Sunday, 6 January 2013

Quick piece of analysis

Hopefully everyone following the systems took a little bit of time to read the last post. I’ve had a few comments back from subscribers and on the whole, it has been very positive. I think people are able to separately their own portfolio performance so far this season away from the performance of the systems and the underlying ratings and I think that’s the right thing to do.

I suspect due to the fact the established systems are having a tough season to date, many subscribers aren’t achieving the levels of profit they’d hoped they would have achieved so far this season. However, as I said at the start of the season, every subscriber is responsible for their own profitability this season and ultimately, depending on what systems we choose to follow, that dictates where our P&L would end up.

People external to the service will look at the proofed results and see it has been a tough season as the service is basically breaking even this season. I think this is fair as in the first two seasons, the proofed results were better than following all systems, so I can’t have it both ways. This season, following all systems is better than following the established combined systems.

A few people contacted me after the last post to tell me to keep the chin up and that they are having a decent season from following multiple systems. It’s nice to hear this as all I’ve heard most of the season is from disgruntled subscribers who are following system 7-22 or 7-22 to 8-22 and are having a tough time of it this season. 

The subscribers having a tough time of it from email correspondence are those following the bets using AHs. This season, the best bets haven’t been winning, the Homes have been shockingly bad, the weaker bets at bigger odds have been holding up the P&L but if using AH bets, you are losing money on the Homes, you are losing money on the best bet aways and on the teams that are winning, you asking for a big handicap and thus, nullifying any edge you have! I dread to think how bad the results have been this season for those following AH bets only.

Again though, those who chose this path did so from their own choice and therefore, they are responsible for their P&L. I know someone has written to me asking for advice and whether I think it was a really bad idea to follow AH bets but being honest, before this season, you could have did anything you wanted and made a profit. I said as much as this in the Summer. However, AH bets really erode a large part of your edge and if there isn’t much of an edge there (as has been the case this season with the established systems), that break-even result will seem a long way away if using AH betting!

At the end of the day, I probably need to face up to the fact that this season, for the first time in 3 seasons, not every subscriber will make a decent profit from following the service. I know it’s not ideal and ultimately, it will no doubt impact on the propensity of these people to resubscribe next season if they have had a bad experience this season but that’s the way it goes at this game.

Anyway, the reason for this post was to do a quick piece of analysis. Two people contacted me to ask me what the P&L would have been for the UK bets and Euro bets this season if simply following every team that appeared, regardless of which system it appeared on and regardless of how many times it appeared on systems.  This analysis is based on results to the end 2012.

I’ve looked at this before on the blog a few times at points in time.  What I tend to find is that the returns aren’t as good as following a single algorithm on its own. So, for example, I would expect 6,21,31 and 41 to beat the returns from this method n the long-term. This has happened the last few times I’ve looked at this (couldn’t find the blog posts but I have looked at this in each of the last two seasons for sure).

Anyway, here are the results for the UK systems this season.

What this shows is the results for each algorithm (6,21,31 and 41) and then underneath, it shows the results if simply putting 1pt on every team that appears on any of these 4 systems.

As you can see, the results from backing each team  when it appears only returns an ROI of 4.5% from 553 bets. This doesn’t compare too favourably with system 21 or 41 but isn’t too far behind system 31. The only algorithm that this method beats is algorithm one (system 6).

What I would say is that if you can generate a 4.5% return from just backing every team that appears, then this isn’t too bad. I’ve said before on the blog that if each algorithm can achieve a return of between 3%-5% each season, I’d be happy. Only system 6 is below that so far this season and over the first two seasons, every algorithm has achieved this target, so there is every chance that this will be achieved again this season for the UK systems.

Now onto the Euro systems….

Here are the results:

Backing every team that appears this season generates a profit of 9.6% from 219 bets. This is very good I think. However, when you look at each algorithm and the fact they have profits of 13.7% and 12.2% this season, you have to think it is better to simply follow an algorithm in isolation rather than follow every bet that appears.

This is probably the crux of this analysis. For the UK systems, 3 of the single algorithms are doing better than simply following every bet that appears and for the Euro systems, both algorithms are doing better than following every bet that appears.  Therefore, I don’t believe following every bet that appears is a method that can improve your profitability using my systems. You are better following a single system but then again, long-term, combined systems beat single systems, so all in all, not sure there is too much wrong with what most of us are doing at the moment!

Hopefully this answers the question both subscribers had.  If not, just get in touch with me again via email.

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