More portfolio changes

July 24, 2011 2 comments

Ever since Adrian Massey retired from the ratings game earlier this season there has been a big hole in my betting portfolio. Massey’s ratings powered many of the lay systems I was following at the time and without the ratings the systems simply collapsed. I have tried to rebuild my portfolio in the meantime but with few decent lay tipsters out there (I don’t really know of any, as it happens) I have had to switch some of my focus to backing horses rather than laying them. By adding some new horse racing tipsters to the mix I have probably improved the overall quality of my portfolio although quality is difficult to measure really. But I haven’t been able to fill that gap left by the Massey-powered lay systems…until now.

OK, I probably haven’t completely filled the gap but I have added a couple of new lay systems – Blinkered and Blinkered AW – to my portfolio and already instinct and gut feeling tells me the balance of my portfolio is better. I talk about the balance of my portfolio a lot and it’s another concept that’s almost impossible to measure and quantify. And when I do talk about balance it is usually to say I am happy with it and then not long afterwards I change the composition of my portfolio thus changing the balance. But because it can’t really be quantified I have to rely on instinct to measure how pleased I am with the balance and after adding in a couple of new lay systems I feel happier with the make-up of my portfolio.

The new systems came pretty much straight out of the latest SBC newsletter/magazine. No point denying it as other SBC members would probably spot it at a distance. But then surely that’s the point of the strategy articles in the magazine, so that readers can take these profitable angles and use them to make money. This time though I have been back over the angle identified and done some verification of the data to satisfy my own curiosity and as a result I have put my own little twist on the system identified in the article and split it into separate turf and AW systems. I’m not sure it will work so well on the all-weather courses but I am really after a year-round profit so I have decided to track turf and AW separately so that if it doesn’t work so well on the dirt I can easily drop it and just stick with the turf racing.

It feels slightly odd adding these systems straight into the mix like this. I don’t normally start following a system/service without really proving to myself that it will work and deliver the sort of performance I expect but I have jumped right in with these systems as the stats shown in the SBC newsletter really stood out and I have since been able to verify the angle they highlighted. That said, I will be keeping stakes small while these systems bed in and if it looks like they don’t work for whatever reason I will be swift to remove them but I feel they deserve a chance. And it gives me more lays, which is something I have been craving for a while.

In other news, I have been looking at whether it is possible to expand the Simplex method to other divisions. I have added one new division in each of the past couple of seasons and considered doing the same this year. I have crunched the numbers but I haven’t really found another division where I can balance risk and returns in the same way as I have been able to for the Premiership, SPL and Serie A

Serie B was a possibility but I can’t quite make my mind up on that one. I fear the Italian second division may be relatively tricky to follow in terms of getting hold of accurate fixtures and the bookies may not stand any sort of decent bet on these matches. That’s all speculation of course but if I have doubts I usually don’t proceed and it is unlikely I will extend the Simplex coverage to Serie B I’d say. I trust my gut, as you have no doubt picked up on by now, and this one just doesn’t feel right.

Bundesliga One was another possibility but there have been several losing runs of 20+ in the last few years and while they don’t happen that often they happen often enough to have a major influence on the staking. Most bets are a few points and in a typical season the stakes on most teams won’t even get into triple figures so it’s tempting to raise the value of each point to maximise returns but every now and then the stakes get up around 8000pts which means one needs to keep the point value low in order to control risk. In cases like this it’s hard to strike the right balance so its best left alone I feel. Bundesliga Two looks a happier hunting ground than the top division but I don’t like to include lower divisions unless I also have the top flight in action. I can’t really put my finger on why but it just doesn’t feel right to me so I won’t be expanding into Germany either.

Overall I have now looked at 16 different divisions across Europe and it seems I have already identified the ones where the method seems to work best so I am happy to sit back and let the systems do their work now. Further to my last post on Simplex though I have decided to keep the Prem Simplex stakes the same for this season. The game of football will still be around for many years to come as will betting so there is no point taking undue risks so I will use this season to build up more funds and data ready for larger stakes at some point in the future.

