diego Padres were split.

Wednesday 20 March 2024

39 Months of Imminency

On September 21st, 2020, I bought some stock in a company called Chipotle Mexican Grill at a little under $2,000 per share ($1,196.45 to be precise). As I explained almost a year later:

One company I've not mentioned before is $CMG (Chipotle Mexican Grill) which I bought last September, primarily because I suspected a stock split might be imminent.
Finally, it was announced yesterday that the stock would indeed by splitting, at 50:1 no less, the largest ratio I can recall, and as you can see from the Tweet below, it has been worth the wait:
Up another 4% on the news today -  
and up 143.3% since I bought it, the stock is the second biggest individual gainer I have behind $TSLA which continues to lead the way at +718% despite a poor start to the year. 

The loosest of definitions for 'imminent' are unlikely to include a wait of almost three and a half years, but it's an investment that has been worth that wait, and I'll probably not be selling any time soon. 

Patience is sometimes rewarded, and as I mentioned in that August 2021 post:
"Investing becomes so much simpler when you're willing and able to measure progress in years and decades instead of weeks or months."
No news from Berkshire Hathaway on something similar for their Class A stock which currently trades at a mere $622,777.12 a share...

I've owned their more reasonably priced Class B stock since 2020 also, and this investment is up 84% right now, and sits fifth in the table of best performers.  By way of comparison, the S&P 500 is up by 38% since the end of 2020. 

Tuesday 19 March 2024

For Only Metal, What a Bore

I also took a further look at how Big 6 matchups played out when the teams meet in the late stages of domestic cups (FA Cup Quarter-Finals, Semi-Finals and Finals, League Cup Semi-Finals and Finals, and Community Shield games) and the Draw over 76 matches has an ROI of 39%. Manchester United host Liverpool in the FA Cup Quarter-Final this weekend, with the visitors currently odds-on favourites.
Once again, the Big 6 produced a winning Draw for us on Sunday, taking the ROI from now 77 matches in the above categories to 43%

For the 2023-24 season, in all competitions, the ROI is an incredible 173% (41.45 units from 24 matches):
There are another nine Premier League games this season between these clubs, as well as at least one FA Cup tie, probably two, and possibly a pair of Champions League semi-final games. 

These results aren't normal I hasten to add. The same strategy last season would have lost 9.83 units, although in 2021-22 it would have been up 6.83 units. The Draw is a fickle fellow, but 

My last post about Anonymous Fan being inspired to dig into the data and find a nice NHL system triggered a subscriber to the Sacred Manuscript to write:
Hi Cassini!

Hope you are doing well. I was quite inspired by your last post and no, I am not writing to ask about the query that was sent to you :)

But I might have found another good one and was interested in your opinion. * If it is as good as it looks, please don't share the details of it on the blog right now. *
I don't have Excel at home (using Open Office) so I can't put it through Joe Buchdahl's system to test its validity.

But unless I have done something wrong, it shows a 13.21% all time ROI over 1123 bets since 2006 with only 2 seasons resulting in a small loss.
If we include the 2023 season although it is not yet over, 10 of the 18 past seasons show double-digits ROI, including 6 above 20%.

Once again, it was very encouraging to hear that this blog, the manuscript or perhaps a bit of both have inspired someone to do some research.  

For the record, the probability that these results were from luck as generated by Joseph Buchdahl's spreadsheet was just shy of 1 in 50 million, i.e. very unlikely, and the best part of it is that the market bias it takes advantage off also applies in the NBA, which is similar to the NHL in many ways, including often shared arenas. 

I must admit to being somewhat inspired myself, and was happy to exchange ideas and observations.  As I've mentioned many times, it's not the money so much as the challenge of finding an edge. For only metal, what a bore. RIP Steve Harley, another teenage legend gone. 

Friday 15 March 2024

Neutral Nuisance

A unique scenario in the Europa Conference League last night as Olympiacos became the first team in European Competition spreadsheet history, i.e. since 2004, to overcome a three goal deficit from the First Leg.

It's not uncommon for a team with a comfortable lead from the First Leg to lose, but previously losses have never prevented the team from advancing.     

Maccabi Tel Aviv were handicapped by having to play their "Home" Leg in Serbia and after winning the First Leg 4:1 in Greece, they proceeded to lose 1:6 at "Home" in the Second Leg after extra time - the score was 1:4 after 90 minutes.

Backing the draw following a goalless First Leg is usually a bad idea, but the Viktoria Plzeƈ and Servette Second Leg also finished 0:0 and these results meant that the Rounds of 16 across all three tournaments resulted in a loss of 0.82 units although some subscribers may have skipped the Neutral venue game, a scenario I'm ashamed to admit the Sacred Manuscript author didn't consider.

After a rare visit to my Spam folder, I found a very pleasing email from someone who calls himself 'Anonymous fan.' My bad that the email was sent almost one month ago, but he wrote:
Hey Cassini,

Thank you for your work and your blog. I really appreciate everything you do. I have been messing around with killer sports since you introduced me to it and I have a lot of fun thinking about things that may matter for the sports I enjoy.

I think I may have found an intriguing one for NHL.
I won't reveal the find, which does look very interesting, but the most pleasing part of it is that this blog apparently does sometimes achieve one of its objectives, i.e. encouraging readers to explore ideas of their own.

I haven't talked about NHL much this season - the systems in the Sacred Manuscript are both boringly in small profit territory, the Basic by just 0.2% and the Premium by 2.5% - but Anonymous fan's discovery blows these numbers away with an ROI of 17.8% this season, and all time of 8.7% since 2006 and a total of more than 1,000 selections. 

