Enough Value

Peter Webb wrote a long post on the Lay The Draw. Big Al called it ‘an interesting post’, although to me, it added nothing substantial to the debate, and I was planning to ignore it, but after consideration, I’ll make a few comments.

No one is suggesting that a strategy as simple as laying every draw or backing every draw can ever work, so looking at 15,000 matches is of limited value. Peter also suggests that you can have value, but then differentiates between having value, and having ‘enough’ value. Value is value. If you stake using Kelly, or more realistically a fractional Kelly, the profits will come. Your stakes need to be appropriate for your selections, and for your ability to tolerate losses. The ability to handle a losing run, and no system can ever guarantee short losing runs, is a requirement for successful trading, but if you are finding value and can’t handle a losing run, then what exactly is the ‘enough value' that WILL allow you to handle losing runs?

I’m not sure what period the 15,000 matches Peter looked at spanned, but markets do change. As I mentioned a few days ago, even Ian Erskine, chief Prophet of the Lay The Draw philosophy, has recognized this, and is planning a tweak, although why he feels the markets have left the door open and vulnerable to this change is unclear. I have no idea how many apostles Ian has, but it’s reasonable to think that their involvement in the Match Odds markets for the recommended matches does have some effect on prices both pre-game and in-play.

As Peter says, edges do indeed fade to nothing. With the subjective element in the Lay The Draw system, it’s very hard to say definitively that it works or it doesn’t work. Some will hold their position after the first goal, (assuming there IS a first goal), others will trade out immediately, while others will wait for a while before trading out – so all traders will experience different outcomes.

XX Draw subscribers might well be trading the games, and laying off after 80 minutes or whatever if the game is drawn, but by simplifying the record keeping, it does make it easy to see the value (or not) of these selections.

It’s for this reason that I include Ian’s FTS selections in the table. Selections are exposed to the ‘world of truth’ I mentioned yesterday. A short sample like this (78) proves nothing of course, but then nor does a sample of 15,000 random matches. GIGO is the term I recall from my early years in IT.

It can be a fine line between using a large enough sample to validate your edge, and too large a time period so that your 'edge' evaporates.

Here is Peter’s post in full, or you can read it here:

Whenever you look at all strategies, no matter how complex, there is always some simple underlying key metric that is essential to whether a strategy works or not. This is also true in the case of ‘lay the draw’.

I’ve recently been looking again at value backing. There is a little more depth behind what I am doing, but one of the key issues you face if you pursue a value strategy is deviation from mean. You may be able to identify value, but if you can’t identify enough, you run the risk that an unfavourable run of results will see you draw down a significant amount on your capital before your judgements prove correct. Most people can’t bear this unless they are very patient and have very deep pockets. Neither tend to be realistic of any but the most experienced.

One of the areas I have been looking in-depth is at the moment, is the draw on football matches. I didn’t look at a few days, weeks or months but at over 15,000 matches. Below you can see a graph of the data I collected. In theory, if the market was efficient, you wouldn’t see much variation from the centre line. However, this only tends to occur over very long time periods. You would think that 15,000 matches would be defined as a long period. But from the graph however you can see that there has been a significant variation in returns from the draw over the sample period.

Basically the graph is showing you what would happen if you backed the draw. Any variation to the downside of this graph would be a net positive variance for people who lay the draw and the opposite is true. Of course this would also apply to people trading as well. If a match ends as a draw or not, there is a demonstrable chance you would have traded it correctly dependent on that result. The blue line is what happened to level stakes. In this case using £10 you would have faced a drawdown of £4.7k, the other line is my attempt at seeking value. This drew down as well but eventually recovered to break even.

The upshot of this data is even if you had your value judgement completely wrong you could have been fooled into thinking you had stumbled on some amazing new system, or that you were the god of tipsters. But the simple fact underlying your strategy would have been that you laid rather than backed. Essentially you could have ended up over a long period of time if you had the faith to stick to your initial thought. The problem of course is that, even then, your ‘edge’ would have eventually faded to nothing.

This isn’t just applicable to the draw, most events and selections in those events can go through these huge under or over runs. This tends to lead people to the view that somehow they have stumbled on something when in fact the market is just conforming to its natural variation. Anybody can be a ‘god’ for a short period of time, or in this case over 15,000 matches. But doing that over many, many years is much harder. When looking for advice or somebody to look up to, longevity is a key differentiator.

I'll tidy up the formatting later - Blogger sucks!

Overtime Handicap

For those of us used to our bets applying to the length of the normal game - i.e. excluding extra-time, it does seem a little strange that bets in the NBA apply to the full length of the game, with points added during any overtime periods (and there can be several) included. Many a seemingly solid Under bet has been lost due to a game going into overtime, and the same happens with the handicaps on occasion.

The game Peter mentioned in his Tweet was the Utah Jazz v Orlando Magic, and readers of this blog will know that the Jazz are fighting hard for a playoff spot.

My bet was on Betfair, where the Jazz were giving 'only' 8.5 - still a large spread to cover, but in front of their home fans, I fancied the Jazz to take care of a Magic side missing Dwight Howard, and who have already secured their own playoff spot. 

In the end, it was the Magic who surpassed themselves, with the Jazz perhaps a little fortunate to take the game to overtime. Incidentally, Magic games are often good for trading - with their three point shooting ability, a game can change fast. 

You might think it fair to settle bets on points totals and handicaps at this point, but that's not how it works, so the OT lifeline was thrown for us Jazz backers, and the Jazz took full advantage, ultimately winning by 10 points. I seem to be on the opposite end of Peter's NBA bets more often than not these days!

The Jazz have a crunch game against the Phoenix Suns on Tuesday night - expect them to win another close game with both teams scrambling for that last playoff spot in the West.

A good weekend for the XX Draw 'Extended' Selections, with no less than 5 draws from 11 selections so far this weekend. The three 'Classic' selections all had just one goal in them - so no draws, but at least the profit from backing these as Unders moves up to 26.28 points (ROI 19.5%).