Categories: Football, Horse Racing

Another look at the Simplex systems

July 21, 2011 1 comment

Introduction
This weekend sees the start of the Scottish Premier League and it’s still only July. Madness! Everyone knows the football season starts in August and ends in May. OK, there may be exceptional circumstances that necessitate a slightly early finish, towards the end of April in a World Cup year maybe, but a July start? I presume it’s to try and get as much play as possible in before the bad weather hits in December and January but it still seems odd to me, not least because I don’t really get back into the football vibe until August most years. I’ve known for weeks that the SPL starts this coming weekend but it’s only now, with a couple of days to go, that I have got my arse into gear to ensure I am ready to go come Saturday afternoon.

Admittedly I don’t have a lot to prepare for a new SPL season as the only betting interest I have is my SPL Simplex system but if I am prepping that for the coming season then I might as well go the whole hog and sort out the rest of the Simplex systems in my portfolio at the same time. That means making sure I have the right spreadsheets in place to make it easy to identify the bets as they occur and also to keep track of stakes throughout the season. And talking of stakes, I need to confirm I have the appropriate staking levels set as I can’t really change the value of each point during the season due to the way the staking plan works. I need to set that before the season starts and stick with it throughout the campaign.

I have a staking progression plan in mind with each of the Simplex systems taking another step up the staking ladder each season, the value of each point increasing each time. This allows me to build confidence in the systems while the stakes are low so by the time the stakes get serious I have experienced the highs and lows the system has to offer and am more prepared. This method also takes advantage of the organic growth that I am so fond of. Right now I want to check that each system has a suitable bank for the next staking level without the need for further leveraging (there is more on leveraging to come, I wrote up more of my thoughts on it recently but I am aware that I have owed you this post for some time now and worry that it may be overhyped) and also what sort of maximum stake I could be opening myself up for.

Last season things got scary on the Prem Simplex system. Wolves went on an extended run that saw the stakes on them reach nearly 5000pts. I don’t care what value you assign to a point, when the stakes get up that high things get worrying. Fortunately stakes that high are not the norm but they still occur every few years it seems. With that in mind I am cautious about stepping the value of one point up too high. While most stakes will be nowhere near those levels, in the tens or perhaps hundreds of points at most, I could do without the stress that would inevitably come with stakes like I had on Wolves.

When Wolves were on that scary run I looked at some of the maths involved. I have since thought more about the maths behind such runs and have some new figures to bring to the party. What I really needed to know then was how long I could expect a losing run to go on for as that will tell me how high the stakes are likely to get. Fortunately it’s a relatively easy calculation so I will be looking at that for all three systems.

While I have the systems up on the ramps, as it were, I will also be giving them a quick once-over to ensure that the variables they use are all correctly optimised. This is all ‘under the hood’ stuff really but it’s worthwhile giving it a quick check to make sure it’s not likely to blow up a few months down the line.

Losing Runs
I’m not going to discuss the calculation used here in any detail. There’s no need, all that matters is the result really. I will give the equation used but I won’t be going into how it is derived or why it is as it is. The equation is:

expected longest losing run = ln(num matches) / -ln(1 – strike rate)

That ln() business is the natural logarithm of the quantity in brackets. You don’t need to understand it to use it as most scientific calculators can work it out for you as can programs like Excel but in case you do want to know more you should probably read this. When using that formula above you want your strike rate as a decimal value rather than a percentage, so 0.5 instead of 50% and so on. Note also that the result won’t necessarily be an integer value so you may wish to round it. After all, a losing run of 13.46 bets is pretty nonsensical isn’t it? How can 0.46 of a bet be a loser? Personally I always round up, so 13.46 would become 14, rather than using the traditional rounding methods but you can do whatever suits you.

There are two important parameters used in the losing runs calculation: the number of matches played and the strike rate, i.e. the number of matches that ended with the desired result. There are several ways in which one can obtain the number of matches and strike rate depending on what data sample one uses. For example, should I use the data from my own betting records? That will give me a larger sample for the Premiership than for the SPL and Serie A as I have been betting on that division longer. I only have one season’s worth of Serie A data so calculations based on that sample may not be terribly accurate. Should I therefore use the full set of matches from the last few seasons? If so, how many seasons? It would be interesting to see how the expected longest losing run varies in length depending on the number of seasons included in the calculation. With all that in mind I have decided to examine my own records along with full records from the last 10 seasons, 5 seasons, 3 seasons and last season plus limited data sets including only those matches that meet my Simplex criteria for the same timeframes.

