Only Mistakes

We all make them; in fact, and I hope you are sitting down for this, even the author of your favourite blog has been known to make the very occasional one, evidence, if any is needed, that no one is perfect.

I'm not sure I have mentioned her before, but articles from the Financial Times’ Lucy Kellaway are usually worth reading. Not only does she write content worth reading, but she does so in an entertaining style and with a dry sense of humour – rather like myself, I hear you say.

Lucy Kellaway (@LucyKellaway) first came to my attention when she was the commencement speaker at my son’s graduation (University of Essex) a few years ago, and she has a habit of cutting through the BS and talking common sense.

The article below about mistakes was triggered by the comment by UBS Chief Executive Sergio Ermotti to his employees that "henceforth it was OK for them to make mistakes". I meant to post this a few months ago, but I made a mistake and filed it in the wrong place. But that’s OK; I've learned from it and here is the article now, none the less relevant than the day it was written:

UBS head should make clear that all can take risks but none may make light of mistakes

Last week the chief executive of UBS told all the bankers who work for him that henceforth it was OK for them to make mistakes. A culture in which everyone was petrified of taking risks, Sergio Ermotti said, was not in the interests of the bank or its clients.

How mature, came the response. How refreshing to hear a bank chief acknowledge that risks need to be taken and honest mistakes will sometimes be made.

But it wasn’t mature. It was mad.

In a limited sort of way what he said made sense. The main point about risks is that they are risky — and risky things have a way of going wrong. Places where people get a bollocking for making the slightest slip tend not to be where the best decisions are made.

Yet the answer is not to tell bankers that it is fine to screw up. Mistakes are never OK. And they are particularly un-OK in banking. If I were a UBS client, I would be exceedingly displeased to learn that the bankers to whom I was handing over a king’s ransom were being taught that errors were perfectly acceptable.

This mistake-loving nonsense is an export from Silicon Valley, where “fail fast and fail often” is what passes for wisdom. Errors have been elevated to such a level that to get something wrong is spoken of as more admirable than getting it right.

One company that dares to be different is Amazon. Among its values is the seditiously sensible notion that its leaders “are right, a lot”. Far from stifling innovation, this seems to have done the reverse. On the 2015 Forbes list of the world’s most innovative companies, Amazon is number eight. Facebook and Google, which have long talked about the marvellousness of failing, are not on it at all.

The glorification of failure is based on a couple of psychological misapprehensions. The first is the idea that we learn from our mistakes, when there is no evidence of anything of the kind. I certainly don’t learn from mine. I keep buying uncomfortable shoes, each time thinking I will wear them in. But they go on being uncomfortable, and I go out and buy more that pinch just as badly.

The world is full of people who go on making the same mistake. Men marry the same sort of unsuitable woman. Most of the journalists I’ve ever worked with display extraordinary loyalty to their particular brand of mistake — they are endlessly inaccurate, or endlessly prone to cliché.

A study a few years ago by neuroscientists at MIT showed that monkeys learn much more from getting things right than getting things wrong. When rewarded for making a correct choice they remembered it and could repeat it, but after a wrong choice they remembered nothing.

The second fallacy — which UBS has fallen for — says that fear of making mistakes paralyses us, so we must make them seem less scary.

The experience of Henry Marsh, one of Britain’s best neurosurgeons, shows this is nonsense.

He has to take mistakes seriously as when he screws up people die. Far from consoling himself with the thought that honest mistakes are fine, he has written a book, "Do No Harm", cataloguing all his errors in goriest detail and making each one appear as un-fine as possible.

Yet even with mistakes cast as catastrophes, Mr. Marsh has not been paralysed. He admits to feeling dread before every operation, but once he gets started he feels a “fierce and happy concentration”. Nor is there any sign that his proper dread has stopped him taking risks.

Instead he has pioneered a brilliant and daring system, in which patients are kept awake while he rummages around in their brains.

He catalogues his failures not in a Pollyanna-ish attempt to show how much he learnt, but simply as a fact of life — and death. It is as if the mistakes have become part of him, and have made him the person he is.

Equally the mistakes we’ve made make us the employees we are.

I haven’t killed anyone through my work, but I have harmed them. I often write about people anonymously in my columns, but sometimes they recognise themselves and they feel rightly hurt.

Each time I have failed to disguise them well enough, or have misjudged their reactions.

Yet far from learning, I go on doing it. I never think: honest mistakes are OK. Instead I remember all the people I have wronged and wear them as a guilty badge. It might not make me a better journalist, but it makes me more clear sighted about what I do for a living.

What Mr. Ermotti should have made clear was that sometimes his employees must take risks, and sometimes things will go wrong. When that happens, no one must ever make light of their cock-ups. Instead they should carry the memory of all their mistakes as part of their own internal score sheet of how they have fared as a banker.

From a trading or betting viewpoint, a loss doesn't necessarily mean a mistake was made of course, but anyone who has been seriously active in betting for any length of time will have made a mistake. The important thing is to have a short memory for them while learning from them and not repeating that error again. Unfortunately, there seems to be no end of ways in which mistakes can be made, but if we can eliminate the most common or likely ones, that's pretty good. My work requires me to drill down and determine the "root cause" of problems - it's a handy exercise in my betting life too.

James had this to say on the satirical opening to my recent post looking at P and L blogs:

Well, Green All Over is certainly the most ground breaking of websites.

I've never known anyone alter their P/L to make themselves look worse than they really are.

However, you yourself have mentioned Benford's Law so I can discount your first paragraph as jovial folly.

The actual perpetrator is probably none the wiser.

