Fudgey Business

The perils of trading the Next Manager Markets from the outside. It must be true, the bookies 'were shocked' and it's in the Daily Star:

VILLAGERS in the sleepy home town of new Liverpool boss Brendan Rodgers raked in a fortune by backing him for the job.

Shocked bookies suspected a leak and suspended betting on him after a string of big-money punts, despite the then Swansea chief being a 10-1 outsider.

A Daily Star Sunday investigation can reveal more than £100,000 was wagered from the small village of Carnlough and neighbouring Larne in County Antrim, Northern Ireland.

And delighted locals were celebrating a monster payout when their hero Rodgers – nicknamed Fudgey – was named the new Kop boss.

The betting sensation has now prompted claims that punters had inside ­ information that Rodgers, 39, had been offered and accepted the Liverpool job.

Shortly after 3pm last Saturday, ­Northern Irish bookies slashed odds ­dramatically as a flurry of bets came in for Rodgers – before closing the betting.

McLeans bookies cashier Laura ­Gribben, 32, who works in the Larne branch, said: “We stopped laying bets on Rodgers on Saturday because everyone was wanting to get hundreds on him.

“A rumour that he had got the job spread like wildfire. My dad and his mates even got a bet on it.”

Nearby betting shop Toals also ­suspended betting.

The rumour is said to have started at McAuley’s pub, where Rodgers’ brother Declan runs the Cheyennes disco upstairs, where Brendan used to dance.

Barmaid Ciodhna McCormick said: “All the lads in the pub backed Fudgey last Saturday.”

Rodgers was an outsider, having turned down Liverpool’s approach to talk to him when the heavy punts were laid.

One bookmaker said: “It started around 3pm on Saturday.

“Out of nowhere we were seeing big bets being placed online and over the phone – and every one of them was from Carnlough or the surrounding ­areas.

He added: “It was only when I got texts from ­contacts at other bookmakers that we ­realised this was Rodgers’ home town. That was when we started to panic and had no choice but to keep chopping the price.

“Seven-to-one, 9-2, 3-1, 2-1, evens – but the money kept coming. 

“You’d see the ­surnames cropping up too, entire families were lumping on. When you see a pattern like that you ­presume there’s inside info ­going round and it looks like they had.”

In other news, scientists have discovered that water is wet.

Productivity

As I had predicted at the start of the series, the Western Conference Finals will now go to six games or seven games with the Oklahoma City Thunder again winning at home. Seven out of seven for home teams to date in the Conference Finals, but that could come to an end tonight when the Miami Heat will make the adjustments needed to take a 3-1 lead versus the Boston Celtics in the Eastern Finals.

The baseball system produced another winner as the New York Mets again had a shut-out win versus the St Louis Cardinals as the 2.18 underdogs. I also take these teams on the -1.5 and +1.5 markets, and the -1.5 market is currently the most lucrative of the three. I should check with Peter Nordsted to see if he places bets on the handicap markets as well as the Match Odds. 

The second pick of the night was again the Los Angeles Angels of Anaheim, who were playing AL West Division rivals the Texas Rangers. The Rangers pitcher was Yu Darvish, who has a great record so far this season of 7-2, but his ERA is actually higher than that of his opposite number Chris Wilson, whose ERA is 2.57. Add to that the fact that the Angels have won 9 of their last 10 matches, and are playing at home, and the value bet had to be the Angels at 2.06. Baseball betting can be strange at times. Texas did have a four game lead in the division, but their form over the last ten games is 5-5, was nothing too terrifying. The result was a 3-2 win for the Angels.

Date	Selection	Opponent	Price	H	A	R	W/L	RT
29-May	Pirates	Reds	2.14	1	8	L	-1.00	-0.84
29-May	Mets	Phillies	2.08	6	3	W	1.08	0.24
30-May	Pirates	Reds	2.18	2	1	W	1.18	1.42
30-May	Mets	Phillies	2.30	6	10	L	-1.00	0.42
1-Jun	Mets	Cardinals	2.00	8	0	W	1.00	1.42
1-Jun	Angels	Rangers	2.20	4	2	W	1.20	2.62
2-Jun	Mets	Cardinals	2.18	5	0	W	1.18	3.80
2-Jun	Angels	Rangers	2.06	3	2	W	1.06	4.86

As well as working out how to put tables into posts, as you can see above, I also managed to work out how to display my XX Draw Results (from 1/1/11 to 20/5/12) on the "page removed" web page in a readable format saving  the need to download the file, and as an added bonus, also worked out how to password protect a page. It was a very productive afternoon. Next season, in addition to emailing out the selections, I will upload them to a page on the web site as soon as the numbers are entered from the previous matches, and the selections are generated, which should allay any concerns about email going to spam folders, presumably because anything with XX in the subject is considered pornographic. Of course, when I started calling the bonus selections 'Extended', that didn't improve the chances of the e-mail not going to spam folders everywhere!

All very quiet on the football front for me, as I await the line-up in La Liga to be determined on June 17th. I did have an email from Griff who had some questions relating to Elo ratings for football, one concerning how to incorporate promoted teams, and I will be addressing this subject, along with a lot of other good stuff, in a post on the subject of Elo ratings over at Betting Exchange later this month.

Finally, an article that will be of interest to IPL followers was forwarded to me by Scott, and can be found here. On the subject of models, there was a quote by the author in a comment which was:

Like a lot of other things in life, it cannot replace human judgement, but it certainly can help in making better decisions.