Premiership
I had wanted to display a table of values here showing the sample sizes and strike rates used in the calculations but I tend to have a few problems with tables in my blogs so after playing around a bit with the HTML for tables I have given up and gone for plain text instead. It’s not as clear but it serves a purpose.

My record contains just under 500 bets with a strike rate of 27.91% (0.2791) resulting in an expected longest losing run (ELLR) of 19. The figures for the  full 10 season sample produce an ELLR of 28 and from there the value decreases as the size of the sample also decreases. The calculation gives an ELLR of 25 for the past five seasons, 23 for the last three seasons and 18 for last season only. The values are identical when the data set is limited to the Simplex matches only, with the exception of last season’s value which comes out at 16.

These values fit pretty well with my previous analysis which indicated a run of 19 games without a draw is possible but that it is unlikely to go much higher. Sure, the ELLRs from the multi-season samples are higher, being in the twenties, but note also the trend for the ELLR to decrease as only more recent seasons are included. The number of draws seems to be increasing with each season which in turn brings down the size of the expected longest losing run (run without a draw). Including only those matches that meet the Simplex criteria doesn’t change things much. Based on last season I could expect a losing run of 16 and no longer but this is somewhat optimistic as I have already seen longer losing runs than that. I think working on a figure of 19 to 20 seems like the most sensible approach.

SPL
Using my own record of nearly 200 bets and a strike rate of 25.39% I get an expected longest losing run of 18, one less than the Premiership equivalent. Substituting in the figures for the past 10 seasons produces an expected longest losing run of 30 while the figure is 26 for the past five years and 23 for both the last three years and last season on its own. Limiting the data sample to the Simplex matches only leaves the 10-year value unchanged by increases the remainder by two.

I’ll be honest, these figures are bigger than I expected. There was a run of 25 matches without the desired result for one team back in 2003-04 and a couple of years before that one side went on a run of 22 games without one ending all-square but looking at the data these seem like aberrations rather than the norm. However, the sums say I should be prepared for a  possible repeat performance so something in the 20-22 range is probably a sensible figure to take forward.

Serie A
I only have one season’s worth of Serie A bets in my spreadsheets but despite that the sample size is almost the same as the SPL sample despite the latter covering two seasons. Funny how these things happen at times isn’t it? Anyway, that sample gives an ELLR value of 18 which, as with previous divisions, is lower than the values calculated from larger samples. For the samples including all matches the 10-year figure comes out at 25, the five- and three-year figures are both 24 while last season produces an ELLR of 21. Unfortunately my Simplex spreadsheets don’t go back far enough to allow a 10-year Simplex-only calculation but the five-year ELLR is 23, it’s 25 for the last three seasons and 19 for last season. Note that in this last case the general trend of decreasing ELLR figures as fewer seasons are used is bucked. The three-year Simplex-only ELLR figure is greater than the five-year equivalent due to a dip in the number of draws in recent seasons. It remains to be seen whether this trend continues long-term but last season was right back on track so it may have been a temporary blip.

My spreadsheets for this system don’t go back as far as the Premiership and SPL versions but they are still very useful. They show that in 2005-06 there was a run of 20 games without the desired result so, bearing that in mind along with the calculated values above it seems an ELLR of 20 to 22 is appropriate here too.

Staking
What does any of this mean? Why do I need to know the length of the likely longest losing run? The reason is the staking behind these Simplex-style systems. There is an element of loss-chasing although I should emphasise that it is controlled and not the terrible idea that most seem to think it is. Well, it works well under these conditions but that’s not to say I would consider loss-chasing staking plans for other systems. But because of the way the staking works I need some idea of how long the losing runs can get as that determines how high the stakes can get and with that information I can sensibly decide whether or not each system can take the next step up the staking ladder. Obviously the more I stake the greater the potential returns (all else being equal) so while I am keen to maximise my returns I need to balance this against the risk of overstaking.