Anonymous Fan explained his rationale and concluded his email with:
It seems to be steadily profitable year after year, present a solid number of plays, and the games that meet the criteria are typically quite enjoyable to watch. I am not very good at math or statistics though so maybe it is too small a sample? Either way I was curious to get your thoughts.
I ran the numbers through Joseph Buchdahl's "Testing Your Betting Model" spreadsheet:

and the 1-in-x probability came out to 8032. Very impressive, and with a selection last night I dipped my toes in the water and was rewarded with a winner. 

Thursday 14 March 2024

Second Legs and Big 6 Cup Ties

I mentioned on Tuesday that:

The Champions League Round of 16 closes this week with four second leg matches remaining, and to date, fewer than 17% of these matches end as draws, an implied price of 6.07. In matches where both clubs are from one of the Big 5 Leagues, the numbers are fewer than 15% and 6.69.
The strategy for the Round of 16 matches in the sacred manuscript made a profit of 2.01 units and while Laying The Draw isn't one of my usual strategies, in certain Second Leg matches in European competitions, it's a profitable way to play. 

Here are the numbers for backing the Draw in the Second Leg of the the early rounds of the knockout stage for the three tournaments:
Things change as the tournaments progress however, and Laying The Draw is not a strategy to follow in the next rounds. 

The markets for Second Leg matches also appear to offer value when the First Leg finished 0:0. We only have 84 such matches in our European sample from 2004, but backing the Draw has a negative ROI of -43%. This is also a trend that is seen in the English domestic game with the 19 games here showing an ROI of -47%

I also took a further look at how Big 6 matchups played out when the teams meet in the late stages of domestic cups (FA Cup Quarter-Finals, Semi-Finals and Finals, League Cup Semi-Finals and Finals, and Community Shield games) and the Draw over 76 matches has an ROI of 39%. Manchester United host Liverpool in the FA Cup Quarter-Final this weekend, with the visitors currently odds-on favourites.

In earlier rounds of the FA Cup, there have been 20 Big 6 ties since 2004-05 and not a single Draw which is quite surprising. I've not looked at the League Cup earlier rounds, but I suspect the big clubs don't take this competition too seriously until they get close to the Final, but I'd have thought the FA Cup would be given a little more respect!  

There have also been 27 all-Big 6 matches in Europe, and the ROI on the Draw here is 11%   

I plan to expand the European Club Competition section of the Sacred Manuscript with my Second Leg findings, and anyone subscribing at this late stage of the 2023-24 season will automatically get the updated document for the 2024-25 season for free. 

Tuesday 12 March 2024

Big Draws, Second Leg Draws, and Bitcoin

As I mentioned last week, backing the Draw in "Big 6" matches this season has been rather rewarding, and the Liverpool v Manchester City game on Sunday boosted the bank even further, with the biggest surprise perhaps that the starting price was around 4.0 on Betfair, although I could 'only' get matched at 3.95. Pinnacle's Closing Odds had the Draw at 3.9. 

In the "Big 4/6" era, the league matches between these two clubs are the best of the 15 combinations for the Draw historically with an ROI of 50% from the 30 games played. Chelsea against Manchester United is second at 43% with Arsenal - Liverpool games next at 27%. With an ROI of -51%, the Manchester Derby is the worst bet. 
Of the 30 Home / Away combinations, the single best fixture is Manchester City v Liverpool at 58%, closely followed by Chelsea v Manchester United at 56%.

As most readers will be aware, the European Club tournaments next season will use a Swiss system format in place of the traditional Group stage. In a cosmetic change, the UEFA Europa Conference League will drop the 'Europa' from its name, but the knockout stages will remain in place almost unchanged. I say almost, because the Champions League will have an extra knockout round for a place in the Round of 16.

All this is good news as my data goes back to the 2003-04 season, and as I only get interested once the knockout rounds begin, the changes should mean that the data should continue to be valid. It would be a shame if 21 years of data (1,968 matches) were to become worthless due to a format change, but this shouldn't be the case.

The Champions League Round of 16 closes this week with four second leg matches remaining, and to date, fewer than 17% of these matches end as draws, an implied price of 6.07. In matches where both clubs are from one of the Big 5 Leagues, the numbers are fewer than 15% and 6.69.

It's been a good year for Bitcoin and this month it's up another ~15% so far and setting new highs. Unfortunately my purchase timing - almost two years ago -  wasn't great, but my patience has been rewarded and I have no plans to sell. 

The approval of the Bitcoin spot ETFs appears to be the main driver of this current run up, but there's a second event coming up that is also likely having an impact.
Inflows to the ETFs hit an all-time high last week, seeing nearly $680 million of inflows in one day. This means that the funds are buying more Bitcoin every day, which is eating away at the liquidity provided by sellers.
The second event is the imminent 4th Bitcoin halving (expected date is April 19th) which doesn't refer to a halving of the amount of Bitcoin in circulation and therefore has no effect on the balance on any wallet but refers to the reduction of mining rewards for adding a new block to the blockchain.
At this point in time, there are about 19.5 million Bitcoins that have already been mined, while the maximum supply is fixed at 21 million Bitcoins. Considering all upcoming halvings every 210,000 blocks (~ 4 years), the last Bitcoins will be mined around the year 2140. Consequently, in the next 16 years only 1.5 million Bitcoins will be created, which underlines that the remaining inflation is very marginal from a technical standpoint.