No Hitter

Winning Green

One of my two baseball selections last night was the New York Mets to beat the St Louis Cardinals. Slight underdogs at 2.04 in the Match Odds markets, and 3.15 giving 1.5, they did something that they had never previously managed in their 51 year history. After 8,020 games, they finally had a no-hitter, winning by 8-0. Mrs. Cassini's Dad will be happy - he was a minor league player with the Mets franchise in his youth, and coincidentally is from, and now lives in, the city of the only MLB team yet to throw a no-hitter. Three times they have come within one out of success, nut they won't be one of my selections any time soon because they are currently the worst team in baseball. Answers on a postcard please.

The second selection was the Anaheim Angels v Texas Rangers (2.2 MO and 3.15 -1.5) and they come from behind to win 4-2. As I wrote in August 2009, and Peter Nordsted recently highlighted recently:

In sports such as baseball, historical data shows that picking underdogs is the best way to "keep the wind" at your sports investing back. This may result in winning only 40%-45% of your selections, but the long odds means you'll have a positive return.

In basketball, the two Conference Finals are getting a little closer after the home teams won their home matches for 2-0 leads in both series, followed by the home team success in games three. I predicted a long series in the West between the Spurs and Thunder, and if the Thunder can win tomorrow, that will be a winner. Six games was 3.0 and seven was 2.88.

Speaking of basketball, BigAl drew the attention of many via this blog, to an interesting read about NBA gambler Haralabos Voulgaris, who, the article claimed, made his money, at least in part, from his 'predictive models'. To my simple mind, NBA games are not suited to this - the line-ups, and thus the match-ups, change constantly, and there are too many variables. You can model pre-game to a certain extent I agree - but in-play, I had my doubts. Too many unpredictable variables. Players have off nights for one, players get into early foul trouble, injuries happen - none of these can be predicted pre-game, and there was some confirmation of this during the Boston Celtics v Miami Heat game three last night when Haralabos tweeted:

No model, just gut intuition 

and later

all my in game stuff is based on my gut subjective stuff

I felt quite relieved. The key to trading games like basketball, unlike football, which isn't 'real' trading since most price movements are predictable based on the pre-game prices, is the ability to read the game, and for me, it's the ability to rid your mind of what has BEEN happening, and be able to think about what is going TO happen. I've written before about the importance of time-outs in basketball. Coaches call them to stop momentum, and to make adjustments to line-up or strategy. The tendency is to think that the hot team will continue where they left off, but this often isn't the case. Another advantage of time-outs as your entry and exit points, is that the prices are stable.

Winners Mean Business

BigAl did actually make a good point in his last comment, writing:

If I can raise a point. 

You often justify your ideas with "average prices". I hope you can see that this is a dangerous approach. I suppose in simple terms, its only the price of the winners which count when you're analysing the final returns of this type of stuff. The returns of the winners in the data for which you don't have prices could conceivably be low enough to produce a negative ROI even if the average price were to be what you think.

To be fair, your xx draw prices are fairly constant due to the similar type of matches you pick but you have indirectly picked up on the above issue with your comments on the Italian results.

Sensible points and constructive criticism are always welcome here. To give an extreme example to show BigAl's point, six draw selections at 5.0, 5.0, 4.0, 4.0, 3.0 and 3.0 gives a (mean) average of 4.0, but if the two winners were the 3.0 matches, it's clearly a wrong approach. I have the draw prices for 225 matches going back to 1.Jan.2011 and while the price on winning draws is, as might be expected, shorter than the (mean) average price, it's not by much. In fact, two leagues had the average price of winning draws at a longer price than the mean average. 

However, it would be more conservative for me to err on the side of caution when making my projections, and use the median averages. For those interested, and we all should be, the numbers across all leagues for the draw prices are:

In England and Spain, the price of winners is longer than both averages, whereas in France, Germany and Italy expectations are met, and the winners are slightly shorter than the averages. While a healthy 72 of those 225 matches were draws, 72 spread over 5 leagues means that each sample size is still small. These numbers will become more reliable as time goes on. As BigAl also commented, data mining can be an issue if you drill too deep with a small sample.

For example, are 126 selections enough to determine that the Bundesliga selections should be excluded for the Extended selections? For me, yes - because there is a reason why these results are disappointing. But surely this also means that the Bundesliga should be excluded from the Classic selection too? For now they have the benefit of the doubt, but it's more likely that the Bundesliga will be removed from the XX Draws altogether, than that they will be added to the Extended.

The Leagues I follow were chosen because they had the top 5 UEFA rankings, and because they were Football Elite's leagues also. Atill waiting for news of my Clacton trip incidentally. Portugal recently replaced France in that list, and I'm thinking of including the Portuguese Liga from next season, on probation. There are also some leagues in Eastern Europe that I have my eye on - Slovakia has a low average goals per game at 2.29 last season 2.19 before that, with 27% and 30% draws respectively. Unfortunately, I know nothing about Slovakian football, but 23.7% of matches ending 0-0 or 1-1 sets my pulse racing. That's even higher than Ligue 1 (22.9%).    

Anyway, thanks to BigAl for the helpful comment, and the prospectus has been updated to reflect the median and winning prices, and a thank you to George for spotting an error on the Stoke City v Everton game on May 1st which has now been corrected.

Diversification

Thanks, and apologies to Maurice, for it was he who came up with the idea of looking at the Half-Time 0-0. He wrote:

Let's hope it will be another good year with the XX draws. The 0-0 Half-time was my idea. It's not a big leap from unders to 0-0, to 0-0 HT, so maybe others have thought about that too. I also want to test that coming season with low stakes. I will use the classic XX draws and not the extended.