The figures I calculated above are very useful when it comes to sorting out my staking but they are all estimates really. The calculations assume that all teams are equally likely to draw and while this is not a strictly valid assumption one has to make a few simplifications when modelling real world situations. They also don’t tell me how often I could expect a losing run of this magnitude but do allow me to ensure my staking doesn’t get out of hand by indicating what sort of max stakes I could reasonably expect to have to put into action. And that’s how I plan to use these figures.

While I haven’t shown any of my workings here I have also given each system an MOT. I have taken each of them apart, checked all the main variables, polished them and put it all back together again. In doing so I was able to use the key variables to calculate the largest stake I should expect for each system based on the ELLRs above. It transpires that I should allow for stakes to reach around 8000pts for the Prem Simplex system, something close to 1200pts for the SPL and when betting on Serie A matches I should be prepared for my stakes to reach figures of around 3500pts.

They are all non-trivial sums whatever value I set for each point but at least I know now what to expect if (when) the worst-case scenarios come into play. The question now then is knowing those figures am I prepared to increase the stakes on each system?

The Prem Simplex system is the oldest of the three I currently run and each year I have increased the stakes. Previously I have done so without first calculating how bad things could get but I wasn’t going to make that mistake again after Wolves’ efforts last season. And it’s only that run that’s really got me thinking here. Without that I’d be upping stakes like a shot as the system is showing a ROI in excess of 50% according to my records and is simple to follow. I think making the increase is the right move but I am going to think it over a little more before I decide for certain. After all I have a few weeks until the Premiership starts so for this system there is no real rush.

The same is not true of the SPL system of course. I need to get the stakes for that one nailed in the next day or so. Looking over the various spreadsheets it seems like a safe move to take the next step up the ladder, especially given the expected longest losing run would only require a max stake of 1200pts or thereabouts. I can handle that, yeah. I could be tempted to jump a rung on that staking ladder given the way this system has gone in recent seasons but that may be pushing it. The longer losing runs came a few years back now which could mean that draws are getting more common so losing runs are naturally shorter or it could mean the stage is set for another big losing run. I just don’t know which it is so I’ll play it safe and just take one step up the ladder.

I only have one season of Serie A Simplex under my belt but it was a promising start and I feel that more success is on the cards. Given that this is the youngest of the systems it has the smallest stakes having started last season at on the bottom rung of my staking ladder but this season it looks well set to step up. In the worst case scenario the stakes will be great but still not as scary as last season’s Premiership so I am sure I can cope.

Categories: Football, Reviews

I sometimes wonder why I bother making plans

July 19, 2011 Leave a comment

The last week or so has seen a slight change of plan. Despite what I said I was going to do I haven’t been going all out developing football betting systems. The tool I wrote recently (which still doesn’t have a name) is excellent and I am still very pleased with it but it turns out that using it isn’t as much fun as developing it was. I could go on developing it, sure, as it is by no means a complete and finished product but to what end? It won’t make a commercial offering without a change of platform and a bit of tightening up so it’s only for personal use. So if I am not going to be using the tool on a regular basis should I continue to develop it? It already includes a lot of functionality, enough to set me well down the road of developing robust football systems so in that respect there is no need to develop the tool further. It’s an excellent little tool but it was the programming and development of the tool that really got me excited, not its use.

Y’see, I’ve not really got my system development mojo working at the minute. I can’t seem to find the right mindset as often as I need to and I am wary of trying to force matters. This time last year I was up to my nuts in spreadsheets and was working up several distinct ideas. OK, ultimately that led to a few duff systems but the important thing is that I was right there in the thick of it, getting my hands dirty. This year I just don’t have that same enthusiasm and I worry that trying to press ahead regardless with betting system development is going to lead to a load of old crap. Without the right mindset in place I fear I will make the same sort of mistakes as last year and turn out more pap.

