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When two worlds collide

June 20, 2011 Leave a comment

It’s a bit hard to know what to write at the minute. I wanted this blog to be more than just a daily P&L update so I try to avoid talking too much about how things are going, except in the monthly reviews, obviously. Recently I have been casting an eye over my portfolio and conducting a few reviews which has given me some content but now my portfolio is settled with little need for any more reviews at this stage and no need to consider expanding my portfolio as I am happy with the balance of services. Therefore I am turning to gambling philosophy for this post.

Introduction
I have a fairly busy portfolio with more than a dozen horse racing systems and services including a mixture of backs and lays. As a result of following so many services there is bound to be some overlap in their selections. It may be that multiple tipsters want me to back the same horse or perhaps those same tipsters have all gone for different selections in the same race. Either way I will back each tip as suggested. In the former case that means a large stake going on one horse and in the latter case it means several bets in the same race which obviously can’t all win. But I treat every system individually and separately, each with a different betting bank and each on their own merit so situations like that do happen. However, what should one do when one tipster says to back a horse while another says to lay it?

Analysis
On the face of it we have two tipsters in opposition which is not too dissimilar to two tipsters backing different horses in the same race. In that case they can’t both win so at least one of the bets must be a loser. However, when one tipster puts a horse up to be backed and another puts up a lay on the same selection then obviously one bet will win and one will lose. If the horse wins the race then the back wins and the lay loses. If the horse fails to win then the lay bet is a winner while the back bet is obviously a loser. Having a guaranteed winner and a guaranteed loser puts a slightly different spin on things, as does the fact we are mixing bet types.

There are several schools of thought on the right way to handle this situation. Some will claim that the back bet should take precedence over the lay as the backing system/service has the greater return on investment and thus the lay should be voided and the selection backed. It’s true that a decent backing service will run at something around 10% ROI while a good lay system will operate at something closer to 1-2% but the figures don’t really lend themselves to a direct comparison due to the way lay system turnovers are calculated. 

This method also has a few potential drawbacks. Suppose the same horse is picked out by your worst-performing backing service and the best lay system you run – then what? How you define “worst-performing” and “best” is obviously open to some interpretation. If the backing service is making a long-term loss then you’d surely drop it from your portfolio and this situation wouldn’t arise but suppose for now the backing service in question is in some form of a slump while the lay system can do no wrong and is making significant profits. Do you still void the lay in favour of the back bet?

You could just place both bets in complete isolation, following each system/service without worrying about what any of the others in your portfolio advise. That’s how I handle multiple back bets in the same race so why not a mix of backs and lays? Depending on the prices taken and the relative stakes of the systems involved this approach can guarantee a small profit or a small loss on the race. Ultimately though this approach means you won’t win big but nor will you suffer a big loss. Only you can know how much this matters to you.

Suppose Tipster A advises a back of Pegasus at 5/1 for £50 while Tipster B wants to take Pegasus on and suggests a £50 lay at 6.0 or better. If the horse wins then you make £250 on the back and lose the same on the lay; if Pegasus loses then you lose your £50 stake but win £50 (exc. commission) on the lay. Of course, if you have backed the horse with a BOG bookie and it drifts to say 11/2 SP then you get a nice little bonus out of it. In the case of a Pegasus win you’re likely to get an email from Tipster A crowing about a good win for their service but because of the lay you have more or less broken even. In the case of the horse losing you may breathe a sign of relief as you (more or less) covered your lost stake. But will effectively missing out on a big win hurt more than the relief of not losing your stakes? Of course, if your stakes on the two tipsters are not even then you can win/lose bigger than in the previous example. If your lay stake is only £20 then you still get a decent return if the horse wins carrying your £50 but you don’t cover the full stake if the horse doesn’t win.

An extension of the above is to deliberately turn some of the bet into a trade. Assume our stakes are £50 for Tipster A (back) and £20 for Tipster B (lay). You could split your backing stake into two uneven portions, using £20 of it on a trade with the lay stake and placing the remaining £30 as a straight win bet. Get your trade right and you’re guaranteed a small profit on that, which then adds a little to the win bet if the horses comes home in front else it slightly softens the blow of losing if your horse is beaten.

There are no doubt other ways of dealing with this back-lay situation but which approach is the best? I don’t know. But I do have some data I can look at to help me decide. In the eight or so years I have been punting on horses I have 903 cases where I have backed and laid the same selection. Of those 903 selections 176 won their race (19.49% SR) for a total loss of -49.79pts across both the backs and the lays. This figure breaks down into a profit of 25.26pts on the lays and a loss of 75.05pts on the backs but matters are complicated by different staking plans for different tipsters and systems. Because of this I have renormalised the data using 1pt stakes on each bet which reduces the total loss of 18.70pts with a profit of 41.93pts from the lays and a loss of 60.63pts from the back bets.

So I have made a loss playing selections that various elements of my portfolio have thrown up as both a back and a lay. That surprises me but should it? Based on the fact that these horses have all been selected by lay systems (I have yet to find a decent laying service so all my lays are system-based) that operate with strike rates around the 85% sort of mark one should expect the vast majority of the selections to lose. Also the backing systems/services that pick these horses typically run at SRs in the region of 30-35% so again the horses are more likely to lose rather than win. If the horse loses then the lay bet wins and the back bet is a loser. Based on 1pt level stakes throughout that means the vast majority of the time we’d lose the 1pt back stake and win 1pt on the lay. But that lay bet is subject to commission so our profit on that bet is less than the stake lost backing the horse so a small overall loss results.