Hopefully I'll still be around in 2140. although this blog likely won't be! 

Thursday 7 March 2024

Shadow Chasing and Mindset Shifting

I'm a little bit late with this update, but February was an interesting month. It had the extra Leap Day this year, which to salaried employees like myself is a slight irritation as it's a day we don't get paid for, but that wasn't what made it interesting.

As I mentioned before, I started the ball rolling on one of life's big decisions, i.e. retirement, and March could be an even more interesting month, although I'm not sure how quickly such a ball gathers momentum, nor which slot on the wheel of life it will ultimately land in. 

Given a few recent issues with the company - there are significant "cost pressures" and "financial headwinds" and the share price, which had its first annual loss in 15 years in 2023 is already down almost 10% year-to-date - as well as contractors being let go later this month, it doesn't seem too far-fetched to believe the rumours that some full-time employees are also likely to be made redundant in the not too distant future. Best case scenario is that I can negotiate an enhanced individual severance deal sooner rather than be one of many lumped together in a layoff deal later in which the terms are unlikely to be open to negotiation. 

I first entered the workforce on 11th August 1975, which I don't need to add was a very long time ago. One of the places my work has taken me over the years was the state of Arkansas where I spent a few years in the 1990s, and I shall be returning there later this month for a five week visit. 

The primary reason is to be in the path of totality for the total solar eclipse on the 8th April, but I shall also be meeting up with my son who has a work trip in Wisconsin which overlaps, and he's keen to visit the area where he spent a few of his early years before moving back to the UK. 

In addition, I still have a few good friends in the area and it will be fun to catch up with them again, and I also plan to rent a bike while I'm there as cycling trails are now plentiful there. This blog will therefore have its longest sequence of silence since its debut in 2008, also a long time ago, at least as far as sports investment / betting blogs go.  Whether the trip ends up being a workation or a vacation remains to be seen but having heard today that there has been a significant number of resignations follow the annual reviews, though none (yet) from my team, I rather suspect that I shall not be receiving an offer.

As for February, well in sports investing it was rather a quiet month. The NBA season had its usual interruption at this time of year for its All-Star Break but when there were games, it was a good month overall with a 41-28-1 record ATS for the basic system, which is a 59.4% strike rate and for the season to date the percentage is 52.2%. The Overs had a small loss, but at 53% overall for the season, we're still in good shape here too, with the number to beat 51.2%.

Disappointingly, after a strong January, the NHL system dipped into the red after their All-Star Break and is now down 3.43 units, an ROI of -0.9%. February is usually a strong month but this year was the worst since 2007. It happens.

The "All-Big 6" League Cup Final was a winner of course and for those of you backing the Draw in "All-Big 6" League matches also this season, at the two-thirds point of the season there are worse things you could be doing since this is now +28.87 units (144%) and the strategy is guaranteed to finish the season in profit. 
Note that the Pinnacle overround is creeping back up again as it did in the COVID affected 2019-20 season, a number that is higher in matches involving a Big 6 club than in those "Little 14" games. 

The small number of matches each season means there will be some big winning and losing ROI percentages, but overall a 12% ROI over the last ten seasons (with ten matches to go) is very good.

Meanwhile over in Italy the Serie A System is performing well and while the ROI is "only" 8.4% from 720 games, it's worth paying attention to.
We're getting close to some more big games. The European Knockout rounds are here, and the end of season Finals and playoff games aren't too far off either with the Euros the icing on the cake.

Overall February was a good month for the main spreadsheet, with a new end-of-month high ending the 23 month wait. March hasn't started particularly well, but it's early days and a drawdown of 0.4% is nothing compared to the 23.4% from March two years ago. Bitcoin set a new all-time high this week, and is currently up 72% this year.  Tesla isn't. 

As for health and fitness, without which there is no point being concerned about money, it's mostly good news. I joined a gym at the start of February (good news) and have been there just three times since (not so good news). I much prefer being outdoors and have been out on my bike a few times and my walking / running still exceeds six miles a day on average. Dry January was followed by an almost Dry February with just one drinking day, and the pounds have been falling off - hopefully fat rather than muscle - and I am now down by more than five and a half stone (78.4 lbs to be precise) from my high in 2019. 
Similar to the financial mindset change needed to adjust for a move from earning and accumulation to retirement and decumulation, so I need to figure out how to adjust to the idea of maintaining a healthy weight rather trying to attain it. Nice problems to have though. In another commonality with building wealth, losing weight (by which I mean fat) isn't hard, but it's slow and it's boring. The simple chart above shows where I got bored! The longer downward slopes are where I was more focused, and the instance starting around 380 days was when I was laid up in bed with a broken leg - zero alcohol and my wife had total control over my caloric intake - and I couldn't weigh myself daily for 11 weeks.  

Monday 26 February 2024

Another Perfect Final

Betfair's official Starting Price for the League Cup Final between Liverpool and Chelsea yesterday was 3.8, while the 'official' odds I record using the Odds Portal average price was 3.73.

For the Under 2.5 markets, an alternative - lower volatility - way of investing in these selections, the most traded price on Betfair was 2.52 with 2.4 the average on Odds Portal.

A winning result for both investments, with another 'perfect' draw, and the ROI on the last 20 League Cup Finals increases to 56%, and that from the Under 2.5 (only 16 Finals available) to 19% using my conservative numbers which should be easily beatable in practice.  

