Tuesday, 26 July 2011

How does this sound?

One thing that I have been doing a lot of in the last few weeks or so is running different scenarios for a few people for next season. People are trying to build portfolios using my systems for next season and due to the fact I'm a pretty good analyst (self praise is no praise!), then I've been trying to help out where I can.

Clearly, this is a bit of an issue with the way the current systems are set up to work. Only I have access to all my historical results data and therefore, people need to rely on me to run scenarios for them and to try to understand how certain systems may work in a portfolio or not.

If I wind the clock back a little, I saw this football project as a 3 year project at the outset. The first year was about building ratings and systems that work. The second year was about consolidating what I'd done and building some more ratings/systems that work and the 3rd year was going to be about looking at ways to try to maximise profits from the systems for everyone.

I think I'm well into the 2nd year now (I started out in Jan-10) and therefore, I think I'm pretty much done with tweaking ratings and building new systems. Assuming next season went well and all my systems performed as I'd like them too, I'd have 20 unique systems to go forward with from the end of the season. 11 systems would have two season's of proofed results and 9 systems would have a season's proofed results.

The next question then would be, how do we use these systems and how do people build their own portfolios to suit their own risk aversion using these systems?

I'm the sort of person that always has ideas floating around their mind and you won't be surprised to hear I'm already thinking about how this would work. Of course, I'm not going to even contemplate looking at this until the end of next season as I don't want to get too far ahead of the game. At the moment, I only have 11 systems proven over one season. It's a big leap to assume that these will all perform as I expect next season and that I won't hit a problem or two along the way.

If we can just imagine that next season goes really well though, then what is the next logical step for this project?

Well, it has to be to find a way to allow people to build their own portfolios using these systems. I'm sort of seeing it already but people could have a drop down box of all the systems and they can pick what systems they want to follow. They can then pick whether they want to follow H/A or DNB for the system and of course, they could decide to back homes outright and cover the draw for away teams. They can then select their stakes for Homes and Aways and ss if by magic, the results would appear which would show the individual the portfolio performance over time, the returns achieved by month,season,league etc. It would also show KPIs such as longest losing run, largest drawdown and then calculate a betting bank based on how safe the person wants to be.

This would allow people to sit and compare lots of different portfolio's until they get a portfolio that suits their needs.

Even when I think about this now, it sounds great and it's the sort of thing that I can really see helping people make informed decisions around which systems to follow and how to best maximise their profits.

Anyway, I thought I'd just throw this out there as an idea of where this venture could be going in a season's time. Allowing everyone to choose a portfolio that they'd like to follow. I'm sure I'll continue to keep tweaking existing systems and probably developing more systems as time progresses but I think the next big leap has to involve helping others use these systems to maximise their own returns.

Sound like a good idea?


  1. Just bear in mind that once a profitable system gets wide enough coverage that people start to use it regularly, the value will disappear from the markets - you might notice this next season as the ROI starts to erode until returns are back in equilibrium.

    This is why back-fitted systems often fail going forward: by simply discovering the system and betting on it, you're changing the market. If your stakes are small enough that the liquidity is only marginally effected, you'll be OK. It doesn't take much of a wager - even on Betfair - for a market to "alter" to the change in liquidity, and therefore you'll see value disappearing.

    I hope I'm wrong in this case, and you can carry on. What I'd say though is giving people to the raw technique is likely to reduce in a significant loss in ROI for everybody involved.

    Successful systems builders shouldn't sell their systems: they should use them. That's my advice.

    Good luck.

  2. Hi Paul.

    Thanks for your comment.

    I would give it a proper reply in a post but I feel like I'm diluting the value of my posts by having so many of them lately, so I'll keep things in the comments box for the moment.

    Firstly, the purpose of me developing systems is so I can make money from betting. It's only really a hobby although I do take the betting side of things quite seriously. I don't talk too much on the blog about my personal betting as it's not the purpose of me being here. However, so you can get an idea, I was staking an average of £2.5k last season on each weekend. Obviously, midweek was generally less but I reckon £3.5k-£4k was my average outlay on these systems last season on an average week. I'd class myself as a small time punter.