When the nag loses the relative prices of the back and lay bet don’t matter (assuming fixed stake lays) but when the horse wins the two sets of odds do come into play. If the lay odds are greater than the back odds the lay will lose more than the back bet wins – something that happened in 60 out of the 176 races where the selection won. So more than one-third of the time I was assured a loss due to the price difference in the two bets. Therefore in 727 races I lost a small amount due to commission and in a further 60 races I suffered a loss due to laying at greater odds than I backed at making it a total of 787 out of 903 races (87.15%). On that basis it’s little wonder my figures show an overall loss.

Knowing that these back-lay selections make a loss would I not be better leaving them alone completely? OK, I’d actually be much better off just laying them rather than backing and laying them but the principle is the same: is my current approach of backing and laying the same horse correct? There is a slightly tricky element to doing anything other than what I do presently and it’s to do with the time some tipsters release their daily advice. I try to get on the advised backs early to take advantage of BOG prices. However, this means I may back certain horses before I later find other systems say to lay the same animal. I could hold off backing anything until I have all my daily selections available but this would mean missing out on several BOG prices and I am not prepared to do that.

I prefer to back early and lay relatively close to the off in order to be able to assess late price movements. I haven’t always followed this method but it is something I have been working on for the last couple of years maybe. Is it working? Of the 903 horses fitting the back and lay criteria I have been able to obtain better back odds than lay odds on 556 of them, equivalent to  61.57%. Since the start of 2010 that figure is 298/406 or 73.40%. It seems that recently I have been much more able to put myself into a better position with these horses. Yes, most of the time the horse will lose and I will end up making a small loss due to commission on the lay bet but when the horse does win nearly three-quarters of the time I am in a position to make a bigger profit on the back bet than my liability on the lay.

Conclusions
I used to buy in to the argument when the same horse is tipped by both a backer and layer that one should favour the back bet due to the greater ROI inherent in such bets. I fell out of that mould some years ago but this is the first time I have seen figures that clearly contradict that point of view. The horse is far more likely to lose than win given the strike rates of all systems/services involved in which case one is far more likely to end up with a losing bet if backing the horse so laying it would add some cover and protect most of the stake.

My figures show the most profitable option is to forget about backing any horse that is picked by the lay systems and to just bet against the horse in question. However, that’s not my preferred option for several reasons. Checking the racing results at the end of the day, or whenever, and spotting a nice winner for one of the tipsters you follow is a lovely feeling. Almost polar opposite to that is knowing that not only have you not backed the horse despite the tipster’s advice but you have laid it. Ouch! While most of the tipster’s followers are celebrating the win you are nursing a severely dented wallet. I really hate that feeling, which is why I favour the semi-trade approach.

I try to get the back part of the action on with a BOG bookmaker as soon as the bet is available but wait till much nearer the off to place the lay side. If the horse drifts I am open to a bigger liability but my back odds are increasing too. On the other hand if the horse shortens I can lay for lower odds than I have guaranteed on the back bet. This approach lets the exchange markets settle down from their opening positions too. It allows liquidity to build and the market to take proper shape, something I really value. And with this semi-trade method it doesn’t matter if the back and lay stakes are not equal as I will look to effectively set up a trade for the stakes that do match, a technique outlined earlier. By adopting this tactic I don’t open myself up to potentially big wins on these overlapping selections but nor do I expose myself to a significant loss either.

My methods may not work for you; they may not suit your style. You may favour backing over laying or the other way round. In some respects it doesn’t really matter how you treat these back-lay horses but you should be consistent in you approach. Whatever method you pick, stick with it unless you have solid evidence that an alternative approach would be better.

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Categories: General, Philosophy

It feels so right, it can’t be wrong

June 4, 2011 Leave a comment

I’ve got the theme from Happy Days in my head now thanks to that post title. Oh well. But in actual fact it refers to a decision I made recently – I’m giving up poker. I can’t make a decent profit from it, and in fact a lot of the time I struggle to make even a slight profit, so what’s the point? There are many better ways I could spend my time rather than banging my head against the poker wall. It took a three-and-a-half hour session at the tables followed by five minutes in the shower (where I do all my best thinking) for me to decide that poker isn’t for me at this time. And once I had made that decision a calm came over everything, the sort of feeling you get when you are absolutely confident that the decision you have just made is absolutely the right one.

I have been trying on and off for a couple of years now to add to my bottom line on a consistent basis by playing poker and I have failed every time. I have tried Rush Poker, no-limit cash games, SnGs, limit cash and so on but nothing has really hit the spot. I may have a good spell and start to think I have cracked it but then the wheels come flying off and I am back to square one. I have been forced to admit that poker is not the juicy source of profit I thought it would be. Perhaps there was a certain degree of arrogance in my thinking but for the last couple of years I have regarded online poker as a money well, a profit source I could tap on a regular basis with relatively little effort. If the horse racing and sports betting isn’t really going too well this month then a spell on the poker tables should help things along. That was my thinking. I wasn’t playing to anything other than small stakes but even so I felt booking some wins at that level would see the bank consistent grow and as I felt my skills increase I would step up the stakes and make greater returns. Theoretically sound but it didn’t work in practice as the consistent profits failed to arrive.