In the seven Finals without a fair-priced team at odds-on, the Draw has come in five times, an ROI of 148%, and in the 11 "Big 6" Finals, the Draw has won 7 times with an ROI of 133%.

I've updated the Sacred Manuscript and hopefully as well as subscribers, some (if not many) of you followed my advice from last week regarding this match. 

Saturday 24 February 2024

Berkshire Hathaway Annual Letter 2024

The 2024 annual letter to Berkshire Hathaway shareholders was published this morning, and as some readers will know, I both own shares in this company and often comment on the newsletter's contents.

For a traditionally rather boring stock, it's been on something of a tear this year, up 17% already, second only behind my less boring Bitcoin "investment" (+31.7% YTD) in my individual holdings. 
As for the newsletter, unsurprising Warren Buffett opens with a tribute to his longtime partner Charlie Munger who passed away last November just shy of his century, crediting him with being the “architect” of the present Berkshire, while "I acted as the 'general contractor' to carry out the day-by-day construction of his vision."

Buffett introduces a sister, Bertie, and makes an observation about her that many sports bettors would be well advised to heed:
She is sensible – very sensible – instinctively knowing that pundits should always be ignored. After all, if she could reliably predict tomorrow’s winners, would she freely share her valuable insights and thereby increase competitive buying? That would be like finding gold and then handing a map to the neighbors showing its location. 

As he often does, and again readers will know that I have long followed this strategy, he extols the virtue of owning US stocks writing:

I can’t remember a period since March 11, 1942 – the date of my first stock purchase – that I have not had a majority of my net worth in equities, U.S.-based equities. And so far, so good. The Dow Jones Industrial Average fell below 100 on that fateful day in 1942 when I “pulled the trigger.” I was down about $5 by the time school was out. Soon, things turned around and now that index hovers around 38,000. America has been a terrific country for investors. All they have needed to do is sit quietly, listening to no one. 

The index is actually above 39,000 right now, and while I prefer to track the broader S&P 500 Index, I'm sure there will be a lot of articles written when the 40,000 level is reached Started in 1896, it's not quite the OG of indexes, but it's second behind the Dow Jones Transportation Average which started in 1884. 

Buffett is very much a proponent of leaving things alone when they are going well, and talks about the holdings in Coke and American Express that Berkshire Hathaway have held for many years:

During 2023, we did not buy or sell a share of either AMEX or Coke – extending our own Rip Van Winkle slumber that has now lasted well over two decades. Both companies again rewarded our inaction last year by increasing their earnings and dividends. Indeed, our share of AMEX earnings in 2023 considerably exceeded the $1.3 billion cost of our long-ago purchase. 

And of interest to me with my new focus on dividends, Buffett adds:

Both AMEX and Coke will almost certainly increase their dividends in 2024 – about 16% in the case of AMEX – and we will most certainly leave our holdings untouched throughout the year.

The newsletter touches on a variety of topics including climate change, mental health and the challenges of hiring employees in the rail industry and as always, the 17 pages are worth a read in full - it can be found here

The annual review I mentioned yesterday went about as expected given the "financial headwinds" that have been mentioned, presumably to dampen expectations. It was no secret that senior grade levels would not be receiving any merit increases this year, and the bonus was down about £20k from last year with the options and RSUs set the same as 2023.

The tone of the conversation was all rather negative regarding the future and when job cuts were hinted at, I took the opportunity to express an interest in negotiating a voluntary severance package which he will be taking to HR. 

Exciting times. I went out for my daily walk immediately afterwards, always good for processing thoughts and clearing your head, and I felt very positive about everything. With the US S&P 500 later closing at new high and my Royal London pension statement also up, it was a new high again for the personal spreadsheet so it's all good. 

If no agreement on severance can be reached, or no offer is made, it's not a big deal. Given my tenure, I'll get at least six months pay if / when they involuntarily sever me and by the time that date comes around I'll have worked a few more months anyway, and as I've mentioned before, it's very comfortable working from home so that wouldn't be a big deal anyway. 

Friday 23 February 2024

Cups, Major Leagues and 673 Days

weirimdi followed up on his teaser of a comment regarding Cup competitions with some more data and some additional observations.

He wrote: 

Hello again, thank you for responding to my comment in your recent post.
As you suggested I looked at the ROIs of the respective leagues.
Here is a link the screenshot.
In addition to that you might want to look up the performance of major leagues in the Champions League when they play as an Away Team.
Another interesting angle here is that most of the Home Teams are underperforming. I included Group Stages/Qualifier/Knock Out Stages for CL and for the Cup selections too.

It has the data onwards based on maximum odds from
Thanks for the interest!
I might have mention this before, but I happen to love this stuff so thank YOU for the comment. The Cup data shows some interesting returns - Turkey's Cup with an ROI of 15.7% from 2000+ matches for example. 

As for the comment about teams from the major leagues when playing Away in the Champions League, yes I do track this although my idea about the 'major leagues' may differ since the highlighted ones are England, France, Portugal and Spain. 

Here are my numbers for the Big Five Leagues of England, France, Germany, Italy and Spain showing that opposing these teams (back the Home team if they are a Big Five club / back the Draw if not) is generally a good idea: 
More on this topic to come, possibly after the Round of 16 is complete and we have a little more data but - spoiler alert - backing an Away team from Germany, Italy or Spain is generally not a good idea with an ROI of -14%

Japan's Nikkei 225 index made a new high yesterday after 34 years, which is almost as long as the Israelites were wandering about in the wilderness, eating quail and manna. The S&P 500 index also closed at a new high yesterday, after recovering from a two year slump last month, and my own personal drawdown came to an end just shy of two years, (673 days to be precise) since a last high was reached on April 20th, 2022. 