Matt very kindly came back with some numbers for previous seasons, after my last post which showed that the draw had performed very strongly. As I suspected, based on the fact that the edge on the unders wasn't huge, it does appear that this season is a statistical blip for him, although when selections are subjective, it's hard to tell whether the selection criteria from season to season remains the same, or is subject to subconscious biases - "I picked Norwich four times, and they didn't win once" for example, is likely to influence your opinion of Norwich next time they show up on the radar. I'll be watching these selections next season for signs that the draw bias might be continuing, but a strike rate of 34.3% on draws is historically high.

Here's what Matt wrote:

This was something I looked into when I was doing the review, primarily because as you say I noticed there was a fair bit of crossover with the FE bets and your XX bets and they are typically the same "type" of games.

Unfortunately I think it was just a random case of the recommended bets happening to hit a lot of draws this season (34.3%). I wouldn't expect that long term.

The shortlist bets this season only had 28 draws from 117 bets (23.9%)

2010/11 season there were 22 draws from 97 bets (22.6%) for the recommended bets and 39 draws from 152 bets (25.6%) for the shortlist bets.

2009/10 season before that it was 31 draws from 121 bets (25.6%) for the recommended bets and 50 draws from 129 bets for the shortlist (38.7%).

2008/09 season the rec bets and shortlist bets were all together as one and the draw rate was around the 25% mark from memory.

So I dont think there's much mileage in backing the draw blindly although there certainly could be an improvement with manual intervention.

I think it is interesting that we both pretty much target the same kind of games but bet on different outcomes, yet both make a long term profit. Before the start of the season we will have to compare results and have a look at what happens when there is a crossover of FE bets and XX bets. Could be an interesting angle there.

Well, it's before the start of the season now, and I did just that, giving up several hours of my life that I will never get back, a sacrifice for readers and subscribers everywhere. I took a look back over the season just gone to see what those 'crossover' matches were, and how they fared, and the findings are that:

There were 13 matches, 6 were draws and 5 were home wins. We both lost on two of the matches.

Returns from the strategies of backing the draw, Under 2.5 goals, and Home wins in these 13 matches gives the following:

Draw: 8.6 pts. / Under 2.5: 2.04 pts. / Home: 3.83 pts. / Total: 14.47 pts.

Had Borussia Dortmund's two matches not seen very late 'draw-breaking' goals, the results would have been even more interesting, but even so, 6 draws from 13 selections is a very impressive strike rate. Worth monitoring next season perhaps. 

Incidentally, if you subscribe to Football Elite on the basis of what you read here, please use the exclusive Promotion Code "ILOVECASSINI". It won't benefit you in any way whatsoever, but it'll maybe make Matt feel like he needs to pay for my next holiday. Clacton, here I come.  

ROIs are meaningless from such a small sample, but available upon request. Six matches were goalless at half-time, and no less than four matches stayed that way. Backing 0-0 would thus have been profitable too, which leads me to a comment from fairfranco, who wrote:

An excellent set of results.

Just wondering, while your draws coming in may be more satisfying, and was the initial push behind your selections, the under 2.5 goals clearly made a lot more money (LSP) last season.

With the higher strike rate and much lower LLS and overall season profit surely unless the correlation between the 2 changes then the ROBG will be much higher on the Unders than on the draw.

Does this not make backing the Draw pretty redundant?

Not redundant, no. It remains a useful way of taking advantage of an edge. I reserve the right to change my mind on this, but I see spreading the bets across different markets somewhat similar to diversifying your investments. Statistical variance is going to mean that even over an entire season, one bet type will perform better than another. 

Most financial advisers recommend a blend of investments - for shares, a certain percentage large-cap, some in mid-cap, some small-cap, some International, etc. It would be rather silly to put all your money into one stock. If, in an up-year, the stock market climbs by say 10%, the FTSE100 will show a big difference between the performance of companies, even those in the same sector, but by spreading the investment (diversifying) you smooth out the returns, and limit the volatility. Draws at an average price of 3.55 may not seem hugely volatile to some, but we're not all made the same when it comes to risk tolerance.    

For example, my XX Draws were profitable over 156 matches, to the tune of 16.85 points, outdone by the Under 2.5 goals on the same selections, which returned profits of 30.28 points.

But then Football Elite's selections were also profitable over 96 matches, with the return from backing the draw 19.64 points However, these selections outperformed the Under 2.5 profits which were 5.76 points.

Both selection sets were profitable, but the most profitable way to play them varied. In fact, it's highly likely that backing Under 1.5, or Under 3.5, or the Half-Time 0-0, or Full-Time 0-0 or Time Of First Goal might well have been even more profitable for either, or both, selection sets. All the above should live or die together in the long run, but short-term, no. If there is an edge on the Under 2.5 goals market, it is because the market expects more goals than my spreadsheet does. That difference will also reflect an edge in prices across the markets above and some others too.

Rather than put 10 units (for example) on the draw for each selection, I can see some merit in spreading that money across several markets, and diversifying the risk. 

So yes, backing the draw could be considered redundant, but it's profitable, and as seen from Football Elite's results, the Unders isn't necessarily going to be a better return than the draws. Losing runs will be shorter, but the losing run on the Under 3.5 or Under 4.5 goals markets will be even shorter still. 

Last season, I backed the draw and the Under 2.5 with the same stake, and next season will probably keep the stakes the same, but add more bets to at least some of the markets mentioned. The 0-0 really will be a perfect draw next season! 

Just for fits and giggles, I summed the profits from backing the XX and FE selections as draws, and the total was 33.79 points. Backing the Under 2.5 in the same matches, and the total is 36.04 points - pretty close. 

Finally, no post is complete without a comment from BigAl, and he kindly stopped by on his way home from hospital, after having his sides stapled back together. They apparently split from laughing too hard! He had this to say:

It makes me chuckle that someone who has spent a not insignificant amount of time picking holes in the systems / tipping services of others, is marketing his own subscription service using........
ESTIMATED ROI AND ASSUMED PRICES!!