It’s easy to think that my health is part of the problem and prevents me from really getting into a game of poker and giving it my all but it’s nigh on impossible to prove that so it becomes an easy excuse. It’s also an excuse I don’t think I should be using any longer. The fact of the matter is this: I am not playing to the best of my ability when I sit down at the tables. I can’t maintain my concentration and would need some form of blinker in order to stay focused on the game in hand. That regardless of the number of tables I am playing, although I always limit myself to a number I can handle sensibly. More than six and I tend to get flustered anyway so usually only play four at once. I have tried different game speeds and types but the same problems always arise. I’m off checking my email, reading forums etc rather than focusing on how other players at the tables are playing. There just isn’t enough going on at an online poker table to engage my brain. I have thought about upping the stakes so that the money actually means something but I am concerned about the corresponding increase in opponents’ skill levels and the fact that if I can’t play winning poker at small stakes I will just lose money quicker at larger stakes. So I have decided to step away from the game altogether.

That’s not to say I will never play again. I have kept my poker bankrolls in tact at Poker Stars and Full Tilt but right now the game is filed under ‘entertainment’ in my head. I may play now and then to pass the time, just for fun albeit with real money as the play money games are a joke. But any poker I play then isn’t with a view to making a consistent profit. Not that I plan to play losing poker, it’s more that I accept that the stakes I play to are the price of entertainment for however long I stay at the tables. Maybe one day I will work out what is preventing me from playing poker as well as I know I can and address the problem such that I can profit from poker in the manner I hoped I could over the last couple of years but I won’t hold my breath waiting for that to happen.

The shower session that led to this decision also threw up a few other interesting thoughts. I soon realised that rather than playing cards I am better off with some form of structured learning, teaching myself new skills. I need to keep my brain engaged and active but I also need to see progress in whatever I am working on else I lose interest. Poker is a prime example of that actually. I expected to make consistent profits or at least see my skills slowly improve to the point where I could be confident of beating a certain level of opponent (based on stakes). That didn’t happen so my interest in the game waned although I was still sitting down at the tables, playing worse and worse which just fuelled the downward spiral and frustrated me. I have a number of gambling related projects that have cropped up over the past five years or so and I am keen to develop some of these ideas but as I lack some of the required skills I have never got very far with them. Now is the time to change that by learning some of those skills. The idea is to buy a few books, learn what I need to know and start bashing away at some of these projects to see where they take me. With that in mind I have picked up a book on HTML and CSS as several of the ideas are web-based and I could do with better web development skills. A solid grounding in the basics seems like a good idea with a view to expanding my skills later on to include things like PHP.

So that’s the new plan – poker come and gone in an afternoon. As the title says though, this decision feels so right that it can’t possibly be the wrong thing to do. I should have done it much sooner if truth be told. I came halfway down this route several times over the years but never quite reached that tipping point that would have seen me give up poker in favour of other projects. I have to make sure I see the decision out this time though. It does feel like the right move this time so hopefully I won’t have any problems on that front.

That said, it’s going to be a little while before I am able to really settle down with the books as there are still a number of reviews awaiting my attention. I managed to complete my monthly review for May yesterday and published that but there are still a few Soccer Systems reviews to complete as well as a couple of services in my portfolio to cast a quick eye over. I hope to get all that out the way as soon as possible, no point dragging it out any more than necessary, but based on past experience there is a good few days work in that lot so the HTML will just have to wait a little longer, which is a bit of a shame as I am burning to get on with it. Perhaps I need to work part-time on those reviews to free up some time to learn new skills that I am sure will serve me well in the future.

Categories: Philosophy, Poker

Diversity – not just a street dance troupe

April 20, 2011 2 comments

There has been a lot of talk of late on the Secret Betting Club forum about losing runs, portfolios and whether gambling can truly be made to pay in the long run. There is a lot of negativity in these discussions interspersed with some pretty decent advice as it happens. I have added a few thoughts of my own to the forum discussions but I feel that’s not necessarily the right medium for some of what I have to say. It seems very big-headed to tell a forum of gambling enthusiasts how I go about things and how I feel that helps me handle losing runs etc. It’s a bit preachy isn’t it? Anyway, what works for me won’t necessarily work for others. But this is my blog, all about me and my gambling, so this is surely the ideal place to let loose with my thoughts on how to manage a portfolio, how to cope with losing runs and things like that.

The importance of a balanced portfolio
If you’re a regular visitor to this blog then you no doubt know I favour a portfolio approach to my gambling and that details of my portfolio can be found here. I operate a fairly large portfolio compared to many others I read about who prefer to follow a small band of tipsters. I recently posted about the need for me to maintain a big portfolio else I get bored, take my eye of the ball and damage my bottom line. But I can see that others may be different and would rather go for quality over quantity.