Finally, I must thank you for pointing out that CPFC does try to include the more wholesome aspects of continental ultra support even though they have yet to pass GCSE Geography.

If you want to come in with me on an investment plan I have to start Surrey's first ASSOCIATION foote-ball club since 1965 then I would be more than happy to have you. I was thinking of two locations...

1) Woking Whisperers (on presumption that the support will be typically English) or
2) Guildford Bombers, errr maybe not.

Green All Over, with its 1.2 million plus hits and more than eight year history, has certainly been ground-breaking, a term that always reminds me of the joke about the shovel being one of mankind's most important inventions.

If only those made up numbers were actually worse than the truth! I have indeed mentioned Benford several times, the most recent being a look back taken in January of this year. Overall the numbers were close to expectation, with the exception of 7 which was, and still is, letting the side down a little.

Surrey does have several Football Association Clubs - it's just that none of them are in the Football League. It's about time Woking woke up. They were the visiting team when the record attendance for a Conference game was set (excluding play-offs) at Oxford United (11,065 on Boxing Day 2006) - not a lot of people know that.

James mentions Guildford, but they do already have a club with a name worthy of the top levels of the game - Guildford City. Unfortunately, it appears the name is far grander than their current circumstances of the club merit:

The record attendance was set on 8 September 2012 when the visit of Kingstonian in the FA Cup First Qualifying Round drew a crowd of 295 spectators

295! I'm expecting more than that at my funeral!

"Bombers" is unlikely to become a nickname, either official or unofficial, any time soon, but a little Surrey trivia for you all is that a "carbon-copy" of the Guildford bombings actually took place in Caterham in August 1975, when the Caterham Arms was the target. I remember the incident well, as I would cycle close by the pub on my way to (and from) work in those days.

The nearby Barracks (hence the reason the pub was selected as a target) closed in 1995, but the Caterham Arms is still thriving after a spell when it was known as the "Village Inn". My brother-in-law still goes there occasionally, thriving after a spell when he was known as the "Village Idiot". I should apologise for that joke as he became a granddad yesterday, at the same moment I became a great-uncle.

Enough of this frivolity. James can be a good and a bad influence on me.

Robbo the trader was concerned:

Phew, James is alive and well, I posted a comment to his blog about the pnl's and it never appeared. To be honest I was getting a bit worried all that back patting had done him some harm.

I think James is just fine, possibly busy working on his next book, and enjoying the Test Match at Lords. Not being a football man, he's probably not too excited about the start of Euro 2016 tonight.

One article I read on the Crystal Palace FC stated that:

 "with four players called up to the tournament, there are only 32 clubs that have provided more players to Euro 2016 than Palace". 

I love the use of "only" in that sentence.

Cubs, Hotties And F-L Bias

Since MLB went to a 162 game regular season in 1962*, only two teams have won more than 70% of their games.  The New York Yankees in 1998 won 114 games (70.4%) and the Seattle Mariners won 116 (71.6%) in 2001.

Pre-season favourites for the 2016 World Series were the Chicago Cubs, and they remain so (4.8 on Betfair) with a rather impressive winning percentage to date of 72.2% (39-15).

However, it's worth mentioning that the last time a National League team had the best regular season record and went on to win the World Series was in 1986 (New York Mets). Since then, only five teams with the best regular season record (all American League) have gone on to win the World Series The Chicago Cubs of course, play in the National League.

While backing the Cubs for the World Series may not offer any value, backing the Cubs so far this season is a profitable activity, +12.96 points from 54 games Straight Up, and +17.70 points on the Run Line. 

As I have written on this blog before, backing MLB shorties has become a winning strategy in recent years, with big profits in 2012, 2014 and 2015, and it's so far so good this season as the table below shows: 

Away (road)  teams have an impressive 8-1 record straight up this season, and this is no surprise as since the 2012 season, their record is 58-10 (85.3%) and +36.45 points. 

As I wrote last season, the conclusion that the favourite–longshot bias is found in reverse in baseball doesn't seem to be the case any longer. Don't tell anyone.

* In 1961, American League clubs played 162 games, while the National League played just 154 games.   

Heartbeat

Although this blog tries to stay away from being about profit and loss, it does occur to me that as a self-declared zen master of sports, trading football, horse racing, cricket, tennis, shinty and shove ha'penny, whilst Forex trading and juggling chainsaws all at the same time I might add, my numbers for June so far might be of interest.

On Tuesday 1st June, I made £3,698.87 backing Manchester United to win the Cup Final in 90 minutes

On Thursday 3rd June, I made £4,875.43 on the NBL finals - Golden State Lakers v Cleveland Browns

On Friday 4th June, I made £5,368.73 on the Royal Ascot Derby. A total profit of £18,730.12 so far as you can clearly see. I'll be selling my secrets soon but until then, keep checking back for more in-depth quality analysis from the Great Cassini.

Nice to get that out of the way, before looking at James' latest comment. About my last post, Mr Picky had this to say:

Call me Mr Picky but shouldn't that CPFC sign, which reads, "Heartbeat of South London since 1905" read "Heartbeat of the County of Surrey 1905-1965, whereupon it was absorbed into Greater London."?

And I thought I was pedantic! James is quite right - in 1965 the County Borough of Croydon was abolished and much to my mother's chagrin, was combined with the Coulsdon and Purley Urban District to form the London Borough of Croydon. She is still in denial over the decision, referring to her home as Purley, SURREY at every opportunity. It was initially proposed that Caterham be included in London, but that plan was dropped, although anyone who knows the area would probably struggle to justify why Purley and Coulsdon are London towns, but Caterham and Warlingham aren't.    