Yes, I can see the funny part there myself, but not wanting to go to Casualty any time soon, I shall try to control my merriment. 

BigAl is quite right. My choice of words is certainly misleading, and could be considered rather amusing I suppose. 

I should, of course, have made it absolutely clear that the 'estimated ROI' and prices would have been more accurately described as 'UNDER-estimated' ROI and that the 'assumed' prices will, in practice, almost certainly exceed those available for the 'Classic' selections. Apologies, and thanks to BigAl for pointing that out. This will be the last time I listen to my lawyers incidentally. 

Seriously, while the Classic selections are at the heart of the service, and are what they are judged on to this point, the inclusion the bonus 'Extended' selections next season, comes at the request of every subscriber (bar one) who responded to my request for input. No one has to use them, but they will be included so that subscribers have that choice. I don't have much supporting data other than their long-term strike rate, as I have made quite clear, but draw prices are robust little devils, and I would be very surprised if the average draw price on 'Extended' draw selections, turns out to be less than that of the 'Classic' selections. The strike rate is the key statistic here, the draw price is 'almost' secondary, simply because it is not going to be significantly lower, unless there's something fishy going on. 

Speaking of which, I may have an explanation for the under-performing results from Serie A - games are being fixed! Not unheard of in Italy of course, but the latest scandal might show that a lot more matches than most of us thought, are not being decided on the pitch.   

As disappointing as those results from Italy are for the 'Classic' selections, the strike rate in Serie A for the 'Extended' selections is the best of all leagues - 64 winners from 189 selections, an implied price of 2.95. 

There's that benefit of diversifying again, this time across leagues, and selection range. 

I've created a simple web site for the XX Draws with results from last season, and the prospectus. 

Cat Skinning

I was reading a self-review of the Football Elite service, and the opening paragraph in a section titled Over / Under 2.5 Goals was this:

I’m not generally a fan of backing things that are an unintended side consequence of something else but as the years go on it’s becoming more and more apparent that there is value in the unders with the sort of games the recommended bets tend to be.

On the face of it, such a correlation may seem surprising to many, but upon further analysis, perhaps not so much. That there is a correlation between my own XX Draws and the Unders markets is to be expected, because, as has been debated ad nauseum, the fewer goals there are, the higher the probability of a draw.

Matt's Recommended Bets are subjective, and typically his modus operandi (a lot of Latin in this post) is to seek underrated home teams playing more illustrious opponents. You can see the type of scenarios that Matt is looking for here. Matt finds teams in the same leagues that I follow, (in fact. my choice of leagues was influenced by Matt), whose strong home records have been under appreciated by the market.

Last season, several teams featured multiple times, e.g. Hannover '96 were selected 11 times, with a record of 7 wins and  4 draws. Hannover alone contributed 8.25 points of the season's profits. Other teams chosen multiple times were Ajaccio (selected 8 times, 3 wins, 4 draws, 1 loss), Atalanta (6, W3, D3) and Evian Thonon Gaillard (6, W4, D1, L1). Those last three added another 6.85 points.

It should be noted that Football Elite's Recommended Bets are not always to win straight up - often the selections is a Draw No Bet, +0.5 or +0.25, and these bets alone showed a profit of 11.63 points on the season.

Overall, Matt's record from 96 match selections was 37 - 34 - 25, for a profit of  7.81 points. Overall, Football Elite's profit on the season was 14.75 points when the ante-post (more Latin for you) bets are added in, but since they are a different type of bet altogether, and I think it confuses the situation to lump these in with the match selections.

Anyway, 7.81 points from 96 selections, an ROI of 8.1%, is decent enough, and indeed, as Matt notes, there is also an upside to backing the Unders in these games. This would have generated another 5.76 points of profit, not insignificant.

It's interesting that a strategy of simply backing Hannover '96 those eleven times, and doing nothing else, would have generated more profit, and an ROI of 75%! But hindsight is wonderful.

What I find most interesting perhaps, is that the character of matches that Matt ends up selecting, and the matches the XX Draw spreadsheet selects, are quite similar. In broad terms, the spreadsheet identifies matches where a combination of recent form and long-term rating, when adjusted for home advantage, predicts a match likely to be low scoring. Matt's selection process identifies matches where the home team appears to be value to beat the away team, and because Matt seldom looks at odds-on selections, the matches he ends up with are games with no clear favourite, and thus the draw is on the shorter side than average. Running the numbers, the average draw price on FE's selections last season was 3.43. This may seem a little short, but the really interesting thing is that if the draw had been backed in those 96 selections, rather than the home team, the profits would have been 19.64 points on the season.

That's 19.64 points on the draw versus 7.81 points on the home team, an increase in ROI to 20.5 %. And these numbers are from using the data at football-data.co.uk. It wouldn't be unreasonable to expect that with bets in early on the exchanges, those prices could often be beaten.

The FE selections were under 2.5 goals 58% of the time, and the average goals per game was 2.42. The fact that the edge on the unders was fairly modest means that the observations above could be a blip, but it would be interesting to hear from Matt how his match selections would have fared in previous seasons if backed as draws.

Most football services that I am aware of, admittedly not many, seem to go for selections in the 2.0 to 3.0 range, thus avoiding both odds-on selections and the draw. Understandably most services, or more likely their clients, want a steady flow of winners, at better than evens (if only slightly) but I think this is a mistake. If the numbers from previous seasons are even close to 2011-12, Matt, and his clients, would be far better served by targeting the draw, albeit with its inevitable longer losing sequences. The evidence so far shows that this is where the value is.