The longest drawdown for my sports investing accounts was a mere 227 days back in 2007 but the mind is a funny thing and in many ways that felt a lot worse. I made a stupid mistake on New Year's Day and lost £5,000, what at the time seemed like a lot of money. As I've written before, it took me until August to recover, but I learned a valuable lesson from my error.

The new high comes at a good time psychologically. I have my annual review later today, and while any merit increase at my age is of little interest to me, I am much more interested in the size of my annual bonus and stock options. Perhaps not as interested as my wife, who has plans for new flooring, showers, cabinets and kitchen...  

With February extended by a day this year, there are still five trading days where it could all go horribly wrong, but I'm hopeful of ending the month at, or close to, a new high. 

Wednesday 21 February 2024

Second Leg When Up / Down By 3+ Goals

With an early second leg match today in the Europa Conference League, and the remaining 15 matches in this tournament and the Europa League tomorrow, I thought a look at how the market views second leg matches - in ties that appear to be decided - might be of interest.

The data below is from the Champions League, Europa League and Europa Conference League games going back to the 2003-04 season. 

In matches where the first leg resulted in a Home win by three goals or more, the market overrates the probability of the Draw in the return game, and thus offers value on both the Home team and the Away team. 

I suspect a couple of factors are at play here - the Home team doubts their ability to recover from such a large deficit whatever the club's public pronouncements may say, and that the Away team feel that the job is done, whatever their comments might say. 

Both teams may also be tempted to make some changes to their starting line-ups making the game more difficult to evaluate.

As much as I enjoy a nice Draw, I'm quite selective in the profile of matches I select from, and the results suggest that opposing the Draw in these matches is a solid strategy. 

When a goal is scored, and only two of 65 such matches have finished 0:0, the tie is either effectively over or, depending on how much time is left, a consolation goal that the Away side aren't too concerned about.

Of those 65 matches, only 10 finished as Draws and in matches where one team was a fair-priced odds-on favourite, just two of 22 ended as a Draw. 

It's a similar pattern in the reverse situation, where a second leg Home team comes into the game with a 3+ goal advantage. Just seven of 46 such matches end as Draws, three being 0:0 draws, with profits to be found backing both Home sides and Away sides. 
Don't get too excited about the large ROIs when the sample size is so small, but definitely something to keep an eye on.

Moving on, and with the NBA at its mid-season All-Star Break, it's a good opportunity to catch up on how the systems for that league are faring so far. The basic system is up just 2.56 units (an ROI of 0.8%), with the more selective sub-systems up 5.17 units (4.7%) and down 5.82 units (-14.5%) for the smallest of profits, boosted by the Totals system which is currently up 5.5 units (3.9%).  

It's a similar story of meagre profits in the NHL which had its mid-season break a couple of weeks ago. Here the basic system is up 2.52 units (0.7%) but it's clear that the days of double digit returns on our investments are a thing of the past:
Since 2015, the Basic ROI is just 1%, with the Premium currently at 3.3%

Sunday 18 February 2024


weirimdi had a comment on my last post which was very interesting. He writes:

Hello, inspired by your work I collected the data for main international domestic cup tournaments.
The results are impressive.

I analyzed the data from main competitions in Europe, Asia and South America.

I looked for the results from 2017/18 up to the latest one this season.

The best performing ones:
Turkey +160 Units (mostly in early stages, but there might be a reason for that)
Korea +70 Units
Japan +50 Units
French Cup +100 Units
Spanish Cup +75 Units
Now I started looking at data depending on the respective leagues of the teams involved.
I think there are some angles that are worth digging deeper into.

Keep up the great work.

I love it when my posts trigger someone to research some of my thoughts and ideas further. weirimdi doesn't mention ROIs, but in fewer than seven full seasons, those unit totals are quite impressive. 

As readers will know, my focus for club football tends to be on the big European Leagues, the knockout stages of the European Club competitions, as well as the domestic English Cup competitions and end of season playoffs, but perhaps I need to broaden my horizons and take a look at some of the national cup competitions around the world. 

My reasons for not looking at other countries before are mostly a, possibly incorrect, feeling that the 'cup' competition is much less highly regarded than the League. 

In France for example, four recent finals (since 2000), have featured a club outside of the top two divisions there, something which seems rather unlikely to occur in the FA Cup despite Maidstone United's valiant effort so far in this season's competition, but the cup competitions in other countries might be worth a look based on weirimdi's research. 

Thank you weirimdi and feel free to share any more findings.

Right now we're in the middle of the European Competition knockout stages which are always interesting with some edges to be found. The Champions League is in its Round of 16 stage while the Europa and Europa Conference competitions are in a knockout round for a place in the Round of 16. It's only been in place for two seasons before this one and is effectively a Round of 24 with 8 teams receiving a Bye. While the results should be in line with those of the Europa Leagues former Round of 32, this may not turn out to be true as we gather more data. 

Back to England and the League Cup Final is just ahead. No surprise that the two finalists are from the Big 6 (11of the last 20 - this year Liverpool and Chelsea) nor that this is the second time these two clubs have met in this final in three seasons and the third in the last 20.