I hope that the people responsible for that banner are reading this and feel thoroughly ashamed of themselves! For those who like trivia, Surrey hasn't had a Football League club since London expanded.

James' latest post is worth a read too - it's a short one:

I'm reading one of those profit and loss blogs at the moment. You know the type, "Look at me. Ego the size of a planet. I'm going to master sports trading football, horse racing, cricket, tennis, shinty and shove ha'penny, whilst forex trading and juggling chainsaws all at the same time."

Fine. Good for you. But please try and be consistent in your "journal". If on the first day of the month you posted a loss then your monthly tally cannot and can never be positive.

Figures that don't add up are an obvious hint to readers that you are not telling the truth. Maybe you made a mistake but if you cannot add up then you're in the wrong game. Dropping a strategy from your portfolio when it begins to go south so that you can quietly remove its losses from your monthly figures just makes you look like a clown.

No wonder the majority of these bloggers don't post their real names.

I'd love to know which blog he's... hey, wait a minute!

Play On Play-Offs

James, aka the Blogging Prodder, had a few thoughts on the end to the football season in England. He writes:

I'm not a fan of the game so I suppose I have no right to talk about it. However, I find it odd that a team that comes third in a division gets promotion and a slap on the back whereas the team coming 7th gets a trip to Wembley and a trophy. Of course, it's all about money and the FA must have an awfully large debt to pay after building their new stadium.

Winning the league, or clinching promotion via an automatic place, is often an anti-climax. The likely outcome may well have been known for weeks or months, and the excitement just isn't there. Compare Leicester City's title this season with that of Manchester City's title win of 2012. Not only were Leicester City not on the field when they won it, but they still had two matches to go. They had led the table from January 16th, so the drama would have been had they not won the title. Manchester City's title came in slightly different circumstances of course, and with the twist of depriving their city rivals of the title they thought was theirs (sorry Baz). There should be a formula for this, something along the lines of EXCITEMENT LEVEL = DESIRED OUTCOME / TIME ELAPSED SINCE DESIRED OUTCOME BECAME ODDS-ON.

James mentions 7th place and a trip to Wembley, so he is referring to AFC Wimbledon, a team I saw play my son's former team (Chipstead) when they started life in the Combined Counties League in 2002 (level 9 of the English Football league system. They have come a long way in 14 seasons. I should clarify that my son was 11 at the time, and wasn't yet in the first team. So yes, again the "playoffs are not fair" shouts are heard, with AFC Wimbledon finishing 10 points behind 4th placed Accrington Stanley, but the playoffs aren't about being fair. They are about keeping the season interesting for longer, and about offering a dramatic finish with a final at Wembley. I'm sure the additional revenue for Wembley helps, but playoff finals have been one-off matches since 1990 and as a Crystal Palace fan, I love the playoffs. For supporters, there's no better way to gain promotion, especially into the Premier League. One game, winner takes (almost) all. 

Incidentally, the Serie B play-off rules have some flexibility, so that among other rules, "if the third-place team finishes 10 or more points above the fourth place team, no playoffs will be held". 

James continues:     

As Leicester is the nearest EPL team to where I live I did pay some attention to them this season. I don't think their winning the EPL was a "freak". Personally, I think it will be more common with all the TV money flowing in. Regardless of what the "hardcore fan" thinks it is what the owners think that matters and for them coming fourth in the EPL is more important than winning a Victorian throwback FA Cup or even coming first in the EPL. Arsenal, Tottenham, Manchester City and Leicester will be entering revised incomes streams into their data models.

I stand by my use of the word "freak" which is defined as "a very unusual and unexpected event or situation." I would say that a 5,000-1 win fits that definition, and although the Premier League's wealth distribution is more equitable (with its equal rights TV share) than it could be, the big boys still have an advantage. 

Arsenal, Tottenham Hotspur, Manchester City and Manchester United all made more money from the Premier League last season than champions Leicester City who made £90 million. But they made £72 million last season, so winning the league didn't exactly make a huge difference. What's £18 million between friends these days? While I like the idea that a club can only have 11 players on the field at one time, I really don't see the miracle of Leicester City's win being repeated any time soon. The dominance of the 'super-clubs' shows no sign of ending. I'd be happy to be proven wrong on this though because football was a lot more interesting when I first discovered it in the 1960s. 

James continues: 

Also, Leicester put paid to the nonsense about "soulless bowls". I've never heard such noise from an EPL team. More than in your trad four sheds. Mind you on the day Leicester received its EPL trophy the crowd was not as raucous as the rest of the season. I suppose it was the English reserve kicking in again.

The Emirates Stadium is referred to as a library but you could quite happily read a book in peace at just about any EPL stadium this season. Talking of being otherwise engaged I found it rather amusing when, at the beginning of the Champion's League final, the cameras were trained on the assembled UEFA and FIFA élite in their corporate box. To a man their heads were bowed as they examined the screens of their mobile phones and not paying the slightest attention to a game they supposedly govern. Still, I was glad that Blatter and Platini were not there. Public executions for halftime entertainment? It would make up for a bore-draw.

Apparently James has yet to visit Selhurst Park, where the Holmesdale Fanatics lead the constant singing, wave the fags, and bang the drum whether Palace are winning, drawing or (rather too often) losing and book reading there is most certainly not an option. As fellow Palace fan Jim Daly (not James) wrote recently  

A lot of that has been thanks to the Holmesdale Fanatics, a small group of fans who took it upon themselves to recreate the "ultra" atmosphere often seen on the continent.

And it has worked. Their chants, drumming, banners and enthusiasm has swept around the ground and encouraged those who might before have politely clapped along to get on their feet and sing -- at home and away.