None of the above observations are in any meant to be a criticism of Football Elite, who have been out there for a while with many happy customers. In the same way that I didn't immediately connect the dots and realise the potential of Unders betting along with the draw for my XX selections, I'm simply pointing out that there may be other, more profitable, ways to play selections, if the risk tolerance of clients is high enough of course.

I have seen a few comments about the correlation between Under / Over prices, and the TOFG (Time of First Goal) markets, and someone (I forget who, sorry) recently left a comment suggesting that the Half-Time 0-0 market might be another opportunity. It certainly should be, and is something I'll be tracking next season. For the record, in 2011-12, of the 156 XX Draw selections, 60 were 0-0 at half-time (38.5%, IP 2.6) and the average TOFG (when there was one) was 33.66 minutes. Unfortunately, I do not know what the HT 0-0 prices were, nor what the average TOFG is, but I would hope that both offer some value.

XX Draws

As promised, here is a full review of the XX Draws from the 2011-12 season, as well as plans for the 2012-13 season.

In summary, the XX Draws finished the 2011-12 season with a record of:

When backing the Under 2.5 goal option in these matches, the record was:

Towards the end of 2011-12, I started to include additional selections – those which fell just outside of the ‘Classic’ XX Draw parameters, but selections whose results were nevertheless profitable. These became known as the 'Extended' selections, and over the 53 selections where prices were tracked, these generated an additional 2.65 points and 7.2 points on the Draw and Unders respectively. 

A total of 57.98 points in total for the ‘XX family’, from 209 matches for a combined ROI of 13.6%.

The inclusion of the Extended draws has been well received by subscribers. While the ROI may be a little lower than for the Classic selections, “ROI is for show, ROBG is for dough” – ROBG being Rate Of bank Growth, and nothing grows a bank more than plenty of value priced winners, and over three season, the Extended selections outnumber the Classic selections by 709 to 361.

Below are the results of the Extended selections over three seasons. Note that the estimated profit is based on the assumption that the average draw price for the ‘Extended’ selections is the same as that for the ‘Classic’ selections. Logically, since these matches ‘should’ be considered less likely to result in draws, the estimates may be on the low side. 

2012-13 should see around 156 Classic selections again, and perhaps 230 or so Extended selections. With the Under 2.5 goals option, that's close to 1,000 investments, all for a very reasonable, and competitive, £99 if you act fast, and includes a rare, and perhaps unique, refund policy if the results are not profitable, or you wish to cancel for any reason. Last season, one subscriber dropped out in mid-season, and I am fine with that. When you are backing draws, the Longest Losing Sequences (LLS) can get uncomfortable, although the LLS on the Under 2.5 goals is an amazingly low 4. 

Anyway, full details are in the 'prospectus' available at http://www.docstoc.com/docs/121590717/XX-Draw-Selections-Prospectus-2013 or I can e-mail to you upon request. I can also provide a full list of the results from 2011-12 upon request.

Trading Without Losers

There's an old Wall Street saying which is that:

"If you can get your hands on a hot new stock, you probably don't want it."

I'm probably not the only trader out there who sees what looks like a value opportunity, hits the 'Enter' button, and then goes through a number of emotions as the countdown ticks inexorably down to zero before revealing your fate - matched or unmatched. While looking at the Promotion market during Saturday's Huddersfield Town v Sheffield United game, shortly after half-time, I saw a decent amount, £2k + I believe, available to lay on Sheffield United. Having backed Sheffield United at 1.93 before kick-off, I could not understand how, after 45 minutes of football, and no goal, their probability for promotion had increased so much - from 52% to 57%. With no decent chances for either side in the first half, it was hard to see any logic behind this. Unfortunately, my fastest fingers were out of shape, and the money was snapped up by someone else, but in a contest that is essentially a coin toss, when you see a skewed price like this, it's value.To my mind, the price at this stage should have been 2.0, or at least close to it.

Back to the opening quote though, and there is always the concern that if something looks too good to be true, it probably is. Sometimes, but not always. The trick is knowing when the money sitting there all on its lonesome belongs to an idiot or a savant I guess! Or should I say, an outsider or an insider?

A Slate.com post by Harlan J Protass last Friday included this:

Trading on inside information, though, is fundamentally different than other types of financial fraud. It doesn’t cause other investors to feel a pinch in their pockets. It doesn’t trigger layoffs. It doesn’t bankrupt companies or shutter factories. And it doesn’t wipe out pension plans or 401(k)s. James Altucher, a Huffington Post financial columnist, has made the case that insider trading actually should be legal for the sake of transparency: If investors can see that corporate insiders are buying and selling stock, the market will more accurately reflect a company’s true condition and value.

"It doesn't cause other investors to feel a pinch in their pockets"? Mr. Protass is a lawyer, but even so, he should be aware that in trading, there is a loser for every winner. It's a zero sum activity.

I can certainly see the logic in the argument that insider trading should be legal, given that in practice it is naïve to think that the small possibility of prosecution is going to stop people from making serious sums of money. It's similar to the thinking that, by making drugs illegal, people are going to stop (ab)using them. It doesn't work that way!

Anyway, I've railed on before about how short-term stock market outsiders are just gambling in the financial markets - if someone is selling me shares at £10, why would I want to buy them? I might be able to buy them and sell them on to a greater fool later, but I am almost certainly over paying, and when there is no greater fool to sell them onto, I am going to take a hit.

More evidence that liquid sports markets offer outsiders a better deal than the financial markets. The single, most important, requirement for trading profitably is information. If someone has better information than you, you're gambling without an edge, and in the long-term will lose. Very likely when trading stocks, currencies or options. If you have the same information as others, it becomes a question of who can make the best use of it. What weight do you put on certain factors? How much of an edge does a move give you - i.e. how much do you risk? Or you could be the Wembley half-time tea boy, and know something no one else knows - like what you just slipped into the Huddersfield Town players tea-cups.