Backing the Draw in League Cup Finals has an ROI of 44% and in "Big 6" finals the ROI is 119%

Tuesday 13 February 2024

International Draws Update

Although neither final in the 2023 Africa Cup of Nations and the AFC Asian Cup resulted in a win, both competitions did end up in profit, and if you bet the Draw in third-place playoffs you would have had a winner.

In Asia the profit from the 15 knockout matches was 3.13 units, an ROI of 21%, while in Africa the profit was a more modest 0.38 units, an ROI of 3%

The Africa Final was one of those rare matches where the favourite was the Draw, and while the sample size in International matches is small, it's a scenario where I don't feel the Draw is likely to be value.

In the 9,000+ EPL matches for which I have prices, not a single one has ever had the Draw as favourite, I wrote a post on the Draw as Favourite more than 10 years ago in which I attempted to explain why this scenario should never be the case. 

I did mention that where special circumstances exist, e.g. a Draw would suit both sides, the Draw could be favourite, but mathematically this shouldn't be true and in a knockout tournament, this situation wouldn't apply anyway. 

Some leagues do have the Draw as favourite relatively frequently, for example in the Spanish Second Division has had 131 such instances in the past six seasons, but backing the Draw in these matches would have lost you 5% of your money, which is worse than the 1% loss when blindly backing the Draw in all matches.

The International elimination games where the Draw has been favourite are:
None of the four matches involving African countries ended as a Draw.

Back to third-place playoff games, and with the D.R. Congo v South Africa match on Saturday finishing 0:0, backing the Draw in these games in International tournaments is now slightly in profit both in Africa and overall, which is somewhat surprising given that none of the combined 11 World Cup and Copa America third-place games have never ended as a Draw. 

The overall record for all active international competitions (elimination matches excluding the Draw when favourite) now stands as shown here:
Why the CONCACAF Gold Cup is such an outlier is an interesting question. I'm of the opinion that it's due to the teams being relatively imbalanced with a 'Big Two' of Mexico and the USA - who between them have won 16 of the 17 tournaments and comprised seven of the Finals - and a chasing trio of 
Panama, Canada and Costa Rica.

When these five countries meet in elimination games, the results are interesting and backing the Draw is actually quite lucrative, with an ROI of 50% from 20 matches. There was also a draw in the 2015 playoff match between the 2013 and 2015 Gold Cup winners - you guessed it, USA and Mexico - for a place in the 2017 Confederations Cup, so the results are actually slightly better but I don't have any odds for this game. 

There's no Gold Cup until next year, so while it might be tempting to skip this tournament completely, it may be worth keeping an eye out for the matchups just mentioned.

Friday 9 February 2024

Asia and Africa Finals

The 2023 Africa Cup of Nations and the AFC Asian Cup both come to an end this weekend. 

In Asia the Final is between hosts and favourite Qatar and Jordan while in Africa hosts and underdog Ivory Coast meet Nigeria.

Finals of International Tournaments are generally good for the Draw, with the eight Africa Finals producing 1.83 units of profit  and the three Asia Finals up 3.31 units. The combined ROI from this small sample size is 47% and for all 43 International Finals it is 28%.

This is the first Final in the spreadsheet where a host nation has been the underdog, and the fifth where one has been the favourite - and in none of those previous four has any side scored more than one goal. 
Africa also has a third-place game coming up, D.R. Congo v South Africa, but these are not knockout matches and overall, backing the Draw is not historically profitable with the 30 matches showing an ROI of -4%. However, in matches where the Draw is the second favourite, the ROI is 15%. Backing the favourite has an ROI of 42% in matches where the Draw is third favourite. 

Following this, the NFL season also comes to an end with the Superbowl in Las Vegas where the San Francisco 49ers are 2 point favourites to beat the Kansas City Chiefs.  

As I wrote last year, it's very hard to find an edge in such a big game. This is the 58th Superbowl and of the previous 54 (excluding one pick 'em in 2015 and two pushes) Favourites are 28 - 26 ATS while for the Totals it's a 28 - 28 split between Over and Under. This is the Chiefs fourth Superbowl in five seasons and the second time they've played the 49ers having beaten them 31:20 in 2020. 

Monday 5 February 2024

International Football Feast - Africa and Asia

It's not been the most productive start to a year in terms of posts, as some of you might have noticed. My focus has been in other areas, most notably reviewing my investment portfolio with more attention to dividends, (and for this I owe a big a big thank you to David and Simon for their help) and updating my retirement spreadsheet as that date moves inexorably nearer. I also sailed through another Dry January and at the behest of my son, have now signed up for a gym membership to work on strength training as I move into old age.

With the domestic and European football leagues passing the halfway point of the season, the Draw systems take a back seat with a noticeable decline usually observed in the second half, but we do have not one, but two international tournaments currently in progress where backing the Draw in the knockout stages is perennially a successful strategy as readers will be aware.

They are the 2023 Africa Cup of Nations and the 2023 AFC Asian Cup - despite the year being 2024, the two tournaments were both postponed and retain their original years in the name.

Both are at the semi-finals stage, and after the Round of 16 and Quarter-Final matches, backing the Draw in Africa is currently showing a small loss of 0.12 units while in Asia the strategy is up 6.13 units

The ROI from the 24 matches is thus a little over 25% so far this year, and while a small sample size is fairly meaningless, across the 376 matches since 2004, the ROI of 23.7% is very impressive.
The CONFED (FIFA Confederations Cup) tournament has been scrapped and so of current competitions only CONCACAF's Gold Cup tournament is negative, although it did make a small profit last summer.