A real club, with real supporters. Wouldn't have it any other way. As for the UEFA and FIFA élite, I guess big matches are just another day in the office for them. It all goes back to my Cup Final post and the downside of perennial success - it gets boring. The public loves the underdog - unless he's named Donald Trump.

What is most definitely not boring, are the NBA Finals, this year in a 2-2-1-1-1 best of seven format.

A nice start to the finals with the Warriors winning a low scoring game 104-89. Game 2 will be higher scoring. And closer.

Penalty Shot In The Foot

I didn’t realised at the time, but the Champions League Final penalty shoot-out was rather unusual in that the side winning the toss, Atletico, chose to kick second, seemingly handing the advantage to Real as teams kicking second have just a 40% probability of winning a shoot-out. A case of shooting themselves in the foot perhaps?

The referee chooses the end at which the penalties are to be taken, and typically “choose the less partisan goal for the shootout”. In this case, Mr. Manu Clattenburg chose the Real end – as I touched upon in my Cup Final review, going for your eleventh title isn’t quite as exciting as going for your first.

Had the FA Cup Final gone to penalties, there’s no doubt about the end at which they would have been taken!

It was also interesting to see the large number of empty seats at the Hull City end during the play-off game earlier that Saturday. Hull City have had a couple of recent visits to Wembley, Sheffield Wednesday haven't, and this was evident from the level of support (numbers and passion) seen. The fact that table topping Hull FC were hosting St Helens the same day in front of 11,247 supporters didn't help! 

Baz commented on the FA Cup Final:

Living about two miles from Old Trafford and a season ticket holder I was obviously pleased when we won the FA Cup but your post has almost got me wishing we hadn't and winning almost seemed a hollow victory it having been a disappointing season in which I attended every game and but enjoyed just a few, the cup win seemed to happen on Saturday and be forgotten on Sunday. It must be hard for fans who start the season knowing their team will probably win nothing, something United fans may have to get used to. I have followed Man Utd since the fifties and I am really pleased that the premier league is becoming more open.

I'm not sure I share the opinion that Manchester United supporters may have to get used to not winning anything, but it does emphasise my point that winning the FA Cup (or League Cup for that matter) means far more to supporters of the non-elites. Leicester City's freak Premier League win was most refreshing, and while we may not have to wait another 5,000 years for a similar shock, I'm not expecting another one any time soon, so any major trophy wins will be in the form of a Cup or possibly the Europa 'League'.

Finally, and admittedly off topic, but I found this saved on my computer while going through a spring clean. Unfortunately I can't remember the source, but it amused me:

If you want to be fit you have to keep doing exercise forever, it has emerged.

Healthy eating and sport have been condemned as a scam after it was revealed that they only lead to more healthy eating and more sport.

Carolyn Ryan of Cardiff said: “After two months of going to the gym I asked my personal trainer when I’d be fit enough to stop all this and eat the fuck out of some pies.

“The look on her face. She said that if I relaxed my diet regime even for a week then the fat would pile on again even faster than before, and if anything I should be stepping it up.

“I thought it’d be like A-levels where once you’ve passed you never think about history ever again, but it’s more like revising history five nights a week for the rest of your life.

“She says after a while I won’t even want a Toblerone any more. That made me cry.”

Personal trainer Donna Sheridan said: “Getting healthy isn’t a sprint, it’s an endless marathon through featureless terrain pretending that chips and sitting around watching telly don’t exist.

“However I do have the warm glow of knowing that I’m better than everyone else.

“Unless they’re right and I’m the moron. Which I occasionally think, but I get that out of my system with a nice eight-mile run.”

Spelling Blunder, Thunder Under

Having been gently prodded from my post-FA Cup Final emotional hangover, a few more (unrelated) observations from the past few days.

Not betting, but football related, and this charming individual (allegedly a Paul Grange from Worcester) is in trouble for going to the Brewers Arms in Worcester wearing this shirt:

I'm not surprised he's in trouble. When I first saw the picture I was appalled. Seriously, who goes out in public wearing a garment that's missing an apostrophe and with the name Rentokil spelled wrongly? No wonder the police were involved and he has been charged with a public order offence - presumably that of displaying offensive writing likely to cause distress. It's good to see these things being taken seriously at last. He has a second shirt which does show an apostrophe being used correctly, although he seems to have taken the easy way out of spelling whatever the word beginning with an f is...   Nice chap.

The NBA Finals are finally set, after the Golden State Warriors covered against the Oklahoma City Thunder in game 7 last night, and we have a re-match of the 2015 final in which the Warriors came back from 1-2 down to beat LeBron James and the Cleveland Cavaliers 4-2.

An interesting comment on ESPN touches upon the need for number /data-based models to be placed into context. Bill Barnwell writes:

By any measure, the Thunder will need to overcome the odds. FiveThirtyEight's model pegs the Thunder's chances of winning Game 7 at 32 percent, while ESPN's Basketball Power Index has them at 30 percent.

The consensus Vegas odds, meanwhile, are even less charitable to Oklahoma City, for understandable reasons: They involve humans. After adjusting for the vig, the initial Thunder moneyline implied that they had just a 19 percent chance of pulling out a series-decider in Oakland. That number continues to rise, and it's hit 26 percent, but it's still below the expectations of empirically derived models.

Betfair had the Thunder at around 25%, but as Bill Barnwell goes on to discuss in some detail, it was the nature of the Thunder's game 6 defeat that suggested to me that 25% might be too high:

One reason why that might be the case is that the models don't have eyes to see what happened to the Thunder in Game 6. The box score says the Thunder lost by seven at home on Saturday, but that fails to tell the story we all saw: Oklahoma City collapsed during the final few minutes of the game, with its offense crumbling into a writhing mass of hero-ball and turnovers. The Thunder led for the vast majority of the contest and had a 90 percent win expectancy with five minutes to go, only to fall to pieces during what might end up being Kevin Durant's final home game in Oklahoma City.