The reason I prefer the portfolio approach is to avoid having all my eggs in one basket. I want to make money from gambling – who doesn’t? What’s more I want to make money on a consistent basis. For me diversification is key to having a successful portfolio. That way you minimise the impact of a downturn in any particular sport. If horse racing was the only sport I bet on I would be stuffed if there was no racing for some reason. But there’s racing virtually every day of the year so what are the chances of their being no racing? Remember the weather at the end of last year? The snow caused plenty of race meetings to be cancelled. OK, it passed soon enough but think back to the foot and mouth outbreak back in 2001 and the impact that had on racing. A similar incident could easily cause UK horse racing to be suspended for a period and then what would I do? Other sports can be affected in various ways too. For example, there are currently doubts as to whether or not there will even be a 2011/12 NFL season as the players and league cannot agree on how to split the revenue the sport generates.

Diversification means different things to different people. When I talk about a diverse portfolio I mean one that includes a mixture of tipsters and systems, one that includes backs and lays as well as one that has coverage of several sports such as horse racing, football, US sports etc.

I think systems are important for balance. With a system you pay a one-off charge to obtain the system rules (unless you develop the system yourself) and then they are yours to do with as you please. The system may or may not come with past results but you can usually run the rules through a system builder to check past performance. Conventional wisdom says that systems lose their edge over time but you can sharpen them up again by tweaking the rules if you like. The system rules give you an insight into the angle the system author is trying to exploit so you have a good starting point for researching how you may want to update the rules.

With a tipster you only have two choices: follow their advice or not. You don’t know how they came up with their tips and they are unlikely to tell you. You either trust them to find the winners or you don’t. And with a tipster you may end up paying for a lot of advice you don’t use. Suppose you have taken out a long membership option such as a year’s subscription. Now suppose that after a decent start things have turned sour and eight months in you drop that tipster. You still have a third of your membership to go. You effectively have four months of costs with no chance of a profit to offset them.

You need to balance the one-off payments for systems and the ongoing costs of tipsters. The longer you use a system the cheaper it works out. The same is not true of a tipster.

The advantage of having a mixtures of backs and lays is their contrasting strike rates. A good backing system may have a strike rate around 40% whereas a good laying system should come in around 85%. Lays will (should) bring in small, regular profits interspersed by large losses whereas backing horses will result in steady, small losses interspersed with decent profits. That’s a slight generalisation but it’s true enough. A portfolio with the right balance of lays and backs will have short losing runs and should provide steadier returns than a portfolio that is entirely backs. The mental side of this should not be underestimated. It’s easy to panic when a small portfolio of backing systems all hit losing runs around the same time. A larger portfolio that includes several lay systems is far less likely to all go wrong at once giving you a break from the losses that some systems may be experiencing.

Portfolio Maintenance
Unfortunately you can’t simply set up a balanced portfolio and wait for the profits to roll in. You need to monitor the performance of your portfolio as a whole but also the individual elements. As with a traditional investment portfolio of stocks and shares you have to be able to spot when you have ridden some trends as far as they go and jump off before they turn unprofitable. In gambling terms you need to spot when a tipster has lost their edge.

How do I determine when tipster/systems in my portfolio have lost their edge? After many years of gambling it comes down partly to feel or instinct and partly down to statistical analysis. I have various tabs in my spreadsheet showing me the latest stats for each component of my portfolio. I have overall stats plus quick breakdowns by year and by month and at the press of a button can have any individual system or service analysed in fine detail with numerous statistical angles explored and useful graphs churned out. These all help me decide when to ditch a tipster or system.

I tend to get a feeling about how a service is doing simply from recording the bets and results. A little voice in my head pipes up now and then saying something like  “hmm, that system hasn’t thrown up many winners of late.” Then I have to satisfy my curiosity and check whether or not the little voice is correct. I tend to start with the month-by-month profit figures to see how said system has done in the last few months. Has it made a profit? If so then I probably don’t need to worry about this one too much but will still give it some cursory analysis. On the other hand, if the figures are all red then I will look deeper at other stats on this system such as overall strike rate, strike rate this year (or at least over last three to six months), longest losing runs etc. I want to know if recent poor runs are entirely in line with what is statistically likely for this system given the overall SR. I may then look at further breakdowns by month of the year (looking for seasonal variations), day of the week and so on before studying profit, ROI and SR charts. I want to fully understand what is normal for this system and how the recent performance compares with that baseline. If I don’t like what I see then the system will probably be placed on one of my Watch Lists signifying its days as part of my portfolio are numbered unless profits pick up significantly.

What about adding systems to my portfolio, how’s that work? I am always looking to maintain a balanced portfolio so I will review my portfolio as a whole in order to identify potential weaknesses and look to strengthen them. That may mean filling gaps left after dropping a certain tipster or it may mean expanding my portfolio in a different direction such as the inclusion of a specialised rugby tipster, for instance. Once I have identified the area I wish to address then it’s time to start looking around to see what is on the market.

I use a mixture of personal recommendations, SBC reviews and gut feelings when picking new tipsters. I also rely quite heavily on my first impressions of the tipster’s website. If they haven’t gone to the trouble of putting together a decent website then I’m usually not interested. I don’t need anything flashy but a clean, simple website that tells the first-time visitor everything they need to know isn’t too much to ask is it? I honestly feel that if the tipster can’t even manage that then they aren’t taking a very professional view and I’m not sure I want to do business with them.