XX Draws (Extended)

World Of Truth

Geoff wrote: "I completely forgot to send these over last week - typically found 4 out of 8 which was good from my bank perspective but not my league rankings."

Geoff's tipping is certainly hot right now, finding another 4 winning draws from his 8 selections this week, moving him up to fifth in the Friendly Tipster Table on points. Where Geoff finds the time to research matches at places like Telford, Braintree, Elgin and Brighton (I didn't even know Brighton had a team) I don't know, but it's hard to fault his results, even if he did fluke another 3-3 today. Here they are since April:

Geoff's Draws

A couple of one goal matches for the XX Draw Selections today, so winners on the Unders, but no joy on the draws. The extended selections saw two winners from six selections today though - the games at Bolton Wanderers and Chievo, and the German 'watch list' had a winner with Koln and Stuttgart drawing 1-1. After 11 extended selections, they are up 2.4 points. Early days, but I'll start to include these in the Tipster Table along with the Bundesliga selections. Of limited value perhaps, with the end of season reset coming up, but putting these results out there has some value.

I'll update the table after Monday night's results, as some of the entrants have an interest that night. 

I was recently reading about the rise in prosperity of China following the death of Mao. He was so feared that rather than risk upsetting him, he was given false statistics and not told that his ideas on rice production for example were not working. It was only when Deng Xiaoping took over that the 'world of truth' was introduced to Chinese agriculture. 

"Those who had good ideas, good luck and who worked hard prospered. Bad ideas were quickly abandoned. Good ones spread rapidly." 

Words that did make me think of us sports investors, even if I don't agree with the 'good luck' part, since - as my regular readers know - there is no such thing as luck, only random fluctuations of probability.

Ian Erskine found another winner for us today as Heerenveen drew 1-1 with Vitesse Arnhem - his third winning draw in the last six matches. 

Ian Erskine's 'Lay The Draw' Selections

I wasn't on this market when the opening goal went in, but my suggested strategy of backing the draw at this point would have been a winning one. 

Excuse the formatting issues: Blogger have made some updates, and they are awful. 

Possibly Hopefully

Another mention by Peter Nordsted (@petenordsted) on Twitter (much appreciated) and another flurry of activity on my 'followers' count. Peter wrote, and I quote,

"for possibly the best blog on sports betting / trading".

Possibly? There was an article on the BBC yesterday about language, and words losing their original meanings through abuse, and Peter's use of the word 'possibly' did spring to mind.

"Possibly: Perhaps (used to indicate doubt or hesitancy)". I hate to criticise the grammar and spelling of others, ok that's not true - it does give me great pleasure really, but the word Peter is looking for here is "undoubtedly" - meaning 'without doubt'. Hopefully, that advice will be useful to Peter. Oh wait, I just used 'hopefully' meaning 'it is hoped', whereas its original meaning is 'full of hope'.

Enough of this frivolity. Aston Villa are great value at 2.38 to beat Sunderland, and I like Newcastle United at 1.72 to beat Stoke City today.

For the big game in London this afternoon, I have Arsenal at 1.89 making 2.06 slight value. My price of 2.03 for Under 2.05 is very close to BETDAQ's 2.07.

It's getting late in the NBA regular season, and it's a good time of the year to look for matches where there is a large handicap. Last night / this morning there were a couple of opportunities. The Memphis Grizzlies were at the hapless Charlotte Bobcats (on a losing run of 18 games) and while a win for the Grizzlies was no surprise, the Grizzlies have no incentive to press on to win by 14 points, on the road, just to keep handicap bettors happy. They could be layed at 1.86. Similarly the Dallas Mavericks were at home to the eliminated Golden State Warriors, and while maybe showing off at home might be more understandable than away, it does often seem that teams build up a sizeable lead (18+) and subconsciously take their collective feet off the pedal, a subject I have commented on before. Coaches will rest star players, and the general mood at the stadium becomes one where the spectators are chatting, players are joking around, and the game is something of a sideshow. Dallas to win by 12.5 were 1.93. Teams do get blown out by 30+ points though, so this isn't a sure-fire winning method - just something to look at, and if you can get a decent price, it certainly makes what can be a boring game on the Match Odds market, a very interesting game on the Handicap. Unfortunately trading the Handicap market is next to impossible, so keep your stakes small as it will likely be a punt unless you want to trade out for poor value. 

Hopefully, no one wants to do that. Oops.

The Aqueduct

Subscribers to the XX Draw Selections this weekend have received twelve bonus selections, the 'extended' selections mentioned in this post a few days ago. The end of season period might not be the best of times to add these, but the selections held up well through April and May last year, picking up 10.5 points from 34 selections, and anything close to that would be very welcome.

 Had a small win on the IPL cricket this evening, following Mark Iverson in on the Chennai Super Kings v Pune Warriors. The peaks and valleys of the chart show this sport is great for trading, but unfortunately I don't care for cricket, and there seem to be far too many more knowledgeable people on the sport than me, and the prices move fast too!

Unfortunately I gave up most of that hard-earned profit with a dabble on the Atletico Madrid v Valencia Unders - I had 1.81 whereas 2.0 was available. Value, but no winner today. That'll teach me to pretend that a UEFA Europa League game really is a League game.

As predicted a couple of days ago, the play-off chasing Utah Jazz easily defeated the play-off eliminated Portland Trail Blazers last night, covering the 4.5 handicap comfortably 112-91. The NHL play-offs did not go quite so smoothly, as the Philadelphia Flyers conceded 10 goals - 4 goals in the first period, and 5 goals in the second period - at home, in an elimination game. Wasn't expecting that!

 As Scott Ferguson quipped on Twitter yesterday, and I paraphrase, if football management doesn't work out for Pep Guardiola, let's hope he starts a bookmaking company. Pep's suggestion that Chelsea are now favourites to reach the UEFA Champions League final seems a little off the mark, with Chelsea available at 3.15 to do just that. It was one of those matches where the underlying statistics actually increased Barcelona's rating slightly despite taking a loss.