Road teams in NBA game 7s had an 18.5% winning record, and the Warriors don't lose much at home - 3 of 50 to be precise. As for the Unders bet, these have a strong record in game 7s with 50 of the last 84 going under.

Data is great, but it has to be applied in context. Similar to how a draw in football is viewed either as a point won or as two points dropped, there is more than one way of losing a basketball game. Losing by 7 points after leading by 7 points with about 5 minutes left is far more painful than losing by 7 points after coming back from 30 points down and running out of time.

But That Was Just A Dream, Just A Dream

I am accused of sulking. James writes:

This is a long sulk. It was only a meaningless piece of Victoriana with no relevance in modern soccer.

As many of you are aware, for almost 50 years, I have been a Crystal Palace fan. They were my local (league) club. They were the first club I ever saw (technically tied with Birmingham City I suppose). They have one of the, if not the, best names for a football club, and they had great colours. What they haven't had in that time is a huge amount of success. Our all-time major trophy haul is limited to the Zenith Data Systems Cup win at Wembley in 1991 (I was there), with other more modest successes consisting of promotions and since their introduction in the late eighties, play-off wins. We've had several of those, boasting the best record in the league for play-off wins (4) for promotion to the top level. We are also one of the few clubs to have won a championship in our first league season (Division Three 1920-21, I wasn't there). We used to have the outright record for most Premier League relegations, but we have to share that now with Norwich City. Four consecutive top division seasons is also a record we will be matching in 2016-17, and hopefully breaking after that.

So winning the FA Cup last weekend would have meant so much to the club but I'm honestly glad (all over) that I support my local club and can fully appreciate successes (usually modest) when they come along. United won the Cup for the eighth time. Great, but at some point along the way, when you become used to success, winning trophies becomes the standard - for most United fans, 2015-16 was a disappointing season. Liverpool fans might get excited about the Europa League, but qualifying for it is not a success for one of the elite teams these days.

Cup Final day will certainly live long in the memory. The train ride into London from Surrey was lively, and I met up with friends at Victoria for a couple of beers. Gaining access to a pub in the Wembley area proved mission impossible, but upon reaching the stadium, rather bizarrely, among a crowd of 89,000+ people, I ran into three people I knew within the space of five minutes. It's a small world.

"That's me in the corner, that's Pardew in the spotlight"

The atmosphere in the stadium (west end anyway) was fantastic, as anyone watching on TV would have seen. Taking the lead with 12 minutes to go was incredible, but when the big screen showed Pardew - "He's Alan Pardew, he shags who he wants" - gyrating on the touchline, I had a bad feeling. Seriously, your team has just taken the lead in a Cup Final, and rather than calm the players down, warn them of the pressure that now must come, make some adjustments etc., he's out there dancing "hey world, look at me". I thought he didn't want attention these days. Less than three minutes later, and the lead was gone. Only one club has played in more FA Cup Finals than Palace without winning it, and our wait to become the fourth south London club to have their names on the trophy (actually the latest trophy was only introduced in 2014, certainly not Victoriana) goes on. It was rather depressing to have an old school friend later suggest that if the next Palace final is another 26 years away, we won't be here to see it. I might be old, but I plan to still be here!

Thanks James for bringing me out of my mild depression.

On betting / investment related topics, I have received a couple of emails requesting more details of the Cassini Portfolio systems and bets that have been mentioned on here, so I will be putting these together in a single 'user guide' for anyone interested.

Included will be the Bundeslayga and BLUnders systems of course - the 2015-16 Bundeslayga system has wrapped up, with the lowest ROI% since records (i.e. Pinnacle Sorts) began, but profitable. The BLUnders is still technically active for this season, although it is hard to imagine any qualifiers coming out of the Finals Series which starts on Thursday.

Glass Houses

My verbification of the colour red in this post caught the critical eye of Baz who wrote:

Your slipping Cassini, double d in redding !

"My slipping what?", I thought, as I pondered that comment, (the double-D reference side-tracked my mind for a moment) before realising that English language expert Professor Baz had, rather deliciously, fallen victim to Muphry's law, which states:

"If you write anything criticizing editing or proofreading, there will be a fault of some kind in what you have written"

As Ducky McDuckface (above) observes, it's hard to take someone seriously when they don't know the difference between "your" and "you're".

No names, (it wasn't James), but in the past week we saw these examples from a regular blogger:

Because the reality is your probably going to lose the first one.

Oh dear. It wasn't just a one-off mistake either - the final line of the post was this:

Take you’re time!

Here's a helpful guide:

How apostrophes and the words "their, there and they're" are used, or often abused, is also a useful guide to how seriously to take someone.

Moving on, and I'm not sure a word for locking in a loss on all outcomes exists yet, or at least is in common use. While there are plenty of references to 'greening up' to be found - in guides to Betfair trading for example - the optimistic message in such writings (everybody always wins) appears not to want to consider, and thus doesn't mention, the possibility of locking in a negative outcome.

There was much debate in the early days of exchanges about whether a bet was 'laid' or 'layed' but I think the latter has over time become the accepted word.

I wasn't the only one to notice Baz's faux pas. James (he of Betfair Pro Trader fame) commented:

@Baz - Not to mention 're in you're. ;)
@Cassini - I always try to be positive.