I’ll be honest and also admit that price plays a significant part in my decision to adopt a new tipster. I’ll do plenty of research where possible, looking at past results, performance figures and personal experiences but at the end of the day price can force my hand. I rarely look at tipsters charging more than a couple of hundred a year for tips. Having read a few years of SBC reviews I haven’t seen any real correlation between ROI and subscription fees. A 10% return on investment for a £50-per-point punter is going to net him £5 per bet (on average) whether he pays £25 a month or £100 a month for the advice. So why pay more than you have to? Reducing costs is just as good as increasing profits – it all looks the same on the bottom line.

Staking matters
Whenever I start following a new tipster I operate to small stakes. Even if the tipster has received glowing (independent) reviews and has a stunning set of stats going back years I won’t dive in. They are still new to me and I need to make sure I can get on with their methods so the stakes are low while I build up a feel for the service along with some early stats of my own. It’s important I see how the tipster does when it’s me placing the bets and recording the prices. I need to know that I can obtain the kind of performance they claim to deliver. Only when I am satisfied that their reputation is justified will I increase stakes. This may mean I don’t cover subscription costs for a while (sometimes quite a long while) but I’d rather this than dive in with larger stakes and lose more that way.

Ideally the small starting banks I use would grow and with them the stakes I use but in reality I wouldn’t cover subscription costs for several years in some cases if I stuck to that idea. Fortunately there is leveraging which allows me to play with larger stakes and turn a tidy profit. More on leveraging another day as my approach to that is a blog post in itself. In short though, leveraging allows me to start with small stakes while I prove a tipster then increase them to maximise my profit. This is a much lower risk approach than starting with ‘normal’ stakes from day one.

Getting your staking right is vitally important. Having a balanced portfolio is one thing but if your staking is wrong then that portfolio just won’t work and could end up costing you dearly. You have to have balanced staking also. Different systems and services will have different return rates as well as different SRs and potentially vastly different volumes of bets. Your staking needs to account for all of these factors. It’s all about balance.

I find it hard to give solid staking advice along the lines of “do this, don’t do this” as I use so much gut feel for my staking. I have increase/reduction triggers in place so that I can raise/lower stakes as the bank hits certain high or low points but I often tweak individual system stakes based on statistical analysis which may show, for example, that I reduce the betting bank from 40pts to 30pts without significantly increasing the risk of going bust. That allows me to increase the stakes per point for that system to maximise my returns.

Will it work for you?
I’ll be honest and say I don’t think anyone else could take what I do lock, stock and barrel and make a living from it. Obviously the way I am set up is designed to suit me and the way I work but my personal circumstances also influence my approach. I am fortunate enough to be in the position that while able to gamble full-time I don’t need to earn a proper living from it. I have realistic expectations when it comes to the profits I can expect based on the stakes I am using but the low pressure environment around me means I can take the time to ensure my portfolio is balanced before upping the stakes. I tend to think of it like an apprenticeship – I am serving my time on low wages while I learn the skills and make sure I am properly equipped to make a living from this game.

I know very few other people will enjoy the luxury of the freedom that I enjoy. I know there are plenty of full-time gamblers out there under pressure to deliver on a consistent basis and good luck to you all. I know I am doing the right thing by building up slowly and in time I will enjoy profits commensurate with the effort I have put in over the years. But till then I am content to keep learning and take things slowly.

I hope that some of you reading this blog are learning a few things along the way also. I don’t expect to teach many people much but if I can challenge the way you think about certain aspects of gambling I will be happy.

Categories: General, Philosophy

It’s not all fun and games

April 12, 2011 1 comment

I recently experienced a eureka moment, a real moment of clarity. It came to me completely out the blue as though my subconscious had been working on a problem for a while and suddenly worked out the answer and passed it up to the conscious part of my brain to have a look it. It seems the problem was boredom.

Since Adrian Massey retired getting on for a month ago now things have been a bit different for me. My portfolio is smaller, as is well documented throughout this blog, but my overall daily workload has been reduced even more. Largely this is because I was forced to close Unity Racing, my tipster service. That means that each morning I am no longer running the systems to identify any Unity Racing qualifiers, I’m not updating the spreadsheets of results for the three systems that made up the service and of course I’m not sending out the emails or updating the website with the latest information. These tasks didn’t take me that long each morning but they kept me busy for a short while and were an established part of my routine.

I have also made a few other changes to the way I operate. A little while back I used to maintain a webpage of system qualifiers for Win2Win. I had done so for years as it used some bespoke software I wrote. However, the effort involved in running this operation recently become a bit of a burden so I gracefully backed out of this service. Again, the actual workload wasn’t massive by any means but it was something else to do of a morning. I don’t regret stepping away from that as the bespoke software it required was getting trickier to maintain on a regular basis and the rewards just weren’t worth it. I could without the feeling of dependence and the need to deliver quality that comes with supplying a service. I wanted to go my own way. Incidentally I still use the software but these days it is held together with sticky tape and dirty hacks but as it’s only me that relies on that’s not so bad.