 And while we are on the Chelsea v Barcelona topic, specifically the free tip to Lay The Draw in this match, Cloppa mentioned

"And the guy had the cheek to put on twitter that if you would have followed those tips last night you would have made money!"

How the Marseille v Caen game could have been exited with a profit escapes me, (early goal for the 'dog, equaliser soon after, game ended 1-1), but yes, with Chelsea holding on to win 1-0, anyone holding their 'Lay The Draw' position would have won, but you would have needed to stay in until the 81st minute or so before being in profit. A big risk in a game where the pre-game favourite was so dominant. 757 completed passes to 159!

 Older readers might picture the 'what have the Romans ever done for us?" scene from the brilliant "Life of Brian" here when I suggest that

"apart from the 0-0 games, or games where the Underdog scores first, or games where the first goal comes after 70 minutes, or games where the equaliser comes quickly after the opening goal - what is wrong with laying the draw?"

Lay The Draw Blues

The above chart is of the draw price (at 70') for today's Chelsea v Barcelona match - a game recommended as a Free Lay The Draw tip with the following write-up:

Chelsea v Barcelona (19:45)
The odds are currently 4.20 for laying the draw, which I think is very reasonable. Chelsea may be in good form themselves under Roberto Di Matteo and they may hold of Barca for 30-40 minutes, but Barcelona should win this tonight or at the least be in front at some point within the night. I’ll be entering now at 4.20 and looking to trade out at 7.80 after a Barcelona goal for a 46.15% profit. I’ll be making a judgement on when to exit based on how the game is panning out, if it remains 0-0 or Chelsea take the lead.

The risk of the underdog scoring first is clear, hardly given a mention until the end, and for the tipster in question, it was even worse in their other 'lay the draw' selection of Olympique Marseille v Caen which also saw the 'dog score first and anyone holding on to their position to the end take a hit. At least the tips are free.

Great result for Chelsea.

At The Races (Literally)

Somewhat tongue in cheek I suspect, but a couple of days ago, AL wrote

Cass, you young whipper snapper, how does one go about getting Ian's lay selections!? I wouldn't of minded a bit of that 3-3 action myself.

I actually couldn’t remember how I started to receive these e-mails, having never requested them, but after receiving a 2,379 word (I kid you not) e-mail from Ian yesterday, it appears that I must be a ‘Free’ member as a result of ordering his FTS (Football Trading System) some time ago. When I realized that the product was, as I’d suspected all along, not something worth paying for, I invoked the ‘money back guarantee’, but it seems that even though you request a refund, your e-mail stays on their mailing list. This happened with the Sports Betting Professor too, a handy trick if you are interested in looking for new ideas, although my experience with the two products mentioned earlier has only reinforced my opinion that if a golden goose is for sale, it’s not worth buying.

Incidentally, understanding Ian's membership structure makes choosing your mobile phone / service / plan seem like a piece of cake. The following levels of membership are offered: Mentors, Portal, Noir, Gold, Sapphire and Free - an idea that I will probably NOT be implementing for the XX Draw Selections. There's a lot to be said for keeping things simple.

In regard to the ‘Lay The Draw’ (aka FTS), it appears that Ian himself has now realized that, how shall I put this?, it’s value is limited. Ian writes:

“my FTS trading will be changing for the first time in 7 years. I have added new criteria and will be trading games slightly different. Those who understand gambling will understand that the Betfair markets are ever evolving and you need to evolve with them or die".

Well, good luck with that, although I’m not sure I follow the reasoning that, while the markets have evolved, they supposedly still leave an edge large enough for all the Lay The Draw traders to profitably exit their pre-match positions. It seems to me that would be one very inefficient in-play market, which is unlikely in a popular sport like football.

What should you do, knowing that after that first goal, a significant number of traders are trying to close their positions?

It doesn't take a genius to work out that the value is in backing the draw after the first goal at the (usually) now longer price. No less than ten of his last thirty selections have finished even, for a profit to level stakes at the kick-off prices of 14.25 points. Two matches were 0-0 so you would have missed those, and while I don't have the prices on the other eight after that first goal, it's not unreasonable to assume they would average significantly better than the prices at kick-off. In fairness, the ten games before that would have all been losers, with two more winners in the four before that, when my data runs out!

Ian often mentions, and indeed has a strong point, that the same matches can be given to a number of people, and all will emerge at the end with a different outcome. That same argument does make it easier to hide poor results though.

Met's Trading Diary had an interesting post yesterday. Apparently ATR (At The Races) showed several people at Southwell racecourse, or in fields adjoining the racecourse:

"with laptops, iPads, spotters with binoculars, waiting for the stalls to open. Amazing scenes. If you are betting in-running at home - give up - you've got no chance. - Matt Chapman

Check out the video that Mets has posted.

And once more, on the topic of ROI, Betfair Banter wrote that

The ROI for the prem selections is -47.67% ROI for the ‘week’ and although this sounds bad it’s from a very small sample size (3 matches) and has little effect on the overall ROI which is still 23.08%. To be honest weekly evaluations are pretty meaningless and monthly ones would be more indicative of performance.

I would suggest that it is only after at least 100 bets that this number is in any way meaningful. It goes up and down like a whore's drawers while the number of selections is less than three figures, and as I wrote a couple of posts ago, while ROI is good for show, what is really more important is the profits your system generates. I didn't post the Tipster Table up from last weekend, sharp eyes will see why, but here it is:

Chelsea v Barcelona tonight, and my pricing for this game is:

not a million miles from Betfair's current:

My Under 2.5 price of 1.87 suggests a little value at 2.1.

Finally, I had some interest following my post on how my EPL teams are currently rated using my Elo based formula, and here are my current rankings for Italy's Serie A:

Parma and Fiorentina are two teams that are perhaps placed a little low in the league table relative to their performances, while Palermo may be over-achieving.

For anyone wondering about the numbers to the right of each team, they are each team's standing at the start of the season.

Where to insert the promoted teams each year is a perennial challenge, but all three are close to their entry positions.