Now just where did that £2k wanting to back Sheffield United at 1.75 come from? If it was the tea-boy's account, he needs to up the dosage.

A wealthy Blades fan overconfident in his team's chances? A wealthy Terriers fan looking to hedge the heartbreak, should his team lose? Someone looking to hedge a bet, but then why not do that pre-game?

I shall probably never know, but according to Mr. Protass, whoever it was "didn't feel a pinch in their pockets."

Play-Off Time

My latest piece, on the upcoming Western Conference NBA Finals between the San Antonio Spurs and the Oklahoma City Thunder is now published over at Betting Expert.

When the Eastern Conference finalists are determined, I plan to add another post on that series also, and of course, for the NBA Finals themselves.

I am also working on a post about the very interesting study that Peter Nordsted sent me via a comment the other day. The paper is titled Why Are Gambling Markets Organised So Differently From Financial Markets? and while most of the data is drawn from the United States and the NFL in particular, and the findings are more pertinent to the US Sports Books rather than to UK bookmakers or exchanges, it is an interesting read as you might expect with its author being the controversial Steven D Levitt. My post on this topic will also likely be posted over at Betting Expert in the next few days, so stay tuned.

When I find time, I shall also be updating my numbers and plans for the XX Draws next season. I have had a request to accept payment via Moneybookers and will take a look at this.

I had one other comment which was this:

Hope you are well. Unrelated comment here but I seem to remember a blog post you did a while back saying that you had a few football trading manuals from some scammers that you were wiling to send on to anyone who wanted them. It may well be a long time ago you said that or it may well be a dream I had last night but if it's the former, could you be so kind as to send them to me.

Unfortunately, or really not that unfortunately (as they are all rubbish), I lost these 'manuals' some time ago with a disk failure, so I no longer have them available. It would certainly be a dream were any of these systems to have had any value, but they don't. Save your money. Typically 50% of the pages are taken up with explaining how Betfair works, accompanied by screen-shots of various quality, followed by a statistically unsupported claim that after x number of minutes, it becomes value to make bet y. There may be a couple of images showing a match or two where this worked, but the truth is that any supposed glaring inefficiency such as these across football markets would be recognised almost immediately, and would cease to exist.

Two very evenly matched teams in action at Wembley as I write this post. A small bet on Sheffield United based on their form, both season long and recent, and a small bet on the Under 2.5 goals. Sheffield United did lose 0-3 at Huddersfield Town back in September, but eight months is a long time in football. On the other side, Huddersfield have the benefit of experience, having lost this fixture last season to Peterborough United who scored three times after the 78'. 

Crowded Out

Alpha Dog

With uncanny and spooky timing, no sooner had I mentioned Peter Nordsted and his success with backing baseball 'dogs, than he starts blogging with an opening post on the very same subject, complete with a mention of the amazing blog that changed his life - or at least the way he "approaches betting, especially on the US sports".

The amazing blog can be found here, and Peter's Trade On Sports blog has been added to the blog roll. Peter highlighted the following quote from this post of mine from 2009 (in case you are wondering, the joke at the time was about Adam Heathcote's 'Exchange Secrets' tipping service - whatever happened to that?):

In sports such as baseball, historical data shows that picking underdogs is the best way to "keep the wind" at your sports investing back. This may result in winning only 40%-45% of your selections, but the long odds means you'll have a positive return.

Underdog

Picking underdogs, or laying favourites. Long-time readers will be familiar with the Bundeslayga system, (laying odds-on selections in the Bundesliga), and will have been rewarded to the tune of 17.88 points from 177 selections. Laying the Away shorties (the Bundeslayawayga selections) performed very well, with just 35 selections but returning 9.73 points profit with a longest losing sequence of just four and a 45.7% strike rate. 

As I have written before, there are a number of reasons why people like to back favourites, and why a contrarian approach can reap rewards - why do people follow the crowd? From the world of stocks:

Comfort - It is comforting to see other people doing the same thing we’re doing. When you’re lost and trying to find your way, it is comforting to see other people in the same location even though they are lost too. At least you’re all lost together.

Fear - It is scary to be alone. It’s hard to believe that everyone else, except us, could be wrong. Maybe we’re the one that is wrong. We caution pioneers – “they are the one’s with arrows in their backs.”

Risk Aversion - When you go against the crowd, you accept full responsibility for the results. It used to be said that nobody was ever fired for selecting IBM. When you invest with the crowd or invest in an index fund it is a safe way to avoid criticism.

BigAl posted a comment on my post about useful and interesting data, writing:

I think you're probably underestimating the skills of the very best sports gamblers / modelers.

This sort of data would be invaluable to them. Obviously not all of it, but they'd love the chance to find out.

In terms of in-running, you're right, probably not that useful in the current markets. But mainly for liquidity reasons.

I doubt that even the very best of sports gamblers / modelers can make use of the statistics I was referring to, such as the distance a player runs during a game or his top speed, but I am well aware that other data is very useful. I think that most data that is of use to gamblers is readily available, or in the case of PPP (Points Per Possession), easily calculable - it is the data that is of most use to coaches that is proprietary.

As for liquidity, basketball liquidity in most NBA games is fine, especially at this time of the season, but baseball and ice-hockey (even with the Stanley Cup play-offs in full flow) are very poor. BigAl added:

A guy called Haralabos Voulgaris is an interesting character in the NBA betting world.

http://articles.businessinsider.com/2011-04-28/sports/30044313_1_gambling-bug-haralobos-voulgaris-basketball-expertise

and this was a link to a great read - thank you. Here's just one quote from Mr. V, something of a gem in my opinion - read and learn:

“In life, I find that people have a really tough time being honest with themselves, and saying ‘boy was I ever wrong about that.’ But when you are losing money, reality tends to set in. I have had a lot of really well-thought-out theories or methods that simply weren’t profitable, and it is my opinion that those theories were just flat-out wrong.”