Another change I have made to my day-to-day activities is how and when I place some of my bets. For a long time I have been taking measures to protect my Best Odds Guaranteed (BOG) accounts. I’m not going to detail those methods here as this is a competitive industry and any edge I have worked out I want to keep. But I will say that I have made a few changes recently in an attempt to hit the BOG firms a little harder. I figure they are all going to shut me down in time so why not try to sting them for the maximum while I still have the opportunity. I haven’t ramped up the aggression too much, just a little, but the main change has been to the time at which I place my bets. I am betting earlier than I used to which means that when the racing is on I have less to do since many of my bets are already on.

As I touched on earlier, my portfolio was cut when Massey retired but I have been working to build it back up again. However, all the services I have taken on involve backing selection; I haven’t found any worthy lay tipsters or systems yet. And because of the changes to the way I back horses these new services haven’t really increased my workload very much. In fact I am pondering expanding my portfolio even further although at present the increase in subscriptions and membership fees that would involve is putting me off somewhat.

You see I have come to realise that I need to be kept busy. I need something to do all the time. And it needs to be something that really grips me and keeps me interested. I love to gamble so having a large portfolio suits me. And it’s not just that I love the action that goes with gambling, I love tracking the performance of all the various systems and services so I can see how they are all doing, what’s working and what’s not. Active portfolio management if you like. But the changes I have made to the way I back horses has reduced my gambling workload and consequently I am getting bored. That boredom is causing me to lose focus so I am not taking the time to make sure that all my lay bets are on at the very best possible prices and so on. I am not battling for every edge I can, I have become lazy. And that’s bad!

I have spoken a couple of times now about finding a spark, something to kick-start things back into action. I think I first mentioned it in relation to my football system development that had stalled. It’s still stalled because I have yet to find that spark. I made a small amount of progress the other night, adding more structure to one of the reports I was writing which will help it develop in a more orderly manner and helps me arrange my thoughts better. But that’s still not enough. That said, having identified the problem – boredom – I think I can work round it. I just need to keep my brain working on something fun.

A slightly smaller portfolio than previously combined with a reduced workload should leave me more time for activities such as football system development and playing poker. Both of those had gone off the boil of late but I think I can bring them both back up again. As I said above I have updated one of my football reports and now I have something that can act more or less as a template for future work allowing me to crank through some of that and hopefully turn out some useful conclusions. And I have been reading a couple of SnG books to get my poker back on track. I have identified several areas where I was going wrong and my results have started to improve although it’s early days there still. I’m hopeful that the improvements will continue to pay dividends though.

All of which means I have profitable ways in which to fill all this additional free time I have created, and that can only be good news. I have identified boredom as a real problem and know the warning signs now. I must be vigilant and take measures to make sure it doesn’t adversely affect my gambling. If I let my brain get lazy it will cost me money.

Categories: General, Philosophy

The pitfalls of each-way betting

March 31, 2011 Leave a comment

I’m sure many of you have your own thoughts on each-way betting. To some it is a waste of time – if you fancy the horse to do well then back it to win and if you don’t think it can win why back it at all? To others it is a way of either securing some sort of return on a fancied selection if it fails to get home first but makes the frame. Or each-way betting is a handy way of profiting from big-priced selections that are unlikely to win but may run close.

I don’t know where I stand on the subject really. I think that’s mainly because I don’t pick very many of my own horse racing bets so don’t have to think about how best to back them. I follow a lot of systems and tipsters so the bet type and staking is all laid out for me. But I still have choices to make, in particular where to place the bet, and that’s something I want to look at now.

When betting there is often uncertainty as to whether you’d be better off placing the bet with a bookmaker or using the exchanges (e.g. Betfair). When it comes to each-way betting that uncertainty doubles. To illustrate this point let’s take the case of Break The Chain, a runner in the 3.30 at Towcester on Monday 28th March 2011. I received a tip for this horse around 12.30pm, some three hours before the race. The advice was to back it each-way at 4/1 with the BOG bookies on place terms of 1/5 odds for three places. Was that truly the best option though? I had to investigate.

When placing any bet I will always compare the prices offered by the bookies and what is available on Betfair. If the price on Betfair is better than that offered by the bookies, after factoring in commission, then I will usually go with Betfair unless I think circumstances will change that will make the bookies the better odds, e.g. a horse will drift out to a larger SP and I can place my bet with a BOG bookmaker. This isn’t an exact science by any means and involves a lot of feel and gut instinct. I don’t always get it right but I do well enough out of this. Better that than just taking the first price available.

And so it is that when I get a tip for a horse at 4/1 I look to shop around and see if that price can be beaten. At the time the tip came through the runner was available at 6.20-6.60 on the Betfair win market, i.e. it could be backed at 6.20 and laid at 6.60. Approximately £24k had been matched on this market and weight of money suggested that the price would contract, in the short-term at least, although there had been relatively little price movement since the market opened. As this was an each-way bet I needed to check the place market too since an each-way bet is just a win and place bet on the same selection. The place price was 1.34-1.39 with just £7k matched. The price for Break The Chain to place was creeping up according to the graphs but it had some way to go to be on a par with the bookies’ each-way place price.

Assuming we take the odds that are available immediately, the Betfair win price is 6.2, significantly greater than the 4/1 (5.0) available with the bookies. However, the place price on Betfair is just 1.34 compared to the 4/5 (1.80) you’d get on the place part of an each-way bet with the bookmakers. So which is the better option?

