Monday, March 8, 2010

Sunday's games gave the 7-dog trial a much-needed boost, and to celebrate, I'm making Monday a day of rest!

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For a betting man, the time it is taking the 5x rules set in the 7-dog trial to turn around - next week it will be two months since it peaked at a profit of $6,000 - is unacceptable.

For an investor concerned only with long-term performance and unfazed by short-term ups and downs, it may (or may not) be less of a worry.

When Sunday's finals were all in, the 5x column was a little over 8 units ($812) in the red after four months of ups and downs, and facing a new round of bets totaling $3,000.

For the 50x rules set, which allows a maximum bet of $5,000 rather than $500, the story was far different: up $45,000 or +10% of total action, and well on the way to revisiting the best win of $60,000 achieved on February 10.

Regular readers know well that I have always advocated a very wide betting spread to offset the long-term damage that is always certain to be inflicted by negative expectation.

A 1 to 50 spread is totally inadequate against even the most "player friendly" casino table games (blackjack at about -1.0% and baccarat at about -1.35%) but when I started out on this diversion into sports book betting, I was intrigued by the possibility that paybacks exceeding 50-50 (+100 in bookie lingo) might make a much tighter spread viable.

To the average punter, 1 to 5 is a wide spread, I know. A few minutes of observation at a blackjack or baccarat layout in any casino will confirm that.

But mathematically, 1 to 5 has little or no effect on what folks who think they know all about numbers like to call standard deviation.

When the 7-dog trial began on November 1 last year, I deliberately set the permitted spread at $100 to $500 so that readers of this blog could watch with me in "real time" how backing underdogs would fare at a relatively modest betting level.

I then set up the tracking spreadsheet to include a 50x "shadow" block of formulas that allowed a what if set of variables to be put to work at will.

Right now, the 50x approach has delivered a win that is 75% of the profit zenith achieved on February 10 ($45,000 vs. $60,000).

Does that mean that spreading 1 to 100 would do a better job?

No, it doesn't.

At 1 to 100, the win drops to $30,500 or 3.5% of overall action, vs. $45,000 and 6.3%.

(I should at this point confess to falling victim to the annoying tendency of spreadsheets to magnify minor errors into monumental mess-ups! Earlier in this post, I reported the current 50x win as 10% of action to date. Wrong. I had failed to extend the formulas that track day-to-day action beyond February 8, an irritating slip that was entirely my fault. Error checks are an essential part of my daily routine, and usually, I triple-check everything before I show my work to others, something that is not so easy to do in a goldfish bowl. All I can do now is to admit to the slip-up and apologize for it).

The numbers perk up very dramatically at 1 to 250, with the alternate rules set at an all-time high of $56,500 (+5.5%) with Sunday's bets collected. The Feb 10 win becomes $55,400 and the slump that follows it ends on March 5 with a new best of +$56,000.

Do all of these data actually mean anything, or have anything to tell us about what will happen if we keep on backing underdogs until the end of time?

The mythematicians who warn us away from gambling with the axiom that any amount bet against a negative expectation must eventually have a negative result obviously say NO! loud and clear.

They bolster their pessimism by insisting that gambling is unique in all the universe of human endeavors, in that yesterday has nothing whatever to teach us about how we should deal with today and tomorrow.

They are of course entitled to their opinion. And they are wrong.

Luckily for them, they are on the right side of a Catch 22 conundrum: Once the future arrives, it becomes the past in a moment briefer than an eye blink, and they can shelter behind their claim that the past doesn't prove anything.

It is therefore theoretically impossible to devise a strategy for any human activity that guarantees future success by analyzing the past.

This caveat applies equally to everything we do, and is never less than fatuous.

Sorry folks, but all knowledge is by definition the sum of the past.

All that we do in our daily lives boils down to dealing with the present by acting on the basis of what the past has taught us.

The good news is that the present only very rarely deviates dramatically from the past, earthquakes, tsunamis and all manner of natural and man-made disasters included.

The more things change, the more they stay the same. Thank goodness.

Here's where the 7-dog trial stands right now:-





Tuesday, March 9 at 12:50pm:

Mythematicians (descended from the nattering nay-bobs of negativism of the Nixon era, no doubt!) like to argue that past profits from a given betting strategy are "anecdotal" and ergo irrelevant.

That of course rules out all but bets that have yet to be placed, games that are yet to be played and races that have yet to be run...and even they will be disqualified once the future becomes the present and, a nanosecond later, the past.

Since my pal Peter Punter first turned me on to them, I have been watching the three "sports funds" touted by InvestaPick pretty closely, and applying the target betting rules to their results each time they are updated online.

As of finals yesterday, IP was claiming a profit of $2,150 for its "C" or central time zone fund, or a 86% return on an investment of $2,500 on January 1, 2009.

Target betting against the same set of outcomes was ahead $5,180, using $32.50 as the base bet and a 1 to 100 spread.

IP's win for its "E" (eastern) fund was $832, or a return of 33%, and target betting showed a win of $6,665 against the same outcomes.

The IP "W" (western) fund was up $2,880 by Monday's close of play, or +115% over 14 and a bit months.

The target betting win was $4,595 against the same "W" outcomes.

Target betting required about twice IP's overall action and at one point was $1,145 in the hole vs. IP's $40. That translates to added exposure offset by a dramatically fatter bottom line overall.

What it comes down to as I type this is a $6,000 profit for InvestaPick's $2,500 x3 investor, earning him or her roughly 80% over 14 months. Beat that, Wall Street!

Target betting's bet by bet stalking of the IP "investment portfolio" is purely theoretical but precisely calculated. To date, it woulda brought in about $16,000 profits from an investment of 3x $5,000, or 107% since January 1, 2009.

There are some anomalies in IP's betting pattern that I can't explain without advance notice of daily picks, but on the whole the InvestaPick strategy seems sound and credibly transparent.

Target betting is just more effective, is all...

We have skin in the game(s) again today after taking Monday off. Beats me how odds can suddenly shoot off the charts like a seismograph in Chile one day and drop back the next, but that's how it is sometimes.

Here's new data:





An important reminder: The only person likely to make money out of this blog is you, Dear Reader. There's nothing to buy, ever, and your soul is safe (from me, at least). Test my ideas and use them or don't. It's up to you.
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