    Due to the fact that the spread of bets was so large across the piece, I managed (without much difficultly if I'm honest) to place average bets of between £20-£300 on each team with individual bookmakers. I would often split stakes etc. where my full bet was not accepted but in the main, it wasn't too bad. I only used a handful of bookmakers in the main although I have accounts for some others that I have used.

    I don't see an issue with me doing this next season either Paul. Obviously, you could say that I should just keep all these bets to myself but at the end of the day, once I've placed my bets, I don't really have an issue with sharing them with others. My bets won't move the market (might move the standout price of 7/2 with Ladbrokes etc.) but the generally available 10/3 will still be available with all the leading bookmakers.

    Quite often last season, I'd look at Betfair for some of my Premiership games and there would be £1k+ waiting to be laid at the price I perceived to be value. Hence, me placing £300 with a bookmaker isn't going to cause ripples in the betting market! However, the other guys who follow these bets with me will be taking away all the liquidity at value prices.

    As you say, as more and more people follow these bets, the market will adjust as the bets are placed and the odds will reduce and the ROI will decrease until such a time, the edge will be gone and anyone following at lower odds will make a loss. I know that and that's why I'll always quote the odds I took when showing my bets on the blog.

    Part 2 to follow

  3. In terms of allowing people choose which systems to follow, this isn't giving people raw techniques. It's giving them a way to decide which bets from the 200 bets I post up each week are the best ones for them to follow but I'm not showing them how to find the 200 bets themselves.

    Everyone has their own view on what you should do with systems after you've placed your own bets. I personally don't mind sharing my picks on the blog or giving them to others. Whether the bets will still be value at that point in time will depend on how different they are to the odds I input into the ratings algorithm. On a game by game basis, I know for sure they all won't be but I don't imagine for a second that the market will agree with every one of my selections. I'm sure a good number are available at kick-off at higher prices than I suggest for example.

    Anyway, I hope that makes sense. This blog is just an aside to my own punting on the footie. If you think I do all of this to sell my bets for a tiny fee, then you clearly don't know the time I need to put into this to make it happen!


  4. Following on from Paul's observation Graeme,why don't you simply increase stakes next season to ensure your return is in line with the time it takes you to do this?

    Basic maths says that if you stake 5-6 times what you staked last season,you'll make 5-6 times more than what you won last season.This seems a much better strategy rather than allowing others to use your systems and bets and possibly diminish your edge over time.

    Once you build up your bank,you'll be playing 15-20 times the stakes in a few years time.

    Great reading,as always.


  5. "Sound like a good idea?"

    Err, yes... :)


    PS. Still looking at everything to finalise the plan of attack for the season coming. Up to now, I think I've been guilty of simply looking at each system and picking one that best suits my needs. What I need to start doing is breaking this down a bit, as you suggest, into other factors. I may come back to simply following one or two of the systems, but let's see.

    More food for thought, but I've quite an appetite!

  6. Hi Ian.

    Not sure where to start really with my reply. There are two key phrases in my reply to Paul that I can point to. One is the fact that I see this as a hobby and the other is the fact I was staking on average around £4k a week last season.

    Putting your idea into the mixing pot, you've got me staking £25K a week, £100k a month and maybe £1M a season on the football.

    For someone who does this for a bit of fun and a hobby, staking £1M a season does appear to leave somewhat cold. Actually, considering I'm not really a fan of gambling, the thought of turning over £1M a season would lead me to think I shouldn't be playing this game!

    In one month last year, I lost around £5k, That could be £30k under your suggested staking plan.

    I'm playing with a fairly liquid bank of £6k or thereabouts. I say liquid as I can top up but to get to £30k, you'd have me mortgaging my house to place my bets in a weekend.

    I don't even want to get involved in discussions around how I'd get the bets on and at what average odds and basically, I'm just going to stop this conversation here!

    Let's just say I won't be following your advice.


    PS. Playing 20 times my stakes has me staking about £4M a season and nearly £100k a week. Do you think I play footie for Man Utd and sleep with prostitutes in my spare time Ian?

  7. Hi Rowan.

    I'll be in touch soon with some thoughts for you!