Let’s compare the returns from each when the horse wins assuming the current back prices taken:

Betfair: +5.2 (win) + 0.34 (place) = 5.54 exc. commission or 5.263 after 5% commission

BOG: +4 (win) + 0.8 (place) = 4.80 no commission

That assumes the price doesn’t drift and the Best Odds Guarantee doesn’t kick in and give us a bigger return. On that basis, Betfair looks to be the better option by nearly half a point but if the price drifts to 9/2 SP then BOG becomes the better option.

What about the returns when the horse just places:

Betfair: -1 (win) + 0.34 (place) = -0.66 exc. commission or -0.677 after 5% commission (bets are in different markets so commission is payable on the place profits)

BOG: -1 (win) + 0.80 (place) = -0.20 no commission

Here, the BOG bookie is by far the better option, and that’s without factoring in the chance that the SP will be greater than 4/1 and the returns will be greater than calculated above. If the Betfair SP on the place market is greater than 1.34 then our bet is unaffected; with Betfair you take a price and are stuck with it.

However, there is also a chance that a non-runner will reduce number of places paid out by bookies. This was an 8-runner race so any non-runners mean the each-way terms change to 1/4 for 2 places with bookies but Betfair still pay out 3 places. Therefore that must be factored into the calculation too.

If Betfair is the better option for the win bet and BOG bookies better for the place part of the bet what do you do?Don’t forget that an each-way bet is simply two bets (win and place) and there is no often reason why both have to be struck with the same firm. Admittedly not many bookies allow place-only betting but a few, such as Paddy Power, do. In this instance Paddy Power were offering a paltry 1/6 for Break The Chain to place. That’s comfortably the worst price I saw for that bet all day and actually quite insulting in some respects. There are other exchanges though. Betdaq were 6.60-6.80 on the win market with around £22k matched while the place market was running at 1.33-1.42 with just £666 matched. It appears that Betdaq also offer an each-way market but there was not a single price shown and not a penny had been matched on that market.

Betdaq has the best win price but the best place price is unavailable as a separate bet, only as part of an each-way bet with the bookies and that reduces the odds on the win bet. But what are the chances of the horse actually winning anyway? Is it worth sacrificing a bit on the win odds for better place odds?

If you’re betting each-way then the price (to win) is probably greater than evens, probably significantly so as in this 4/1 example. This means horse is far more likely to not win than it is to finish first so it is probably best to base conclusions as to which is the best deal around the best place price. Also by invoking the best odds guarantee available with several bookmakers you are protected if the horse does drift in the market. It only takes a fairly small shift in the odds for the BOG firm to become best on the win market as well as the place part of the bet.

This is very much an inexact science and quite often gut feeling and instinct come into it. If you think the horse will drift (and thus the market feels its chances of winning decrease) then you may want the BOG safety net. Alternatively you may want to lock up a decent place price (not that one was available here) on the exchanges and worry about the win bet later. There is so much to think about when betting each-way and it is hard to get every bet right but hopefully this example has given you something to think about before lumping on your next each-way selection.

Incidentally Break The Chain finished 3rd at 5/1 SP (1/1 the place) and 7.24 (win) and 1.35 (place) on Betfair. 8 ran. A bet with a BOG firm broke even but a bet on Betfair would have lost around two-thirds of a point.

Stalled

March 27, 2011 Leave a comment

The last couple of weeks or so have been rather odd for me. It has felt like I have been treading water. Like I have been in limbo waiting for something to happen. It’s a very odd state of mind, and not a particularly helpful one either.

While gambling isn’t the most dynamic and exciting of career choices it has its moments. I see each bet as a two-part event. The first part is getting the bet on. You have to compare all the prices available and try to get on at the best odds you can. This means weighing up various bookmakers against one another based not solely on price but also things like recent history with that firm as you don’t want to risk getting your accounts restricted or closed if you go on an extended winning streak with certain firms. Exchanges such as Betfair also come into the equation as you compare the prices on offer there, after accounting for commission, with the best the bookies can offer. But you also have to take into account the chances of the price drifting in which case you probably want to be on with a BOG bookie. Placing a bet is not as simple as finding the right market with your favourite bookie and putting your money down.

The second part comes when the bet is settled. Here’s where you find out how good a job you did in the first place. How does the price you took compare to the starting price? Were you delighted to get your order at 9.8 on the exchanges matched only for the horse to drift just before the off and return a starting price of 9/1 meaning you’d have been better off betting to SP? It happens, but you can’t beat yourself up over it. You just have to learn from it and move on.

When a bet is settled you obviously find out if it’s a winner or a loser. I tend to let losers just wash over me, accepting them as part and parcel of what I do for a living. It should be much the same with winners too really, and for years I was relatively disinterested in those too. That was until someone pointed out that if you don’t get any joy from the winners why bother betting at all? Now I do at least allow myself a fleeting moment of celebration when the winners come along. The bigger the winner, the bigger the smile. But it is soon back to business as normal for the next bet.

