If you lined up all the tipsters and pundits on a major horse race you would…… still not get a clear opinion.
When I listen to, or get a tip I often feel a lot of them are wrong, ill-informed and they always miss off the most vital piece of information that you need if you’re going to make money when betting.
So what should you look out for when looking for a good bet?
Black and white: the tipsters approach
When you’re looking at betting – whether you’re looking at a variety of different sports or whatever event you’d like, whether it is the royal baby name, politics; you can pretty much bet on everything nowadays! However, there’s one defining characteristic that you should be looking at that will determine whether you have a good bet or not…
There is always plenty of advice available, so why not take some of that? You’ve got tipsters coming out of your ears and you’ve got pundits giving you advice on which team they think is going to win or not, but there is one critical thing that is always seems to be missing.
I’ve bet, traded, gambled, but there’s a core that runs through all of my activity that determines whether I profit over the long term. But when I look at tipsters, whether they’re racing tipsters, football tipsters or just any type of tipster I always see this one piece of information missing – you never see it.
This is why I think tipping is completely wrong. It’s gone way off of where it needs to be, but we can look at this and say, ‘well, actually, you know, it does serve a particular purpose’, however, for who does it give a purpose to?
Let’s say you tune into a football match and they say, ‘right, so who’s going to win then?’ The fact is you can never tell who is actually going to win a sports event!
It’s a graduation of possibilities – from never going to win, to quite likely to win. Odd and strange things can happen, but likewise, the nailed down thing doesn’t necessarily is going to win it. There’s never a black and white answer. But fundamentally it’s the want for a clear yes or no answer that satisfies people.
What you often hear is somebody summarising facts that could conclude in a good pointer towards something. For example, if it’s a horse, they would say ‘well, he ran well last week, I think he’s going to quite like this distance and he hasn’t run for 26 days. So they’re looking good.’
So they’re come to a conclusion: the most common phrase being, ‘With this in mind, I think it’s got a fair chance.’
‘So do you think it’s going to win?’
Generally what tends to happen is that the summariser, the anchor of that particular segment of the program or whatever, will always a question everyone wants to know the answer to, but a question you can never answer with full confidence: ‘Who should I put my money on?’ People tend to go out there after hearing what they want to hear and say:
‘I’ll have a tenner on this. I’ll have a tenner on that. I’ll stick a fiver on there. I’ll have a monkey on the following event, sports, sports person, team, horse…’
The problem is that this is where it all starts to fall down. People are justifying this huge spread of things that will mean that this is more or less likely, which is great, we do need that information to be able to place a profitable bet into the market. However, they are missing lots of critical bits of information.
If we see a team at the top of a football league playing a team at the bottom, are they going to win? Yeah, most likely. But does that represent a good bet?
We don’t know, because we need to know what the price is and we also need to know the chance of that actually occurring. Therefore, there’s one characteristic that underlines everything that you do whenever you place a bet that should be critically important to you.
Now, somebody asked me this question when I was in Dublin when I turned up to do a quick half an hour slot at an event that was taking place. Here somebody did ask me one of the most sensible questions that I’ve been asked for in ages and I gave them the most sensible answer that I could possibly give.
Watch below to see my response:
How to be a smart gambler
Once again it is price that I’m interested in. The funny thing about most betting markets is that punters, your average Joe gambler, just doesn’t ask what the right price is. They just go with their gut and then place a bet based upon whether they think somebody is going to win or not.
You see this is also what a lot of the pundits and the tipsters are feeding off as well. They’re basically saying this is going to win because this can’t win etc. Now the fact is that in this day and age, you know, you can have a bet at reasonable prices at a lot of different places, but you also do have the advantage of being able to back or lay.
So, in fact, your judgement transforms itself nowadays. If somebody says these are the odds that we’re offering you or that the market is offering you on an exchange, you can decide whether you want to back or lay it. It’s perfectly possible for you to look at either of those.
So it’s like the team at the top of the division are playing the team at the bottom and you can back them at 1.05 or very heavy odds on in traditional fractional odds. Does that represent value?
Well, you have to say, well, how often is that going to occur? Because, you know, if this match was played 100 times, how many times with that team go on to win this match? It’s quite possible that in the odd match, it may not happen. For some reason. They get to red cards very quickly within the match, which decimates their team, there’s a serious injury, there’s a fluky goal, and the ref decides bizarrely toward two penalties that shouldn’t have been awarded.
If you look at playing the match 100 hundred times over, some of those things are going to occur, albeit not very often. Out of that comes the price at which it’s worth backing. However, if you listen to the football channels and where people are offering up betting tips, they generally won’t encapsulate that.
How you need to adapt – be smarter then the tipster
I have come to the conclusion after many years of doing this professionally that people just cannot grasp the concept of probabilities. Our minds had been created over hundreds of thousand years to think in binary outcomes.
It’s like, “This creature is going to eat me, now it isn’t” has now been transformed into – “this team is going to win, now they’re not.”
It’s very difficult to get those grey areas in place, but that’s exactly what you need to be profitable. So you’re giving odds, you think that this team is going to win. It’s not going to be really an issue, but what what odds are you being offered?
If you go into a betting exchange and you see odds of two, then if you do one divided by two, that’s basically saying that this event is going to occur 50% of the time.
If you think the event is going to occur more than 50% of the time, you can back it and if it’s below 50% the time you think it’s going to occur, then you can lay it.
You can basically profit on any direction! You can make a judgement on every single price that you see on the exchange. Now, the way that I do it is I think that there’s a natural variability within the market, and that’s in terms of odds and the terms of the outcome of the actual event itself. So what I’m looking for is I’m not looking inside that natural variability – I’m looking for things that are well outside of that.