What’s more time is now a major consideration. There are less than four weeks until the start of the Premiership football season while the Football League kicks off a week earlier. That’s all pretty scary! While three or four weeks may sound like a long time I don’t think it is. Not if I am to do a proper job here. In terms of actual effort, building a successful football betting system isn’t that hard but I like to spread the development out over a reasonable period so as to give my brain time to mull things over and make sure I have identified all the possible pitfalls and so on. And then there’s the ‘going forward’ aspect of the system – how am I going to obtain the qualifiers each week and what spreadsheets etc do I need to support that? In short, if I haven’t made serious inroads into the data by now then it’s unlikely I will have much to offer come the start of the season. Needless to say I haven’t made any great progress yet so don’t expect too much from me in August. I have a couple of ideas at present and I will look to work those up in the next couple of weeks but I am not confident they will lead to much. It might be enough to keep the Soccer Systems blog up and running but not much more. It will certainly be a drastically reduced offering compared to last season.

Last summer, for me, was all about spreadsheets and football system development but this summer the focus is changing to bring in more long-term projects. These are ideas that have little or no short-term pay-off but have potentially excellent long-term prospects, and I feel it is important I at least investigate some of this potential. With these projects taking up a lot of my time I don’t have the time to really worry about my own betting systems so I am turning back to tipsters to fill a gap. I’d rather pay someone else to come up with the selections rather  spend my time doing so as I honestly feel there are better uses on my time, at least in terms of long-term prospects. It may not work out entirely as I plan (what does?) but I trust my instincts and they tell me that this is the right path to follow at this time.

In addition to all that the start of the 2011/12 season is going to be a tough one for me. I’m due to go back into hospital mid-August for surgery and to be quite frank that is my major focus rather than anything to do with football really. It does mean that I am unlikely to have many of my own systems running this coming season as I simply can’t focus on their development when I have major surgery on the horizon but that’s understandable isn’t it? Anyway, so what if I miss (or more or less miss) a season. There are still plenty more to come and perhaps having less on the go this time round will allow me to come back with a stronger offering for 2012/13.

Categories: Football

Now the real work can begin

July 11, 2011 1 comment

I think I have finally got to the point where the football system development software I have been writing includes all the main features and functions it needs to be of any real use. In other words I am just about at the point where development of the tool can stop and I can actually start to use it in anger. I’m not quite at that stage just yet as there are one or two minor workflow issues to resolve, such as disabling certain features/buttons until the previous steps of the workflow have been executed to provide the necessary data but these are minor finishing touches really.

I must admit that I am pretty pleased with what I have done. It’s not rocket science and certainly isn’t the most advanced piece of software I have ever written but it looks like it will serve exactly the purpose for which it is intended, namely the development of ratings-based football betting systems. To simplify things at this stage I have chosen to only allow systems to be developed around Rateform ratings but I plan to extend this in the future. For those of you not familiar with the Rateform rating method it’s one that takes into account the strength of the opposition faced so teams are rewarded more heavily for getting results against higher-ranked teams than against more lowly opposition. There is a decent summary of the Rateform ratings here if you want to know a bit more. The authors of that article rightly identify the home and away contributions to the kitty as variables meaning one could change the ratings by fiddling with those percentages. I have gone on to identify further variables for the actual ratings method plus a significant number of further variables related to testing said ratings so even though the Rateform ratings are fairly basic and have been around so long as to have most of the value sucked out of them I can use them in a number of more complex ways to construct profitable betting systems.

As I said above I am quite pleased with how this software has turned out. I’d be very pleased if only I could think of a suitable title/name for it so it doesn’t need to go under its nondescript working title any longer. And I’d be utterly delighted if I could simply port what I have done out of Excel and into a standalone application that I could then use to form the basis of a commercial offering but I think that’s perhaps taking it a bit far at this stage. Still, it seems as though this software will suit my own needs quite nicely. I can generate and test ratings in several different ways just by clicking a couple of buttons and as a result I get a wealth of stats I can examine. I love numbers, me. That’s why I added a couple of new statistical routines at the back end of last week so that for each potential system I can look at the key stats such as number of bets, strike rate, profit, ROI etc but at a glance I can also see things like longest losing/winning runs, expected longest losing/winning runs (based on the number of bets and strike rate), profit high/lows and so on. As well as the raw figures I automatically get graphical representations of what these numbers mean. I also get full breakdowns of the various stats so I can look at ways in which the system can be tweaked to provide a better return (with the lessons from last season constantly ringing in my ears to stop me backfitting the data).