Rating Statistics

Heat Big Three, Celtics Big Three

Scott sent me a link to a good piece on ESPN about the technology that some NBA teams are using to track their players. Well worth a read if you are interested in this topic, but for me, it does beg the question of how useful this information, and indeed other similar data from 'fluid' sports, really is from a gambling perspective.


Baseball, and its sabermetrics, is atypical of most sports, in that it is a game made up of set plays, all of which start with a pitch, and with a limited number of starting and ending positions. Thus over the many years that statistics have been tracked, the historical probability of team A winning from a position of being x runs ahead after y innings with runners on first and second with one out (for example) is known. More importantly, because the game is made of of set plays, there is enough time between plays to actually use the data for betting. Unfortunately, in-play baseball liquidity in most games is rather poor, but in theory you can gain an edge.

Spurs Big Three

In basketball, not so much. Yes, the game stops often enough for time-outs, or free-throws, but when a game is in full flow, I challenge anyone to be able to make use of rebounding statistics, distance a player has run during a game, top speed etc. Valuable information for the coaching staff I'm sure, but outside of being able to use free-throw statistics (it makes a big difference which player is on the line, and late in a game, can make a big difference to the probability of a team winning) the data is of academic interest only to punters. Jamal Crawford hits 92.7% of free-throws, Dwight Howard hits less than 50%. Three point shooting is another useful statistic - I've mentioned the Golden State Warriors and their ability to hit three pointers, and last season they had 3 players in the top 20 in this category (plus a fourth who is now at the San Antonio Spurs). In fact, the Spurs are even better, with five of the top 20 players in the league. The Charlotte Bobcats best three-point shooter, I hear you ask? D J Augustin - 34.1% and 94th place.

For football, there are some great blogs out there that analyse all kinds of aspects of the game - headed goals, woodwork strikes, etc. including, rather perfectly timed, this piece from the excellent soccermetrics.com - which mentions:

I'm not writing this post to demonstrate how awesome my little algorithm is, but rather to demonstrate that predicting league performance, whether by on-field event data or off-field financial data, is very difficult and captures very little of the variance present in actual league performances.

As a gambler, it's important to be able to separate the useful data from the interesting data. Is team data more important than individual data? For a sport such as basketball, clearly the individual player data is of greater importance than in an eleven player sport such as football. The loss of LeBron James for example will impact the odds on a Miami Heat win far more than the loss of even a missing Messi would be for Barcelona. Most top NBA teams have a so-called 'big three', and the loss of one or more of these can turn a 1.5 shot into a 3.0 shot, as we have seen this season with the San Antonio Spurs. One reason why rating NBA teams purely on team statistics is fraught with problems. As for baseball - the same teams play against each other on two, three or four consecutive days, and the prices fluctuate wildly, all because of one key player - the pitcher. To be meaningful, team ratings need to allow for the stats for this one individual. Unfortunately, starting pitchers rarely pitch the whole game, so how much does the starter's numbers count for? Perhaps not so much as you might think, and perhaps a reason why opposing short priced favourites in baseball is a better option than trying to buy money. 

Peter Nordsted has certainly had some success with this strategy this season, and I believe last season too (at least until the late part of the season when favourites, often 'needing' to win, seem to do just that a little more regularly), and he also offers one good reason for betting based on ratings, even if he does end his sentence with a preposition:

That's the beauty of following a value ratings based system. It takes all of the emotion out of making the decision of what to bet on.

I remember clearly my Mother overhearing me tell someone to "Fuck off" when I was a young boy. She was furious. "Don't you ever let me catch you using that expression again", she shouted. "Using language like that is not appropriate. 'Off, is the direction in which I would like you to fuck' is much better English" - a lesson I have not forgotten.

Champagne

No luck for the XX Draws today in their final fling for the 2011-12 season, with three Classic selections all ending up as one-goal margins, as did the one Extended selection. The last round of fixtures is always dangerous, with teams looking to win titles, or places in Europe or avoid relegation, but with an objective selection system, they all have to be recorded. Two selections included the top two teams. Montpellier needed just a point at already relegated Auxerre for example, and won 2-1 for their first ever French Championship. Paris St Germain needed to win at Lorient to have any chance, and did just that, copying Montpellier in going a goal down before coming back to win.

Caen and Dijon join Auxerre in Ligue 2 next season, Bastia, Stade de Reims and Espérance Sportive Troyes Aube Champagne (I may refer to them simply as Troyes from now on) replace them. Reims and Troyes are both from the Champagne-Ardenne region of France, and Ajaccio's narrow escape means two teams from Corsica in Ligue 1 next season.

And with the end of Ligue 1 action, the season ends for me, and the final Tipster Table standings are:

It should be noted that the results for Football Elite are for their Recommended Bet (matches) selections only, and does not include their season long bets on League Winners, Relegation or Top Goalscorer, as these are of a completely different nature to the Match Odds bets.  Matt's official results when including these are:

Bets 100, Winners 42, Draws 33, Losers 25, Staked 99.00pts, Profit/loss + 14.75 pts, ROI 14.8%, ROC 59.0%.

The XX Classic selections backed as Unders finished well clear in the end, with no losing streak longer than four. Much less volatile than backing the Draw, with its losing sequence of 16 not for everyone. The XX Extended selections also fared well on the Unders, but prices were only kept from mid-April so no conclusions are to be jumped to here, and the longest losing streak of three is from a limited sample. I'll be updating all the stats on these in the next few days, including taking a look at the HT 0-0 results.