Out Of Sync

Prior to last night's match at Arsenal, Wigan Athletic were positioned in 9th place in my Elo based ratings, surprisingly high if you only look at the league table, though perhaps not so surprisingly if you look at the last-6 match form table, where they are now sitting in third spot. For a team that was traded at 1.16 to go down not so long ago, to say they have turned it around is a massive understatement. After last night's data was entered, Wigan are now up to 8th, after starting the season in 12th place. All wins are not the same in the Elo world, and I look at more than just the final score, which can often give a false impression.

One other team with a big differential between my ratings and the table is Liverpool, who I have currently ranked third, suggesting their underlying performances haven't been so bad as their results (prior to Saturday anyway) have been of late.

My bottom three is descending order are the same as the league table, but just above the line looking up, I have Stoke City, Swansea City and Queens Park Rangers - some teams to consider for the relegation market next season. Of the non-promoted teams at the start of the season, my bottom three rated teams were Wolverhampton Wanderers, Bolton Wanderers and Sunderland.

Teams desperate to win can be worth a back in other sports too when it gets towards the end of the season. In the NBA's Western Conference, three teams - Utah Jazz, Houston Rockets and Phoenix Suns (Portland Trail Blazers were eliminated last night) are all chasing the last play-off spot, with Portland hosting Utah in two days. I wonder who will be approaching that game with a winning mindset!

I have had to remove the blog Daily25 from the blogroll. Graeme Dand sent me an e-mail to say that there was malware associated with this site, and so it was removed on Sunday, the same action being taken by Andy Pandy over at My Sports Trading Journey.

No details have been received as to how an increase in goals would make the draw more likely, but a vote of support from Tony for the conventional wisdom which is appreciated. Tony asks:

Does Al have a blog?

Not that I am aware, but it's an idea for him. He certainly writes a lot, but unfortunately most of it is in the form of riddles, with no actual evidence to support his claims. He could very well be religious in fact.

Finally, a quick tip for those of you wishing to improve your Apple experience. Simply rename your iPhone 'Titanic', and you'll find it syncs much faster.

Related Markets

I think that most readers understand the logic that in football, the less probable that goals are, the more probable it is that the result will be a draw, but apparently not all.

(There's a reason why the draw is a lot higher a price in a sport such as Rugby or Aussie Rules).

Big Al is back, writing that

"If the market's expectation of total goals in a match changes, then other expectations change too - including the most important variable of the lot."

Well yes, that was kinda my point, but 'the other expectations' are that other markets will move in synch.

If the Under 2.5 goals price moves out, then the Under 3.5 goals price would be expected to move out, and the Correct Score 0-0 price likewise.

Big Al says:

Your claim that the draw price always has to drift when the unders price drifts is quite simply not true.

I have no idea if the price moves were correct or not in the match you mention, but your blanket statement is incorrect.

It would be a strange football pricing model where an increase in the input parameter of goal expectancy would result in a shortening of the draw price. Simply put, the 0 and the 1 scores that comprise much of the draw price are now less likely, and 2-2 draws or higher are a lot less frequent.

Unsurprisingly, Big Al once again fails to offer any ideas or evidence as to how such a divergent move could be explained (ruling out the Serie A end of season gentlemen's agreements of course) but I would be open to hearing any sensible thoughts to explain this strange behaviour. Am I on my own on this, or do others find the move unusual?

Coincidentally, A Football Trader's Path had a post on goals today - worth a read, especially the piece on how "goals beget goals" - a further complication when pricing up football matches.

Grow For Dough

Thanks to Gundulf for pointing out that the last line of my modified slide in the previous post should have read "Accepts Losses With" rather than "Accepts Outcome With" since, as he noted, not many casual punters are irritated by a win.

There was some interesting movement in the pre-game Lorient v Montpellier markets. This game was the third and final XX Draw Selection of the weekend, and for some reason the Under 2.5 price moved out from 1.58 of three days ago to 1.76 at kick-off. That's a big move by any standards, and as all readers should by now be aware, this should have been accompanied by a drift in the draw price. My draw bet was matched on Friday at 3.35 (the high was yet at kick-off was down to around 3.2. Both moves cannot be right, so a doubling up of the Unders seemed too good an opportunity to miss. Turned out not to be the case. With Lorient taking the lead fairly late, I felt any next goal would come from a title chasing Montpellier, and that both teams would settle for the 1-1, but Lorient scored a second and the Under was in jeopardy - for all of a minute, until Montpellier pulled one back, and I was back to needing an equaliser, only without the safety net of the Unders. A disappointing final result of 2-1.

Ian Erskine's Draw Lay Selections just keep on winning, with another winner in the Malaga v Real Sociedad match today.

A good comment from Webbo on the topic of increasing turnover but at the cost of the ROI:

The power of turnover!

I have also recently realised just how benefitial making more bets can be even if the ROI goes down.

Now I'm making more selections I'm also less bothered about individual bets and am much more able to display the detached trait and accept results with equanimity.

I can certainly identify with this. The XX Draw Selections are relatively few, maybe 160 this season, so it is easy to become emotionally attached to them. While it's not quite the same as diversifying your stock selections, it's a similar idea. Having nine of ten selections a week makes it a lot easier to achieve the equanimity we seek. With just a handful of selections, although we know better, a set of poor results can be irritating, and as with today's previously mentioned Lorient v Montpellier match, I watch a little more nervously than I should as the clock ticks down, knowing that I am responsible for thousands of pounds on the draw - how else to explain the plunge in the draw price?

There was a great post on Scott Ferguson's blog on the ROI percentage subject almost exactly a year ago, a good time to refresh our memories - the full post is here, but the concluding sentence sums it up:

Return on Investment for show, Rate of Bank Growth for dough. £, not %. As I’ve always said, “Value doesn’t pay the bills”.

Football Elite went for a shortie today, picking Nancy at 1.84 (DNB) to beat Bordeaux, but they came up short drawing 2-2 with Nancy conceding a 90' equaliser - so a push there.