As I (not James) wrote almost three years ago on being positive:

The other thing is that successful people tend to be more positive. You could argue that it's a lot easier to be positive when you have achieved some success, however modest, but I think that earned success (as opposed to winning the lottery for example) is often the result of a positive attitude rather than the cause.

I'm not sure I understand fully the negative attitude that so many people seem to have towards others who manage to be relatively successful.

Envy is obviously part of it, (I am a little envious of Ian's £1.4million for example), but I would rather use that envy in a positive way, a benchmark for what can be achieved, and as an incentive to keep moving forward and improving my strategies, than use it in a negative way, by spending hours writing comments suggesting the numbers are made up, that Elo ratings don't work, that workshops are a waste of time etc.

Not picking on Danny specifically, since there are many others like him, but I think that until your attitude changes from negative to positive, you will never have the mindset needed to be successful.

Even Jordan Spieth has admitted as much this week:

I just need to do a little bit better job of being positive with myself and smiling a bit more, having a bit more fun.

Effectively Retired

Smithlondon asked:

Do you declare your profits from "trading" to the local tax man? In the UK there is no tax on "gambling" as HMRC and case law see it as not carrying on a trade. https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim22017

If you are going to start arguing that traders are not gamblers then that's a slippery slope for tax purposes and a lot more "full timers" will find themselves back working for someone else than those leaving because of the PC charge.

In my opinion each bet placed is a bet. Not one half of a trade regardless of your future intent. A second bet merely closes out an open position for a profit or loss. It doesn't change the nature of the first bet.

While I have sympathy it always amuses me when people get on Twitter and scream at the Betfair help desk when the site goes down saying that they are not "gambling but trading" and can't close out a position. No, you've had a bet. On of the factors you are betting on is that you may be able to close out at a stop loss or profit. But in so doing that doesn't alter the fact that the first thing you did was have a bet.

I'll let James respond to the tax question shortly, but I don't think I have ever argued that traders are not gamblers; only that a trader will close out a position rather than let his bet run to expiry. The outcome for the trader might result in a profit, a loss, or breaking-even. Any time you take a position in a market, you are gambling, which is how the tax authorities see it.

Betfair Pro Trader James responded:

@ Smithlondon - You are going off on a tangent. All trades or bets within sport bookmakers and exchanges are regarded as gambles as far as tax is concerned.

Further, most financial trades are speculative and are therefore gambles but as far as the government is concerned they are financial trades and subject to tax.

I argue the difference between trades and bets in sports on an intellectual level that has nothing to do with tax. I just like to differentiate between trades (bets) that go to expiry and those trades which are closed or hedged ("greened up").

Perhaps it's a sign of James' success or optimism that he doesn't mention "reding up", something I've done on many occasions, and an important part of trading.

"Always try to make your wins as big as possible and your mistakes recoverable" - Laura Harris

Marty questions the bet / trade definition, posing:

If I leave a position to run to expiry then haven't I effectively just 'traded out' at the price implied by the result (i.e. 0 or 1 in probability terms)? What difference does it make to anything what we call it?

It makes little difference as I wrote in my last post:

I think... that there is a clear differentiation between a bet and a trade, but... what matters is if your chosen strategy is profitable or not.

It's hard to disagree that a bet expiring is 'effectively' trading out at 1.00 (or 0.00) but it's akin to dropping dead at work from a heart attack and then arguing (from heaven) that you 'effectively' retired.

Except that you didn't retire - like your bet, you expired!

In response to my previously referenced latest post, James wrote:

Thank you for clarifying that I had little input in today's missive and where I did contribute it was more than adequately referenced.

I must point out though that the neck injury was probably picked up the night before the tennis match whilst sleeping due to arthritic neck vertebrae. The tennis merely exacerbated the injury.

To help (or confound) the bet/trade definition further. In derivatives trading one can leave a position open and take delivery of the oil, the wheat or the cash equivalent (in market futures or stock options) or pay the margin if the position goes against. Alternatively, you can trade out prior to expiry for cash only.

I prefer to keep to strict financial trading definitions. Those who only sports trade/bet tend to grab at financial terminology to sex-up their activities without fully understanding them.

"Scalping" is another such word. Say you are a scalper in the financial markets and you might get a visit from the FSA and the City of London police.

One of my concerns when I first entered the world of futures trading was the horrifying prospect of a consignment of pork bellies (I'm using these here as a pars pro toto for commodities in general) turning up at my front door one day because I forgot to trade out of a position. It never happened of course, but as James made clear, you do have the option of taking delivery. Futures trading was a short-lived interest - rather early on, it dawned on me that perhaps it was unrealistic to suppose that I knew more about pork bellies than the full-time traders I was competing against, a lesson I believe I have shared here in regard to active stock trading.

Moving on, and James concluded his comment with:

And finally... You are far braver than I. Squash is a no-go area for me. Even as a fit twenty-something I could walk into a squash court feeling more than capable of beating an obese female on fifty cigarettes a day and yet step out of the court later, a dishevelled wreck.

Sadly, that was probably my last ever game of squash, but what an ending - holding your 25 year old son to 'effectively' a draw...  

Squashed

Baz (and I want to be absolutely clear, not James) writes:

But isn’t a trade just a bet on which way the market will move? Get it wrong and you lose like any other bet.

No it isn't. By definition, a trade requires two opposite actions, buying and selling – although not necessarily in that order.

In the context of sports betting, the initial action is a bet. You now have a position in the market. This remains a bet unless you make a second bet to close out your position.

If a second and opposing bet is made, your two bets comprise a trade, and your trade may be for a profit, a loss or it may break even.

If you let your initial bet run to expiry, that’s not a trade, even if your intention was to make this a trade. Again though, your bet either wins or loses or is a push.