The consensus from subscribers is that I should include the more numerous Extended selections. This will likely slightly reduce the ROI, but it is the ROBG (Rate Of Bank Growth) that is important, and the importance of the ROI can be exaggerated.

Backing the 'Lay The Draw' selection was a profitable strategy, and Geoff's Draws fared very well over 137 selections.

If anyone is interested in pitting their wits against me and others next season, let me know. Tracking these picks isn't too onerous, and it gives me something to post on each week.

No champagne for me last night, but a bit of a headache today following Chelsea's heroics in Munich, and a few too many beers. Unfortunate outcome for Tottenham Hotspur, and the lack of Champions League football there next season may well be a serious blow to the club's future. I'm not sure UEFA envisioned a situation where the champions of Europe would finish outside the top four in their domestic league, but this is now the third time it has happened. Twice in England (where Everton were controversially granted a reprieve and allowed to enter) and once in Spain, when Real Zaragoza finished fourth and missed out. I have a feeling that RdiM may well miss out on the manager position, as Chelsea will be looking for a proven manager to ensure that they stay in the top four in England. Too much money at stake, and while di Matteo has had Chelsea performing superbly in Cups, I'm not sure that will be enough to convince the owner that he is the man for Chelsea to move forward with. We shall see. 

As expected, the mention of this blog over at Ian Erskine's blog yesterday resulted in a surge of hits, and the 400,000th hit will come some time tomorrow (Monday). It seems like only yesterday when I was paying out on the 333,333 hits competition! Perhaps a half-million competition is in order? 

Decent Guys

Ian and Cassini

I was pleased to read today that Ian Erskine drops in on this blog from time to time, and has taken no offence at my wilful (and some might say provocative) abuse of his Lay The Draw selections. As I mentioned in my comment over there, one key thing is obviously your selection of the matches most likely to meet your requirements (high scoring if you are laying the draw, low scoring if backing the draw), but additionally your discipline to stick with a method fully for a decent period of time. 0-0 draws do come along when least expected, and the XX Draws have had seven goals on a couple of occasions (twice in three matches as it happens). 

Understanding that these things will happen is part of the game, and you lack the emotional strength to deal with it, you're in the wrong game. One of Ian's qualities is his focus on educating people into understanding the true nature of long term success at betting. It is not a question of signing up to a service, trading every selection profitably, and watching the cash roll in. It is a matter of making good selections, making consistent decisions in regard to those selections, tweaking those selections if necessary (being careful not to throw the baby out with the bath water of course), staying disciplined in times of adversity, always learning, and more money will come in than go out over time.

Ian wrote:

One final mention of a blog worth visiting occasionally as he nicely gave me a mention this week http://green-all-over.blogspot.co.uk/. I dont know Cassini but he has referred to me a few times both positively and negatively. He is a winner I believe and I think it is more on US sports etc that he makes his cash but I read his blog most days and it is entertaining reading and knowledgeable even if we do not always see eye to eye, I think he is decent genuine guy, (like myself)

As I Tweeted a few minutes before the play-off game today, I have 'fun' bets on goals and West Ham United today. The HT 0-0 Lay just came home with a 35' minute opening goal, but the Over 2.5 goals bet may be at risk of going down. The two previous finals with opening goals around this time ended Under, as Hull beat Bristol City 1-0 with a 38' goal in 2008, and Watford beat Bolton Wanderers 2-0 in 1999 with another 38' goal. But in 1993, the first goal didn't come until 43' and ended 4-3 as Swindon Town beat Leicester City. No team has ever come back from a Half-Time deficit to win in 90 minutes, and the last time a HT leading team failed to win promotion was an occasion I remember only too well - 1996 when Crystal Palace ended up losing to Leicester City after extra time.

The £90million Match

IMV, it's rare for someone who can make money betting not being able to make considerably more money doing something else. The exception will be people who temperament means they are bad at suffering fools or working for others.

So wrote a long-time (10+ years) member of the Betfair forum recently. I have to agree, at least with the first sentence. The second sentence has some merit too. The skill set required to be successful at sports betting are in high demand in business, and as much money there may seem to be in the sports markets, for most of us, there's a lot more to be made in more traditional trades. Askari's second sentence suggested that the rare exception of a person who can make more from sports betting than he can elsewhere, is the type of person who does well working in isolation. The IT world used to be full of such characters, less so nowadays, but it still has more than its fair share perhaps, and it's interesting to me that a number of successful sports traders seem to be from this background.

Golden Ball

Play-offs have been with us for 26 years now, hard to believe, and today's game is the 23rd 'final' where the prize is promotion to the top division, and the riches that accompany it. There is no single sporting event in the world more valuable to the winners - an estimated £90million. That's quite a lot!

West Ham United lost in 2004, and won the following year, while Blackpool defeated Cardiff City in their one appearance in 2010.

Five of the 22 matches have been scoreless at Half-Time,  (implied price 4.4), and four have gone to extra time, with two being decided on penalties. 62 goals in those 22 matches, (excluding extra-time), and 11-11 for the over / under 2.5 goal market. The game tends to be feast or famine, one finished 0-0, and eight finished 1-0 while five have seen five or more goals - including the last two seasons.

West Ham certainly had the better of Blackpool during the season, winning 4-0 at home and 4-1 away, and the odds of 1.98 on West Ham to win in 90 minutes look generous. 1.56 on promotion for West Ham if you fancy they'll need more time.

Blackpool reportedly failed to sell their ticket allocation, so maybe their fans aren't too hopeful of a repeat win.