Except for the past couple of weeks. I have been going through the motions and little else. No excitement from fighting to get on at a good price. I have been flying on auto-pilot, putting all the bets on with barely a conscious thought as to what I am doing. And when it comes to settling the bets in my spreadsheet all I have really been aware of is that the ups and downs roughly cancel one another out and my net result for the day is negligible. In some ways it feels like just rewards for the effort I have put in but on the other hand I started to think that it was a good job I didn’t bother making too much of an effort if I am not going to make anything as a result.

What I was screaming out for was a big day. A day where I made a really tasty profit, one that would shake me out of my stupor. And if I couldn’t have that I would have the next best thing:  a day of heavy losses. I used to think that gamblers who said losing was the next best thing to winning were idiots but there is quite a lot of truth to it. It’s the excitement, the buzz that comes when big things happen in gambling. Whether that be a big win or a big loss you still get a buzz from it, a surge of adrenaline and excitement. It sounds stupid but in many ways I would rather have a day where I lost a wedge rather than a quiet day where nothing much happens.

It perhaps didn’t help that this lull I was experiencing also extended to my football research and system development. I’m not sure whether one was fueling the other and in fact it became a vicious cycle but both my gambling and system development were negatively impacted. Fortunately events conspired to break the cycle and greatly improve matters.

Things started to move on the betting front. The profits started to mount up and over the last few days I have had some good results and it’s all starting to tick along at a much better pace. The flat spot seems to have passed for a while and it’s back to regular action.

At the same time my brain kicked into action again. It was as though my brain was waiting for my subconscious to mull over a few problems and report back with solutions and until that happened I couldn’t meaningfully progress with the football betting project. Fortunately something just clicked, completely out the blue, a few days back and I am back up and running in the right direction with that work again.

It’s funny how you can have these periods where the job you love seems like such a chore but that’s one of the drawbacks of working seven days a week. However, I am enthused once more. I am keen to get on with the gambling and with the football system development. I want to get on my PC and make some progress rather than sit around doing whatever. I never really experienced this in the 9-to-5 rat race but I actually want to get up and go to ‘work.

Denial. Anger. Bargaining. Depression. Acceptance.

March 20, 2011 Leave a comment

Today is a day I have been dreading for a little while now. I knew it was coming, I even knew when it was going to happen, but even so it’s a little bit of a shock as the full impact of what has happened dawns on me. It’s a kick in the balls I have been expecting but that hasn’t lessened the pain any.

I’ve maybe made it sound overly dramatic but I’m talking about the closure of the Adrian Massey website and with it his ratings service. The loss of those ratings has cost me my tipster service and also a good chunk of my own gambling portfolio. I’ve known for a week or so that this would happen and that it would happen today but it is only know that it has happened am I really able to determine how I am affected and what I can do about it.

The past week or so has been a funny old week. I have felt somewhat in limbo, unable to take positive decisive action as though at the back of my mind I felt that Massey’s decision wasn’t real somehow. Maybe it was the wording of his announcement, in particular the bit where he said it was “likely” the last day would be 19th March. Subconsciously I may have been clinging to some hope that maybe the last day of his ratings wouldn’t be 19th March and perhaps he’d even change his mind about retirement altogether. But now I have to face reality as the ratings service has indeed stopped as Adrian said it would.

The dust hasn’t completely settled as I’m not yet 100% sure how many of the third-party tipsters services I follow are similarly affected by the Massey issue but for my own part the picture is clear enough. I have had to suspend my tipster service (Unity Racing) which is a shame and feels like a massive failure but these things happen. If I step back and look at things from an impartial point of view I can accept that the Classic Lays and Premier Lays systems just weren’t working as well as I had intended. It’s hard to fathom why that should be the case but I have to accept the facts as they are. Unfortunately the closure of Unity Racing has been a little harder to accept due to the excellent recent performance of the Market Leaders system. This was a new lay system introduced at the start of the year to make up for the lousy performance of the other systems and after an inauspicious start it has been flying. I can’t help but think this could have turned around the fortunes of Unity Racing and also made me a nice profit along the way but as it relied on Massey ratings it is no more. Of course, a good few weeks or even months is no guarantee of future performance and the Market Leaders system may not have saved Unity Racing from failure anyway.

But it’s no good wondering whether any of these systems would have made me my fortune over the coming years. They’re gone, deal with it and move on.

And that’s what I am trying to do. This morning I have rejigged bits of my spreadsheet so that only my current active portfolio is displayed. The various systems I have lost to the Massey ratings have been reclassified as discontinued. Acceptance that they are no more and that I must move on.

If I do have a problem accepting that the Massey-based systems are no more and that I must deal with this and move on then it will be because of the change in mindset I will have to adopt. Good laying systems are hard to find, as are decent lay tipsters. Because of this it will be hard to replace the lost laying systems with like-for-like. If I want to increase the number of systems/services in my portfolio (which I think I do) then the lack of successful lay offerings out there means I am more or less forced to add more backing systems/services to the mix instead. Unless of course I take the time to develop my own laying systems but as I said last week I want to work on my football system research at this time. By adding more backing systems I am going to have to accept a greater number of regular losses punctuated by big wins rather than the small regular wins punctuated by large losses that typifies a lay-heavy portfolio.

It may seem to many that what I am moving towards is becoming a normal gambler, one who backs far more than he lays. And maybe that’s it, maybe the loss of the Massey ratings will force me into normality. Now let’s see if I like being normal.