Prices are sourced from the very useful Odds Portal site and on this topic I had a comment from weirimdi - possibly not his real name:
Hello again,
I want to re-ephasize how awesome it is to read along your journey. You inspired i think a rather quiet audience to have a better view on sports/investing and betting as a journey.

A few questions. I use often and have built my own dataset for other sports thanks to killersports etc.
Do you know another resource like which has the odds for cup matches covered?

It is very tedious to get them from oddsportal manually.

Second question: what is your experience of the time when to take a bet?
Closer to kick off to be nearer to the market status or as early as possible?

Best wishes

The answer to the 'cup matches' question is unfortunately no I don't. I use Odds Portal for these matches, and while it is tedious, I'm grateful that there is at least a source available. The other challenge with these 

For the second question posed regarding when to place your bets, for my systems it is best to place them as close to the start time as possible since the closing price is what determines them to be selections or not. As I've mentioned before, a match may look likely to be a qualifier for a system, but a late move in the line, total or price may ultimately disqualify it, while the opposite is also true on occasion. Many times I've backed an outcome that ended up not being a system qualifier, and many times I've not backed one that did end up being a qualifier. It's one reason why the 'official' results I publish are never going to be exactly replicated in reality.

Thursday 11 January 2024

Fun Versus Maths

Posted on Sportshandle yesterday, an interesting look at betting attitudes / philosophy in the USA observed since it was broadly legalised in 2018 and how betting may evolve over there. Are the edges in US sports about to erode?

Is America Lousy With Bad Sports Bettors?

One hedge fund manager thinks so, but 'bad sports bettors' is a loosely defined term

by Jeff Edelstein

Thanos: Supervillian capable of wiping out half the world with the snap of his fingers.

Chanos: Super hedge fund manager capable of boosting the stock price of DraftKings while simultaneously ticking off nearly 100% of the sports betting public.

So yeah: Jim Chanos is a longtime, soon-to-retire, and famed — he called Enron going belly up — hedge fund manager. His specialty is, and remains, short-selling.

And DraftKings was in his crosshairs. He started shorting the company in May of 2021, according to a Financial Times article. But then this past July — and after taking a $10 million profit — Chanos dramatically shifted his position. The man who made a living betting against companies turned bullish on DraftKings — and on sports betting companies in general.

“The betting numbers have continued to be strong in the U.S., stronger than we thought they’d be,” he told the Financial Times. “The thing that we underestimated — that I think is going to be a benefit for all these companies for a while anyway — is what bad bettors the U.S. gamblers are.” 

Ooof. Snap.

Parlay away

When it comes to “bad” betting, Chanos may have a point. A look at the volume of parlay wagering, for instance, paints a picture of Americans who aren’t exactly looking for +EV opportunities on their betting apps.

Now to be clear, most states don’t break down parlay numbers. But those numbers that are available say plenty.

In Colorado this past October, 21.1% of money wagered at sports betting sites was on parlays. That’s up from 17.4% the previous year. Same for September, from 16.6% in 2022 to 19.3% in 2023.

Indiana? A similar story. More than 33% of handle in October 2023 was on parlays, up from 28.3% a year earlier. September’s numbers were close to those, 30.4% vs. 28.4%.

And make no mistake — more parlays equals more money for the sportsbooks. Overall hold percentage, according to the Financial Times article, is around 9% across American sportsbooks, up from 6% or so when PASPA was still the law of the land.

Or take this nugget from New Jersey, as highlighted by ESPN’s David Purdum: New Jersey bettors, through November of this year, wagered more than $2.5 billion on parlays — and the books won more than $486 million on those bets, for a hold of (avert your eyes) nearly 19%.

So of course — of course! — Americans are bad bettors, just like Chanos says.


Well, it depends on what your definition of “bad” is. Also, of “bettors.” 

Terrible, just terrible

“Are Americans bad bettors? Right now, probably.”

That’s Jeff Benson, the director of sportsbook operations for Circa Sportsbook, which, since its inception in 2019, has been the North Star for the sharp set.

As to the why?

“I think many people nowadays have the ‘bet a little to win a lot’ mentality, while viewing sports betting as more of an entertainment product,” he said.

And that, right there, is a major dividing line between how people — both inside and outside the industry — view sports betting. Is it a serious income-generating endeavor? Is it a fun and inexpensive hobby? Is it somewhere in-between? Is it both? Is it neither?

“What even is a bad bettor?” wonders Alun Bowden, senior vice president for strategic insight at Eilers & Krejcik Gaming. “It’s a silly concept. Are slot users worse gamblers than blackjack losers? Is losing 5% good and 9% bad? It’s an insane way to look at this.”

Bowden thinks trying to bridge this divide between serious bettors and 14-leg single-game parlay wish-upon-a-star-ers is better left to the philosophers.

“You can’t frame gambling utility and entertainment from the perspective of a winning, +EV bettor,” Bowden said. “It’s like the Wittgenstein thing of talking to a lion. You just don’t understand each other because your frames of reference are so different.”

And if the lion, in this case, is the +EV bettor?

“America is a nation of horrible gamblers — ignorant of the odds, ignorant of the science, ignorant of the math. They always have been,” said Capt. Jack Andrews, a professional gambler for a quarter-century and co-owner of Unabated, which seeks to educate sports bettors.

“If Jim Chanos didn’t realize that until just recently, then he missed Atlantic City in 1978, Mississippi in the early ’90s where they couldn’t build the casinos fast enough to meet the demand, Foxwoods and Mohegan Sun in the mid-’90s where they literally couldn’t count the money fast enough and had to resort to weighing it rather than counting it. All fueled by bad gamblers. 