When I see something that I know, has got a 50% chance of winning, but the market thinks it’s only got a 20% chance of winning there’s a 30% margin of error there for me and I will bet on that. It’s absolutely guaranteed if I bet on that, while I may not win on this occasion, if I do it 100 times I’m going to end out ahead.
Where the tipsters go wrong
So where all these pundits and tipsters are amiss is that they’re not pinning a probability on the chance of something happening. I know you might be thinking, I don’t understand probability, I’m not interested in that!
That’s fine, because that’s not necessarily your job. If you’re receiving advice from a tipster, from a professional punter or a pundit, what they should be able to do is tell you if there’s value there and they should be able to nail that value for you as well. So one of the things that I’ve learnt over a very long period of time is you can find value, but the problem that you have is because of this variability, it’s possible you may go on a string of bad results before it starts to turn up.
In fact, if I show you a strategy that I started fairly recently, I’ll I’ll take a chunk of it and I’ll show you how that variability works out. Because what you’ll notice is I know I was betting value because I’ve modelled this particular sport unbelievably well, so I can nail the chance of something occurring on the chance of a win on this sport.
Basically, I know that there’s a certain amount of sort of wiggle room that I have to have within that particular model. So it could be that I perform this action, but because of a certain amount of variability it may go against me in the short term.
So what you actually see on this graph above goes through a long negative run and then suddenly all of those results start to come in and it swings positive. Now, the longer I run this model, the more I bet to this particular model, the more money I’ll make over the longer term, but I have to accept that it’s going to have ups and downs all over the place.
This is why when tipsters tip a horse or a pundit says something about a football match or anybody writes any article about anything, you should nominate a price at which you’re willing to back or lay at. You should say this is the chance that it has of winning this particular race, this particular event and therefore, I will not back it below this amount or I will back it above this amount, because you are accounting for that variability.
If you take your margins too tight, then you could go bust because the market will swing up and down against you. Over the long term, it basically ends up positive, but if you have very small margins and it swings against you, you could blow your bank completely.
Bet Stimulus: What does it mean?
So let’s imagine a tipster tips something or a pundit and a football match says that they think that they’re going to win what they should be saying, ‘I like Manchester United tonight and I think they’ve got a 75% chance of winning and therefore, I’m willing to back them above this price. Then what should happen is they shouldn’t say and ‘therefore stick a tenner on it’ they should say: ‘therefore, I think it’s got an 80% chance of winning this match, but the market’s pricing it only at a 50% chance, therefore, I think this represents a great bet.’
But of course, that’s not going to happen. It’s not immediate enough. It’s not thrilling enough. It’s not exciting enough. People won’t do that. I could probably go onto a a particular channel of some sort and say to them this would be the chance of this occurring – It does not make for great television!
However, if you go on and say,
‘Oh, yeah! I really fancy this one, it’s the prices crashing in, it’s stepping up and trip and therefore I’m going to have my money on this horse!’
– a classic bet stimulus!
Now I bet that quote stood out the most to you than throwing in a probability statistic, it’s definitely more exciting and entertaining. This is what drives people to place a bet.
Within the industry, this is called bet stimulus and this is what people are trying to do on the sell side of the industry from a bookmaker point of view. They’re trying to stimulate you to place a bet, but what they won’t do is actually give you the chance of this thing occurring, because if they did, you’d realise that you were going to lose money over the long term anyhow.
Every major bookmaker, including betting exchanges, engage in this tactic. None of them particulary care if the tipsters, pundit or analyst is succesful, they just want to stimulate interest in a market. I thought Betfair trading may be immune from this behaviour but unfortunatley it isn’t. So any advice in the betting industry is more or less a total minefield for newbies!
What I would love to see is betting tipsters and punters and all of the people within the industry actually nail their predictions with a percentage probability. However, I don’t think that is ever going to happen, simply because a lot of people are going on gut feel, they don’t have a model in place and therefore they don’t know where the value is.
That fact aside, as I have learnt, the industry doesn’t want solid adivice, they just want people to bet. You can’t escape the fact they the industry is funded by losers! The industry is also hamstrung by the fact it can’t really be seen to promote winners.
So I think we are stuck in mode of operation that will no change, ever. But on the plus side if you understand this article you will be on the right side of it and in a small minority that are actually putting a but of science into their betting and trading!
Summary, Price, Price, Price!
Yes, it may win, but it may have won at a bad price or yes it could win, but it could win at a good price. There’s a big difference between the two because I focus on PRICE. That’s what I’m most interested in.
It’s no good winning frequently if I’m not getting value out of that because over the long term my P&L is going to head off in the wrong direction. If you can get a decent price on something, then you definitely will win money over the longer term.
So the next time you place a bet that’s what you focus on.
Remember:
- Focus on the value!
- Focus on the price!
If you don’t think the price is big enough, and whatever you’re doing suggests that that is the case, then you simply don’t place the bet. You’re under no obligation to place a bet to try and make money!
You can just wait for the right price to come along and when you see it, you just jump on it and take full advantage of it. It’s simple, that’s what I do!
It’s made me a lot of money over a long period of time and you can do the same. The only way to profit in the long term is to know what chance something has of happening and then to find odds that represent value.
Any professional punter, tipster or pundit should be able to give you that particular price. If they don’t, then they don’t know what the value will be and their tip is worthless.
So you can be one up them with having that knowledge of value and chance. Make sure you use it.