While my ratings apply to league games, and the FA Cup is a different beast, it's hard not to take an interest in the upcoming game. If this were a league game, I would have the Under 2.5 goals price at 1.84, and while the 1.99 available isn't great value, it's an edge I am comfortable with for a 'fun' bet.

Personality Traits

Betfair Football Trading pointed me to a video on trading over at You Tube - and as Gundulf said, it is worth ten minutes of your time and I agree, even if (like me) you know everything already. I also watched the two preceding videos on setting up your bank and on staking, and again there is some good advice in there, although the impression that you can build your bank by 5% a day with no hiccups is a little unrealistic. Rich from Racing Profits, does emphasise the importance of selections being profitable to level stakes - making Level Stakes Profits (LSP) as he calls it, and overall it's a good set of videos, even if your interest is outside of racing.

I liked one slide where Rich contrasted the psychological characteristics of the 'Betting Pro' against those of the more casual 'Punter'. I've modified it slightly so that the 'Casual Punter' categories all rather neatly (in my opinion) now begin with an 'I', but the content is essentially the same as that in the video:

There was also a quote from Rich, which was that:

The quality of selections you make or use on a daily basis are the bricks that will build your income, but the mindset and approach you adopt to your business and betting activity is the cement that holds it all together.

A flowery way of saying that first and foremost you need to have an edge, but that an edge without solid money management strategies and a disciplined approach is not enough to bring in profits.

I spent last night in the cells (OK, those of my Excel spreadsheet - someone on Twitter suggested it would make me sound edgy), looking at tweaking the XX Draw Selections to generate more picks, albeit at a lower ROI. 

The current, let's call it the 'Classic', version has in close to three seasons generated 334 selections, with an estimated profit of 54.05 points, an ROI = 16.18%, while the 'Expanded' option under consideration would have generated 1,108 selections for an estimated profit of 125.7 points, and an ROI of 11.35%.

Interestingly, with the typically higher draw price in the Bundesliga, the returns from the current (very selective) picks are still slightly in profit, while under the expanded selection criteria, they would be very slightly down - the opposite of Serie A.

I'll update the numbers at the end of the season, one which seems to have flown by faster than ever. I'm told time has a habit of doing this as one ages, since one year of your life when you are 10 is a whole lot bigger a percentage than it is when you are 50.

And on the day the world commemorates the centennial of the Titanic's sinking, news that the chief designer of the Titanic had a lisp - that's unthinkable.

Cann Tables

As regular readers will know by now, I am not a big fan of the conventional League Tables. For betting purposes, they are at best of little value, and at worst, downright misleading. I won't mention the futility of using them before the season has already started, but late in the season, their use is also limited. The biggest problems I see with them is that the recent form is hidden, and the difference between teams is hard to identify. The tables are listed by teams with their corresponding points totals, and teams separated by goal difference look exactly the same as teams separated by twenty points. The excellent A Beautiful Numbers Game today had a post on Cann Tables, which addresses this problem by listing the points totals for teams, and then the teams (if any) with that total. An example is this one from Ian Eliowart's website:

This does show at a glance how much, for example, the Liverpool clubs are adrift of the top six - something not immediately obvious from the conventional league table. My own preference is to used a modified Elo ratings system, which has its disadvantages (e.g. a sudden dip in results can be slow to be reflected if the underlying performance remains strong, or a dramatic change in team personnel will not be immediately reflected, but overall it works well).

They didn't work so well today though, with the run of Unders on the XX Draw selections coming to an end in the Bundesliga at Schalke '04 v Borussia Dortmund (1-2). It is quite likely that the Bundesliga will be dropped at the end of the season. With a strike rate of 18 from 63 after today, they are the weakest of the five leagues I follow, hardly surprising when they had an average goals per game of 2.87 heading in to today's games. Ian Erskine selected the 3-3 draw between Bayer Leverkusen and Hertha Berlin as his lay selection, a result that not only bumps up the average GPG in Germany, but also increases the profits from backing these lay selections!

I have been trialling the inclusion of more matches in the non-Bundesliga leagues. Prior to today, the results over three seasons of the Classic XX Selections would have been 110 winners from 334 selections (32.9% - 3.04). Using the Expanded Selection criteria from England, France, Italy and Spain, the results would have been 301 winners from 926 selections (32.5% - 3.08). Similar strike rate, but a lot more selections, an important consideration. It is also worth noting that the average price on Bundesliga selections is correspondingly higher than in other leagues:

If I continue the service next season, it will likely be modified along these lines. I'll be e-mailing subscribers for their thoughts and ideas before making a decision. I've been most impressed with the lack of complaints of whining when results are poor, something I was concerned might happen when the inevitable losing runs at these prices come along.

I had some more selections in Italy this weekend, but following the death of Livorno's Piermario Morosini today, it looks as if these games will be postponed.

Another long-priced (33/1) winner today in the Grand National, of academic interest only to yours truly, but another ding against anyone suggesting that this race is anything but entertainment and a lottery. Al took my post title of National Lottery a little too literally:

Cass old boy, I would say that betting on the national is nothing like doing the national lottery.

For one, you have a 44/1 chance of picking a winner and 7m/1 chance of winning the lotto.

The odds of winning the lotto are so stacked against you that there is no value in even playing unless the jackpot goes up to a certain level.

Not so much of the 'old boy' thank you. I am getting quite sensitive about my age these days. My comment that

The chances of finding a winner may not technically be in the 'lottery' realm, but as sports go, they're not far off.

was very much tongue-in-cheek, although the inability of many to differentiate between say a 1 in a 1,000 and a 1 in 10,000 shot is well known.

National Lottery

"It's a myth that the National is a lottery," says top sports trader Matt Finnigan. "The last 10 winners have all won listed or graded races beforehand."

I have no reason to doubt the last part of that statement, but the first part is certainly misleading.