“Here’s the thing,” Andrews continued. “The richest nation in the world, the nation with the most discretionary spend, combined with a nation that believes they can make something out of nothing, anytime they want. It’s a toxic recipe.”

And while that “toxic recipe” can mean recreational gamblers will lose in the long run by making bad betting choices, Andrews also thinks it’s to the long-term detriment of the sportsbooks themselves.

“Bad gamblers are not sustainable gamblers,” he offered. “Chanos and the bag holders of gaming stocks all think there is an unending supply of bad gamblers in the U.S. However, the ghosts of A.C. and Tunica show us that despite being bad with money, when Americans have no money they gamble less and they gamble more infrequently. They go from wagering $1,000 a week on a variety of games to wagering $50 a week on a variety of moonshot SGPs.”

To the moon!

“Americans do — and have always — liked the longshot of a little risk and a lot of reward. But it does not mean they are bad bettors,” said Las Vegas-based consultant Brendan Bussmann of B Global Advisors. “It just means they look at the opportunity differently and that will continue to evolve.”

Adam Levitan is one of the founders of Establish The Run, a site dedicated to fantasy sports, but he sees the same thing as Bussmann.

“If everyone just bet straight major market sides and totals, close to the start of games, and simply shopped two or three books for the best price every time, they’d only lose the juice. Their win/loss record would be close to even,” he said. 

If you sense a “but” coming …

“But the overwhelming majority of bettors don’t want to do that. Because it’s not fun. So they bet parlays and SGPs and gimmicks and other bets the books shove down their throats,” he said. “Bets that they’ll lose 5 percent, 10 percent, 20 percent in the long term. And that’s fine, not everyone is trying to profit. Some people are just trying to have fun.”

Tock, tick

So why here, why now? Why have American sports bettors embraced the moonshot? Connor Allen, the sports betting manager for 4for4 Fantasy Football, has a theory.

“I think a lot of this coincides with the rise of certain social media channels glorifying the idea of ‘get rich quick.’ TikTok, Reels, Twitter channels are oftentimes focused on making money quickly, which inevitably [in the sports betting world] increases the sportsbooks’ hold, because they are taking bets that have a much lower chance of hitting,” Allen said. “Even personally, if I tweet out a bet that is -110 with great reasoning vs. a fun parlay that is 50-to-1 or something, the 50-to-1 parlay gets significantly more engagement. I think that’s representative of a lot of the U.S. betting market.”

Ryan Sigdahl, an analyst at Craig-Hallum Capital Group, wholeheartedly agrees with Allen.

“Americans are drawn to low-probability-but-high-potential-payout bets,” he said. “It’s why the lottery is so popular. Same thing for why Americans love sports-betting parlays. Small dollars bet to get high entertainment, and the sportsbooks are able to hold a higher theoretical win rate. Both player and house are happy. Win-win.”


The big question — at least for the sportsbooks — then becomes whether this a sustainable way to run a business. Is Chanos correct in thinking the hold percentage will remain in the 10% range instead of the 5% range?

“I think it’s sustainable, as the recreational bettor loves a longshot and doesn’t bet enough to care that they lose a few bucks,” Sigdahl said. “The entertainment value is higher.”

Bussmann isn’t sure.

“The market continues to evolve,” he said, noting America’s newfound love of the parlay. “I think we need to see what all settles in before we can wrap up the American bettor in a pretty package.” 

Robert Walker spent a career managing sportsbooks such as the Stardust and MGM Mirage. He thinks it’s too early to pigeonhole American sports bettors and to make grand pronouncements about future hold percentages.

“It’s very early in the game,” Walker said. “I would expect the hold percentage to level off — or even decrease — as novice players become a little more sophisticated. I think the Nevada model — and I’m very biased — is an illustration of that.”

Of course, Walker’s assessment has a major unknown: Will America’s sports bettors wise up? Do they even want to?

“A little education goes a long way,” Capt. Jack Andrews offered. “Shop for the best price before you bet and you likely cut the house edge in half. Look for news related to the game you want to bet and you’ll likely cut it in half again. Consult with other bettors to see what you might be missing and it’s halved again. Use tools and resources to identify good bets from bad, and that house edge approaches zero or swings in your favor.”

Simple, right?

“I think we are still in the first inning and consumers are nowhere near educated yet, but once that comes — timing to be determined — then maybe you’ll see a more price-sensitive individual,” said Benson, Circa’s sportsbook manager. 

Sigdahl, for one, isn’t holding his breath for a Great Awakening in the sports betting world.

“The same reason you see people betting the middle of the craps table versus only playing the pass line with odds behind it,” he said. “The odds are materially worse, but [there’s] potential for bigger payouts” and the sense of fun trumps the math.

Andrews still holds out hope that for bettors, brains will win out over empty wallets.

“America was late to this party of legalized betting,” he said. “If we take the cue from other countries we’ll find that bettor education leads to a more balanced approach to betting. There are still plenty of bad bettors in the UK, Australia, and other countries which have been betting for years. However, bettors in those countries have realized that all that glitters isn’t gold in sports betting. It’s a more moderate spend.

“I think a lot of bettors will slowly evolve through attrition to be smarter bettors than they are now.”

Jeff is a veteran journalist, working as a columnist for The Trentonian newspaper in Trenton, NJ for a number of years. He's also an avid sports bettor and DFS player. He can be reached at