I think I have everything I need at this stage to give me a real leg up in my system development. That’s not to say the software is perfect (how can anything without a proper name be perfect?) and I have identified a number of future enhancements but I think the time is right to draw a line under the development of this version and to actually put the tool to proper use. It’s time to start playing about with some numbers and investigating a few ideas I have had over the past few weeks to see what comes out of it all.

Categories: Football

Work, work, work

July 4, 2011 Leave a comment

Things have been quiet around here as I have been working hard for the past week and a bit on a few football system development projects, or at least I have been doing a fair amount of prep work for a serious assault on that front over the next few weeks. Last season I made a few fundamental system development mistakes and I am obviously keen to avoid making the same mistakes this year. To that end I am trying to put a proper structure in place to guide this latest round of development so I can’t make the same mistakes as previously. Part of that has involved me writing some software to help me along the way. I have decided, initially at least, to focus on ratings-based systems this time round so I have been writing some software that will generate and test ratings.

I am currently playing with pretty simple ratings but even so I have identified dozens of variables that go to make up the rating generation and testing. I figured software would help  me control those variables so I can work through them methodically investigating the effects of changing each of them individually. A computer program requires strict rules so by writing some suitable software I can implement a rigid structure that will hopefully prevent me from repeating previous mistakes during the system development phase.

The software I am working on at present is being written in VBA for Excel and one day I will stop using Excel as the default basis for any new tools I want to write. It feels like I should be writing standalone applications not ones contained within a file for another application. But Excel gives you so much IO for free that it’s always tempting to use it. The spreadsheet layout is a godsend for taking data in and displaying data to the user. Writing Excel-based applications kinda feels like riding a bike with stabilisers on but why go through the hassle of writing all the IO routines, which wouldn’t look as nice as Excel IO does,  when I can just use Excel? It’s for my own personal use anyway so who cares whether I have ‘cheated’ and used Excel to help with data display? There is that part of my brain though that accuses me of wimping out by relying on Excel’s IO, the part of my brain that is goading me to take the stabilisers off to see what happens. The thing is I know what will happen – I’ll pootle along very slowly at first, getting frustrated, so I will attempt to speed up and come flying off this metaphorical bike causing myself painful metaphorical injuries. Then that part of my brain that goaded me into it will go “ah, so that’s what happens. Right.” And that’s why I’ll stick with Excel-based software for now.

While we’re on the subject of my mental faculties, this software is taking longer to develop than ‘normal’ because of the way my brain works, or rather doesn’t. I can’t seem to penetrate a sort of fog that would allow me to plan ahead and structure code accordingly. Instead I have been developing incrementally, iteratively. Each little new feature I add unlocks a bit more of my thinking and I can project slightly forward to see how that helps and how more functionality can be built on that to improve the final product. Inevitably that means rewriting some of the code I have just written – if only I could project my thinking far enough forward so that I could plan out all the potential functionality and could then code everything once rather than writing and rewriting several times in order to support all the functions. But that’s not how my brain works. It’s been like this for ages though so it’s not something new. Perhaps this is why I moved from software development to software testing. It’s also a good job I am not working to a deadline.

But once this software (it really needs a name but I just haven’t come up with a suitable title yet)  is up and running  I hope it will allow me to develop a few decent football systems that I can add to my portfolio as I could do with more football systems in there. At the minute I only have four football systems in there and three of those are Simplex systems that don’t run for the full season. That leaves me quite light on the football front compared to other sports such as horse racing. I’m not sure yet whether any systems I add to my portfolio will also run on the Soccer Systems blog or not; I may opt to trial other systems that way but we’ll see how it goes in the coming weeks before I make any decisions on that front. I need to complete this software first anyway.