The last 10 winners have been at prices ranging from 7/1 to 100/1. Two joint favourites have won, and one favourite. Go back 10 more years and you can add in two more favourites. 30 more years, add one more favourite and a joint favourite. Four favourites, and three joint favourites in 50 years with two 100/1 winners is hardly a ringing endorsement of form showing through. The chances of finding a winner may not technically be in the 'lottery' realm, but as sports go, they're not far off.

But good luck to anyone betting for more than a little entertainment. Trivia item: One hundred years ago, the race was won by Lester Piggott's granddad Ernest, (jockey, not horse), the first of his three National wins. Not a lot of people know that.

As I wrote three years ago, I can well recall watching black and white TV with my Dad in 1967 as Foinavon won - one of the 100/1 winners mentioned earlier. I'm also of an age where the Grand National will forever be associated with Red Rum, and in 1976 I remember listening to the Grand National (Rag Trade 14/1) on the terraces at Stamford Bridge as Crystal Palace came up short in their first ever FA Cup Semi-Final, but these days, I can't even be bothered to watch it.

The FA Cup Semis are far more interesting. The game today will be Liverpool's first FA Cup Semi-Final at Wembley ever, and Everton have only one such appearance (three years ago, they beat Manchester United on penalties). Chelsea and Tottenham Hotspur have been more frequent visitors, with Chelsea playing there four times, winning all four, and Spurs three times winning one.

The 'recent' history of all FA Cup Semi-Finals shows teams likely to win to nil - 14 of the last 20 matches have been won to nil. Under / Over is 12/8 for what that's worth. Probably not too much, given the small sample size!

The Unders at 1.76 is slight value today, by the way.

Thanks to Pete Nordsted (@petenordsted) for his mention on Twitter, which resulted in a boost to my followers count.

And finally, to return to the last post on full-time trading. Lambretta said that:

I had a corporate career and all the trappings that come with it. Had I not, perhaps I would not be a full time trader today. However, I make more than I ever did in corporate and work approx 4 hours a day, which leaves plenty of time for hobbies. As for the industry changing, well risk taking is what we traders do.

There's a difference between risk taking with spare change, and giving up a combined lifetime income likely for most of us to be seven figures. I do concede that there are very few jobs for life around these days, and a career can be derailed at short notice by downsizing, but if you have close to 40 years ahead of you, earning an average (median) £25,123, then that is a lot of money to be giving up. I.S. commented:

I'm somewhere in between on this subject. It's true what you say, but if the darkest scenario happens you can always go back to 9-to-5ing. It's not like you choose your path and there's no possibility to correct the decision. The corporate world will always be on the look for trained monkeys that will sit behind the computer, click buttons and create huge profits for them.

One comment there is that it might not be that easy to step back onto the corporate ladder. Industries vary of course, but coming from an IT background, I know that skills soon get rusty, and large gaps in a CV are not looked upon favourably. Lazy Trader said:

Like most things in life until you've tried it yourself you'll never really know what to expect. Luckily for anyone considering going full time they'll always be prophets like Cassini to give them the bad news :)

Indeed, that first part is true. My thoughts on this subject are admittedly negative, (I am writing primarily from my own perspective, and for me it makes no sense to go full-time), but the decision for anyone has to be theirs, based on their personal situation - age, responsibilities, prospects etc. It's one thing being 60, in a low paying job, working for a company in a declining industry, with a paid-up house, savings in the bank and no responsibilities, and have traded profitably for some time - it's another to be 21, with a decent degree, no money, no house, but a solid future ahead of you in a noble profession.

My words may come across as those of a doomsayer, but they are merely meant as a warning that the grass might not be quite so green all over on the other side as you might initially think.

All That Glisters

Lambretta has a post today, extolling, I think, the virtues of trading for a living. Included in the post over at Thoughts of a football trader are these lines:

What many, me included, try and do is make the same amounts they hear others are making or what they see in videos.

That may be true of some people, but it doesn't include me, and I would hope most people are smart enough to understand that we are all coming to this activity from different places. Some are students with plenty of time, but little money, while others may be in retirement, with relatively large sums of money to play with, and the rest are somewhere in between, and also we have different levels of experience with gambling and investing. If I hear that others are making (decent) money, and the tales actually ring true (the nature of gambling means that there are a lot of false prophets to be wary of) then it is good to know that profits can be made, but it is nonsense to suggest that anyone seriously tries to match the returns of a stranger with whom they share very little in common. Lambretta continues:

Yes, it is possible to make more than you did/do in your 9 - 5, but the real benefits lie in your quality of life - Being your own boss, working your own hours, spending time with significant other and/or kids, having the ability to do what you want, when you want. Ask yourself this, if you were paid as much as you earn/earned in your 9-5 but with all the benefits listed above, would you do it? Of course you would.

Would we? I think again that this decision all depends on what we consider our future prospects to hold. Salaries go up each year. Benefits increase each year. Vacation time, sick time - all these factors need to be considered. Try getting a loan for a house with no documented income. You're unlikely to get the best interest rate, a hidden cost that will add up over the years. You might be making £25,000 a year now, but after a few years this number will often be much higher. The betting industry is constantly changing, and edges don't last for ever - if you have found one, then what's to stop someone else from finding it - so future earnings from betting are uncertain. There is also the possibility of regulatory changes being introduced, the possibility of a ban on in-play trading for example, not to mention the dislike in the industry for consistent winners. Bookies will ban you, making Betfair's decision to tax you at up to 60% seem almost generous. Which it is if your only viable option is that exchange, but it highlights the risk of thinking that these golden days will last for ever. I now have just £4,590 to go before hitting the current barrier, but there is no reason to suppose that this barrier will not be lowered in the future, especially if they see customers continue with them. Not that it ever seriously crossed my mind, but had I decided to quit a secure job to go full-time, that would be a decision I would be regretting. Lambretta adds:

So, don't push or force yourself to earn what you think you should be earning through trading, strive to make what you do already. Once you've achieved that and have all the benefits that come with it, then you can allocate time to improving your income.

Striving to make what you do already, again makes no sense. Opportunities to make money are often out of your control. Value may just not be there all the time. It's the old canard about targets and limits. They are destructive. You strive to make as much as you can - you don't stop because you have reached some arbitrary amount, or because it's 5pm. Some days may see umpteen opportunities, other days none.