Although I know what Baz (not James) means when he says “get it wrong and you lose like any other bet”, I should point out that a losing bet (or trade) doesn’t necessarily mean that you “got it wrong”.

Similarly, a profitable bet or trade doesn’t mean that you got it right.

It’s all about expected value.

If you are getting 5.0 (4/1) on a 4.0 (3/1) shot, the reality is that you are still going to lose 75% of the time. Does that mean you get it wrong 75% of the time?

No, because you have a positive expected value and thus, on the other 25% of the time when you win, your profits more than cover your losses.

Baz (not James) adds: 

Perhaps we are kidding ourselves by trying to differentiate between bets and trades.

I think, as I’ve tried to explain above, that there is a clear differentiation between a bet and a trade, but to Baz’s (not James') point, what matters is if your chosen strategy is profitable or not.

I do suspect that the ability to trade out of positions these days perhaps leads to less than optimal decisions being taken.

For example, while the initial bet might be taken after much research and consideration, the temptation to lock in a profit, or at least eliminate the possibility of a loss, can be hard for a novice or ill-disciplined trader to resist after just a small movement in the ‘right’ direction.

Behaviour which of course goes completely against the golden rule of trading - keep your losses small and let your winners run.

Betfair Pro Trader James has another post up, less technical than many and one that I can identify with as someone who is also close to 50 (although not as close to 50 as I was yesterday...) 

Poor old James managed to hurt his neck playing tennis, but had a few kind words:

At least the pain was relieved by a post from Cassini at Green All Over (America's #1 Sports Blog!). It was good that a recent comment of mine on his website inspired another old boy back into action. The sports trader blogosphere will be all the more barren if Cassini hangs up his quill.

Pain in the neck James' tales from the tennis court have prompted me to write about my own recent sporting adventures. 

Last month, I decided it was time to teach my 25 year old son some of the finer points of squash. Never mind that I hadn’t played in about 25 years myself, experience matters more than enthusiasm, surely. Just to be sure of success, I gave myself home advantage and arranged to play at the club in Coulsdon where I played in my youth.

It was a little surprising that the court appeared just as I remembered it, same door, same floor, same everything really, except with a quarter of a century of wear and tear and general deterioration added in. (At least the squash courts were playable – the tennis courts outside, on which I also spent many summer afternoons and evenings, were in an even more depressing state - see above).

I thought I acquitted myself rather well for the allotted forty minutes, diving to the floor a couple of times, placing delicate drop shots into the corners, avoiding getting hit, and with the 'time's up - get out' knock on the door surely imminent, was readying myself to shake hands and leave when my son pointed out that we’d actually only been on the court for five minutes, and that what we had been doing was called ‘warming up’. 

Well that's a little disappointing, I thought to myself, as pools of sweat accumulated by my feet, my head span dizzily and my heart pounded at a rate not seen since my days of running the mile in four minutes something, but there was no way out. 

Perhaps I should clarify a couple of things written above - by 'diving to the floor' I mean going into full cardiac arrest and collapse, and by 'placing delicate drop shots' I mean smashing the ball as hard as I could, but at my age, shots barely make it to the front wall sometimes.

I don’t want to talk too much about the match itself; suffice to say that I did score a few points in the eight games we completed, and that we sadly ran out of time to complete our best-of-seventeen match, which means that technically speaking, the match ended as a draw.

Admittedly it started off as a best-of-five contest, but as I felt stronger and stronger, decided to extend the match, first to a best-of-seven, then best-of-nine, then… you get the picture.

I’ll be better prepared next time. I should perhaps also mention that for the best part of the following week, I had a great deal of trouble with stairs, getting in and out of cars, and generally just moving. My parents (not James) generously loaned me their walking sticks for a few days while my muscles slowly regained some semblance of normality. Apparently it's a different set of muscles that are called into action when playing squash than those used for a little jogging (shuffling) around the park or riding my bike.

Pain in the neck James' (yes, James) then wrote:

I have only one negative thing to say about Green All Over and that is Cassini's habit of quoting you and then adding a few more quotes from other people only without attribution. This creates the impression that every quote in his post was by yourself, which is not the case in today's post, Bold Ambition. Still, it's a good article as are all the posts on Green All Over.

This is certainly not intentional. I usually put a link to the source of the quote, even if I don't explicitly name it. I find referencing the source in the text can interfere with the flow of the post, but I'll be more careful in future.

Finally, and I just knew this would happen, I (Cassini, not James) wrote yesterday that:

The BLUnders this season had an ROI% of 2.46% from 142 selections. (There could yet be more picks, but as we move deeper into the play-offs, it becomes less likely).

And just like that, selection #143 comes along, with the Golden State Warriors 12.5 point favourites in their home game versus the Portland Trail Blazers tonight. At 3-1 up in the best-of-seven series, the Warriors are hoping to clinch the series, while the Trail Blazers are probably hoping for a rule change and a best-of-seventeen series...

Bold Ambition

James is back, once again in agreement with me, this time on the topic of what differentiates a bet from a trade. I opined that a bet only becomes a trade when it is not allowed to run its course without an off-setting bet or bets, and James says:

That follows my definition too. A bet is a single leg of a trade allowed to go to expiry. A trade has a return leg in the opposite direction to the entry to realise a profit before expiry.

Far more eloquently stated than my effort. James adds - and if you haven't read this post of his on the subject of "reality versus fantasy", you should, that:

Sports and financial trading is littered with people of bold ambition. Survivorship bias means we only hear from those who succeed. It is, after all, a zero sum game.