All of this means teaching myself various web development skills has had to be put on hold. I started to teach myself some web basics – some of which was really just a refresher – but I got distracted after deciding to take a quick look at some football data to get some rough ideas of what avenues I wanted to explore for the coming season. One thing led to another and I haven’t been back to the web development books yet. I will go back though, definitely, it just might not be for another week or two.

In other news, not much really. It’s a few days late for various reasons but this morning I completed by monthly review for June. In the end, even though I finished well short of my target profit yet again I feel I dodged a bit of a bullet as I did at least manage to record a profit, something that looked nigh on impossible after Black Saturday. My little whinge can’t have affected results in any way but it made me feel a bit better and have a positive attitude certainly helps in this game.

Categories: Daily Chatter, Football

Letting off steam

June 25, 2011 2 comments

For the first time in months I have started to think again about rejoining the nine-to-five world. It’s been a tough month so far and time is running out to turn it around. June started well and for the first 10 days or so I was riding high but things have tailed off somewhat since then. For example, it’s been another poor month on the Lay’ems, which as my biggest lay bank has quite an influence on my overall results. Not that anything has gone wrong with that system as such. The strike rate of 81 winners from 94 bets before today is pretty much spot on. The average odds of this month’s winning horses (losing bets) are 7.37 compared to an overall average of 6.80 but as we’re dealing with a small sample I won’t read too much into those figures. It seems like it’s just one of those months and it’s unfortunate that it comes immediately after a poor May for the Lay’ems too.

But these things happen. I know they happen and what’s more I know I can’t do a great deal about them but every now and then they can grind you down a bit. I will conduct a full monthly review at the start of July but I needed to let off a little steam before then. I know it is somewhat artificial to look at things month by month rather than taking a truly long-term view but I have to have some idea of how I am progressing so I have to take stock at certain points and month-ends are as good a time as any.

At the minute it feels like things aren’t quite going to plan and my portfolio isn’t generating the required profits at this stage. At times like this I think about adding new low-cost services and systems to help smooth the returns out somewhat and add a bit more balance. I have eliminated a number of systems and services from my portfolio in the last few months, for various reasons, and I haven’t replaced them all. I am currently trialling three new potential candidates: a horse racing backing service, a horse racing lay service and a dog racing lay system, although trials for the latter take up quite a bit of effort so that’s one on the back burner mostly. It remains to be seen whether any of them make the cut but by trialling a few new services I at least feel like I am making a conscious effort to find ways in which I can improve my bottom line. I am also looking at developing football systems as well as teaching myself certain web development skills to open up new potential revenue streams. I don’t want anyone to say that I am not trying.

Alternatively I could look to press certain edges within my portfolio further by raising stakes for some services but I’m not sure I am currently mentally prepared for the big losing days that will result. I am already leveraged pretty heavily (which reminds me, I still owe you my thoughts on leveraging, I must get round to that) and I don’t really want to crank that up any further and increase pressure on myself to succeed. It’s tricky striking a balance between looking to increase the stakes on some services to take advantage of their edge and also spreading the risk by having a suitable portfolio. On one hand I want to consolidate around my current portfolio and make the most of the edges those systems/services have but when the going gets tough my instinct is to dilute that portfolio with some new blood. At times I really don’t know what the right course of action is.

Ultimately though I am not fit to go back to work. I don’t have much energy at all these days. I feel flat, rundown and generally lousy. Consequently I struggle to concentrate for more than a few minutes at a time. Were I gainfully employed I would be phoning in sick most days, I feel that crappy. And it’s a bit of a downward spiral too. When I feel rough and barely have any energy to do anything it gets a bit depressing and even mild depression can accentuate the symptoms. I saw my consultant the other day and told him I feel 84 rather than 34. He assured me that in a few months I will feel like I am 24. I bloody hope so but until such time as a surgeon finally removes this tumour and I get off these drugs and get my life back rejoining the real world of work isn’t an option. Still, if I have to go back to work I currently have a portfolio that would fit into most lunch times, assuming I drop back into the flexible working environments I am used to. At least then I could gamble on a part-time basis and months such as this one would bother me less as at least I’d have a guaranteed wage coming in.

Categories: Daily Chatter

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.

Categories: General, Philosophy