My advice is to bet and trade as a (hopefully lucrative) hobby, and to focus on a lasting career during the day. Trading is fun, when it's a hobby, but I suspect not quite so much fun when it's your only source of income. Your quality of life is much higher with a career, and a profitable hobby, than it is from just a full-time hobby. And six weeks of paid holiday time is always nice too!

Bologna v Cagliari

Another very short priced draw in Serie A tonight, as tends to happen every year as Spring arrives.

Bologna and Cagliari shared the points in a 1-1 draw back in November, and at the time of writing, the price on another draw is just 2.78. The corresponding fixture finished 2-2 last season. Bologna are no stranger to this - a game at home to Cesena last May was priced at 1.4 with bookmakers, at least those who offered prices, result? 0-0. If the game is played 'fairly', there is value in the Unders at 1.68, and I have Bologna priced at 2.2, (2.68 available), but I prefer my sports to be played in the right spirit.

Liam Brady:

When a draw suits both teams in Italy, the game will end in a draw. It's all to do with the mentality of the Italian people. They see nothing wrong in such an arrangement.

Funnily enough, since I started my Elo based ratings about three years ago, in Serie A there have been 43 matches where the home team is favoured by 0.6, and 18 of those have resulted in draws - an implied price of 2.39 - so perhaps that 2.78 is value after all.

Update: A little more research shows that last season there were 17 matches in Serie A where the draw was priced at 2.8 or lower. Four matches involved Bologna, and four involved Cagliari. Of those 17 matches, 7 finished as draws, and 11 as Unders.

Hold The Fruit

Better late than never, but I had a comment while I was away from Dougie, who wrote:

Hi Cassini - came across an interesting article on Forbes.com today thought the readers might like.

Here's an extract that I think anyone who subscribes to any type of tipping service should take note -

I want to get bouquets when I deserve bouquets, and I want to get soft fruit thrown at me when I deserve it. But I don’t want fruit thrown at me if I’m down 5 percent, and the market’s down 15 percent — I’m going to think I deserve a bouquet for that.

It's an interesting article, written by Warren Buffett himself, but while in some ways the worlds of business investing and sports investing are similar, in many ways they are quite different.

The aphorism "a rising tide lifts all boats" often used to describe individual stocks in a bullish market, has no parallel in the sports world. The probability of a bet coming in is independent, while good results for one major oil company for example, will more often than not mean a rise in the share price of other same-sector companies.

Place a bet on a sporting event, and there won't be any dividend to soothe the pain as it heads south.

If your tipping service is down 5%, it might make you feel a little better that others are down by even more, but it shouldn't. You're still losing money, albeit at a slower rate, but the idea is to make money. No subscribers will be buying you bouquets.

It is interesting to compare the results of services or selections of other people though. The consistent results of Football Elite were key to making me realise that a disciplined approach for a sport such as football can be profitable long term, and other results do provide a useful benchmark.

It's helpful to compare my XX Draw selections with other systems too. If I see other systems doing better, then there's an incentive to learn and improve, but that desire should always be there anyway. It's also worth mentioning that not all subscribers to a service have the same tolerance for risk. If the service is in the business of looking for winners in the 1.5 to 2.4 range, losing runs will be a lot shorter than those you will experience with a draw service. The Longest Losing Sequence on the XX Unders going back to Jan 1, 2011 is just 4, while Griff's draws hit a losing run of 20. Many people would settle for a lower return and a steady strike rate over a higher return accompanied by long losing streaks.

Anyway, here is the Forbes article in full:

Benjamin Graham had been my idol ever since I read his book The Intelligent Investor. I had wanted to go to Columbia Business School because he was a professor there, and after I got out of Columbia, returned to Omaha, and started selling securities, I didn’t forget about him. Between 1951 and 1954, I made a pest of myself, sending him frequent securities ideas. Then I got a letter back: “Next time you’re in New York, come and see me.”

So there I went, and he offered me a job at Graham-Newman Corp., which he ran with Jerry Newman. Everyone says that A.W. Jones started the hedge fund industry, but Graham-Newman’s sister partnership, Newman and Graham, was actually an earlier fund. I moved to White Plains, New York, with my wife, Susie, who was four months pregnant, and my daughter. Every morning, I got on a train to Grand Central and went to work.

It was a short-lived position: The next year, when I was 25, Mr. Graham—that’s what I called him then—gave me a heads-up that he was going to retire. Actually, he did more than that: He offered me the chance to replace him, with Jerry’s son Mickey as the new senior partner and me as the new junior partner. It was a very tiny fund—$6 million or $7 million—but it was a famous fund.

This was a traumatic decision. Here was my chance to step into the shoes of my hero—I even named my first son Howard Graham Buffett. (Howard was for my father.) But I also wanted to come back to Omaha. I probably went to work for a month thinking every morning that I would tell Mr. Graham I was going to leave. But it was hard to do.

The thing is, when I got out of college, I had $9,800, but by the end of 1955, I was up to $127,000. I thought, I’ll go back to Omaha, take some college classes, and read a lot—I was going to retire! I figured we could live on $12,000 a year, and off my $127,000 asset base, I could easily make that. I told my wife, “Compound interest guarantees I’m going to get rich.”

My wife and kids went back to Omaha just ahead of me. I got in the car, and on my way west checked out companies I was interested in investing in. It was due diligence. I stopped in Hazleton, Pennsylvania, to visit the Jeddo-Highland Coal Company. I visited the Kalamazoo Stove & Furnace Company in Michigan, which was being liquidated. I went to see what the building looked like, what they had for sale. I went to Delaware, Ohio, to check out Greif Bros. Cooperage. (Who knows anything about cooperage anymore?) Its chairman met with me. I didn’t have appointments; I would just drop in. I found that people always talked to me. All these people helped me.