Nothing wrong with bold ambition of course, but the ambition needs to be grounded in reality:

While it is all very well to be optimistic, it’s probably more important to be realistic, and the logical conclusion is that with all the resources at the bookmaker’s disposal, any success by an individual is likely to be very short-lived

In James' opening paragraph, he writes:

I never discuss the details of my trades because winning strategies are hard to come by. Share a winner and it becomes a loser because the market will arbitrage the edge out of it.

I'm not actually convinced that most readers recognise a good thing when they see it, or at least lack the patience or discipline to follow through. I've given away a few secrets here over the years, but unless the selections have a 100% strike rate (ideally more) and an ROI somewhere north of 25%, the information appears to mostly be immediately forgotten.

The forums regularly have posters starting new challenges - 2% a day for a year and the like. 2% a day? 2% a day is massive. Actually, it's more than massive. 2% a day on a starting bank of £100 would make the bank over £137,740 by the end of the year. Is this realistic?

That was a rhetorical question.

The BLUnders this season had an ROI% of 2.46% from 142 selections. (There could yet be more picks, but as we move deeper into the play-offs, it becomes less likely).

This was actually the third worst season of the past ten, and the worst since 2010-11, but a 2.46% ROI for a system that takes maybe five minutes a day is, by my reckoning, great. The time spent is key - as Webbo wrote four years ago:

It's interesting that you say punting profits are more value when you factor in the hourly rate as it's for this reason I'm trying to turn my attentions more to these. It's obviously much harder but if I'm honest I am starting to resent the amount of my free time I spend betting inplay and I do fear each time another blog opens of a young person who aims to make a living from inplay trading. Their lives will consist of staring at a screen 24-7 and if I had to price it up, I'd say it's 1.01 that they don't make anything close to a living out of it.

The Bundeslayga is several seasons old now, and for the first time since I revealed it, in danger of a losing season:

Only one selection this weekend currently, which would at least guarantee another season in profit.

And then there's a baseball system that is also historically efficient - it takes about five minutes a day, and over the last ten seasons its record isn't perfect, but it's pretty darn good with a double digit ROI% in nine of those ten seasons:

But it's 'only' 50 to 60 bets, the ROI% is 'only' 12%...

I think I'll pass - I'll go for the bank job on tonight's Romanian Third Division game - much more exciting.

And in the unlikely event that I lose, I'll open another bank. Brilliant.

Sports Investor Wins Although Afterwards Decides Upon Pastures Anew

For those of you thinking that the Betting Exchanges are a viable alternative to a career, there is an interesting thread - "Another boring 'goodbye' after 9 year here" - on the Betfair Forum this week, as another full timer realises they are not.

Siwaadupa (possibly an acronym?) opened the thread (spelling and grammatical errors corrected, and readability enhanced) with:

So the time has come for me.

In 2008 I was saying Betfair is the best thing in world, I will always have something to do (work)

Middle 2008 - Cross-matching - I hate it, it privileges fastest stream person who is happy to pay high charges or it's Betfair themselves

Late 2008 - 20% PC - I could have lived with that - still had plenty to do

I believe 2011, PC2 - shock, completely changed my mind - I started to become worried for the future. 

Then Sportsbook appeared - significantly less customers, particularly on sports like basketball and volleyball.

Tennis bots + basketball bots + football bots are taking significant part of my previous activity - destroying me in some way.

I don't want to moan that it's not possible etc. - In my case, its not worth it- when you add all figures, hours spent in front of PC you will figure out that elsewhere I will have more for less. I want to add that I'm not a mug:

80,337 Exchange points = 52% Commission Discount

So I'm pretty active. I won't be any more from tomorrow. I'm not quitting, but as a full timer its over for me. It's another boring exit for £12 per hour elsewhere.

While there is no confirmation that Siwaadupa actually reached PC2 status, it wouldn't be an unrealistic expectation for a full-timer after nine years.

£250,000 sounds like a lot of money, but when you break it down over nine years, it's not so much at all; a little under £28,000 a year. If you work 46 weeks a year, that boils down to £600 a week.

While that number is net and exceeds the median UK gross earnings (ASHE 2015) for full-time employees of £27,600, not many of us want to be 'average', and career development, annual bonuses, pension considerations and other benefits also need to be factored in.

As I've written here before, sports investing is far better suited to being a part-time activity than a full-time one.

The thread contain a couple of other interesting observations too. One Ghetto Joe posited:

Yep I think PC2 has driven loads away, margins getting smaller and penalised at least 42% of your winnings. All those early players who promoted and extolled the virtues of the exchange now paying 9 times more than any newcomers who do exactly the same thing just because they've been long standing customers who probably won around £17k for each of those 15 years the exchange has been up.

I think I might have written that before here too. Joe later added:

Never understood the mentality of people wanting more charges, we're all using the same exchange, if some are gaining unfair advantages you should close those loopholes down not increase charges to cash in on them too.

Exactly. Again, as I have previously said, Betfair introduced the Premium Charges as their response to those gaining 'unfair advantages' and took a share in the ill gotten gains, rather than close the loopholes.

Finally, forumite fixed states that:

every bet is a trade and every trade is a bet

Not really. In my opinion, a bet only becomes a trade when it is not allowed to run its course without an off-setting bet or bets.

If you backed Leicester City to win the Premier League at 5000-1 (didn't we all?), and let it run, that's a bet.

If you subsequently layed Leicester City, (i.e. made another bet), then those two bets combined make it a trade.

The dictionary agrees with me. 

As a noun, a trade is defined as "the action of buying and selling goods and services". The 'and' is important.  

As a verb, to trade is defined as "buy and sell goods and services". Note the 'and' there.