In Omaha, I rented a house at 5202 Underwood for $175 a month. I told my wife, “I’d be glad to buy a house, but that’s like a carpenter selling his toolkit.” I didn’t want to use up my capital.

I had no plans to start a partnership, or even have a job. I had no worries as long as I could operate on my own. I certainly did not want to sell securities to other people again. But by pure accident, seven people, including a few of my relatives, said to me, “You used to sell stocks, and we want you to tell us what to do with our money.” I replied, “I’m not going to do that again, but I’ll form a partnership like Ben and Jerry had, and if you want to join me, you can.” My father-in-law, my college roommate, his mother, my aunt Alice, my sister, my brother-in-law, and my lawyer all signed on. I also had my hundred dollars. That was the beginning—totally accidental.

When I formed that partnership, we had dinner, the seven of them plus me—I’m 99 percent sure it was at the Omaha Club. I bought a ledger for 49 cents, and they brought their checks. Before I took their money, I gave them a half sheet of paper that I had made carbons of—something I called the ground rules. I said, “There are two or four pages of partnership legal documents. Don’t worry about that. I’ll tell you what’s in it, and you won’t get any surprises.“But these ground rules are the philosophy. If you are in tune with me, then let’s go. If you aren’t, I understand. I’m not going to tell you what we own or anything like that. I want to get bouquets when I deserve bouquets, and I want to get soft fruit thrown at me when I deserve it. But I don’t want fruit thrown at me if I’m down 5 percent, and the market’s down 15 percent—I’m going to think I deserve a bouquet for that.” We made everything clear, and they gave me their checks.

I did no solicitation, but more checks began coming from people I didn’t know. Back in New York, Graham-Newman was being liquidated. There was a college president up in Vermont, Homer Dodge, who had been invested with Graham, and he asked, “Ben, what should I do with my money?” Ben said, “Well, there’s this kid who used to work for me.…” So Dodge drove out to Omaha, to this rented house I lived in. I was 25, looked about 17, and acted like 12. He said, “What are you doing?” I said, “Here’s what I’m doing with my family, and I’ll do it with you.”

Although I had no idea, age 25 was a turning point. I was changing my life, setting up something that would turn into a fairly good-size partnership called Berkshire Hathaway. I wasn’t scared. I was doing something I liked, and I’m still doing it.

Winning At Scrabble

I would love to be able to say how much my batteries are re-charged after a fortnight away, and how my mind has miraculously come up with some brilliant trading strategies that somehow never made it to the forefront of my consciousness previously, but the truth is that I pretty much forgot all about betting and simply enjoyed what was possibly the last family holiday with my two (now grown) kids. At 23 and 21, with graduations later this Summer and both in full-time work at some point in the not too distant future, scheduling similar trips in the future will be a challenge. If you have kids, enjoy them. They grow up fast.

The selection of Maui as our destination proved to be fortuitous. Our choice of destination was decided by each of the four of us drawing a letter from the Scrabble bag. After an 'M' and an 'A', it was looking like possibly Guam or Malo might come in, but when the 'I' followed it was down to Mali or Maui. Mrs. Cassini was rooting for Siam, but a reading of the rules made it clear that former historical names did not count. Fortunately, the fourth letter was a 'U' and Mali was out of the running. A close call, as a vacation there would not have been quite so relaxing. We may have to reconsider the selection process for any future trips.

Maui is a different world. Eleven time-zones from the UK, and it was easy enough to lose track of time altogether, never mind trying to schedule time to watch games. At the request of my son, we did make sure to catch the Chelsea v Benfica game last week, with his Dad having a small punt on the -0.5 / -1 AH market for a small profit. There really is a lot more to life than trading sports, but the latter can help you to enjoy the former. While looking at the blog stats for my time away, I noticed a keyword search entry of "Money can not buy happiness but it much more comfortable to cry in a ferrari then on a bicycle" which is very true (at least I guess it is - I own a bicycle, but no Ferrari yet!). I didn't even get around to posting anything on the blog, although the daily hit count never dropped below 249, which is a little surprising, and I am two weeks behind on reading the updates of others.

Back to reality then, and the first order of business is the Friendly Tipster Table which is now up to date I believe, although there were no selections from Griff for the past two weekends, nor from Geoff for this weekend, and the Green Pullover has pulled the plug on his draw selections to focus on more profitable areas. The XX Draw Selections have had a stellar three weekends with five draws from the last nine selections, and currently eight consecutive winners on the respective Unders.

Sunday's game was 2-0 after 10 minutes, and I suspect most subscribers were not expecting anything from the game, but the remaining 80 minutes plus time added on produced no further goals for a perhaps lucky outcome. The Koln v Werder Bremen game also saw two goals before half-time, but again none in the second.

The XX Unders lead the table with an ROI of 19.1%, with the XX Draws in second spot with an ROI of almost 12.8% - from 129 selections.

It was interesting to note that on three of these recent selections, Football Elite opposed me, with Nice v Olympique Marseille and Sunderland v Tottenham Hotspur winners for me, while Newcastle United v Liverpool was a winner for FE. The Newcastle game was actually one of those where my heart didn't agree with the spreadsheet's selection - clearly Liverpool are not in form, while Newcastle are - and the Elo ratings sometimes appear to change too slowly to capture dramatic changes in form, especially when adjustments are not based solely on results - but the spreadsheet seems to know what it's doing overall, and it would be more galling to ignore it and have the selection win, than follow it, and lose. Football Elite's two 'non-winners' were backed with the Draw No Bet, a strategy Matt seems to be using more often these days, so no losses for the service there, and he has been on a roll since early February, up approximately 10.4% on the season after a slow start.

Backing the draw in Ian Erskine's Lay The Draw Selections has produced three winners from the last nine selections, and this method is in fourth place in the table with an ROI of 8.6%.

Mark J's selections continue to hover around the break-even mark, currently slightly down.

Peter Nordsted's Drawmaster returned to winning ways on Saturday, with winning draws in the games at Liverpool and Norwich City, but still in the red slightly on the season.

And the full table, to the best of my knowledge, now looks like this: