I've floated the idea of writing up a basic outline of my approach to finding value in the sports wagering market a few times, and there has been at least lukewarm interest, so I decided to put in the time and do it.

I've mentioned a few times that I am a contrarian, but I've never fully explained exactly what the contrarian approach entails. Anybody with more than a passing interest in this history of economic thought, specifically the investment philosophy of J. Maynard Keynes, has likely heard the phrase "contrarian investing" before. Though I am far from the the first or best contrarian sports investor, I did stumble upon the basic concepts organically, coming up with the seed ideas during an econ class a while back. I believe my personal history with respect to sports betting is at least of passing interest, so I include it here:

I've always been a gambler. I supported myself playing poker for a time, and still play with some regularity. Notions of value and sustainable equity have informed most decisions I've made for as long as I can remember. As a sports fan with tons of money floating around on various internet gambling sites, it is only natural that, at some point, I would be tempted to place some sports wagers. I knew, however, that the books were very, very good at their jobs, and with the juice they charge on all their bets, there was no way for me to simply pick enough winners to have an edge. I'd make a few bets, here and there, but there was no expectation of profit; it was simply for action, and I was perfectly comfortable with that. There was simply no way I could interpret the available information better than my counterparts running the show and setting the lines.


Then, in Econ class one day, my professor started talking about John Maynard Keynes, and his personal fortune. Apparently, he was a contrarian, which meant -- very simply -- that he knew the public overreacted to recent news, good or bad, and tended to do the OPPOSITE of what the public at large was doing. If a stock was cold, he'd buy. If it was hot, he'd dump it or sell it short. He took positions that were contrary to public opinion, because the public overreacted, and he made a fortune.

"Why can't this apply to sports betting," I thought. The idea took root, and I started fumbling around, trying to figure out exactly how the sports wagering markets work, and how rational investors behave. "If a team is exceedingly popular," I thought, "isn't it likely that the books will inflate the price on that side, and lower the price on the other?" If everyone loves North Carolina basketball, and the line for the national semi-final opens at UNC -4, and 75% of the public is betting on UNC, is there likely to be any value taking UNC and laying the points? CAN there be any value there?

Have you ever seen a side that looks just too good to be true? A football team that's 2-4 in the conference and got blown out by a historically bad school the week before is favored by 3.5 at home against a 4-2 school that looks to be a program on the rise, and just came off a convincing road win? "Team A is terrible, and they're LAYING points? I can get Team B plus 3 points and a hook? I am going to load. up." And everyone does. Team B gets 80% of the action, and the line doesn't move. People just keep drilling and drilling. As far as everyone can tell, the line seems off by at least 7 points.

What's going on?

Every number -- every single number -- that the books put up serves a purpose. They don't feel charitable and decide to give everyone a huge edge one week. They don't lose their minds. They don't miss something, and get out-capped by those turds at Sigma Chi with their volleyball courts and double-popped polos. If they install Team A as a 3.5 point favorite, they KNOW what people are going to think. They know they're going to get one-sided action, and if Team B covers, they're going to lose money on the game. 5% vig won't help they have to pay out 80% of the players.

So: the book puts itself in jeopardy, and allows the public to load up on a team. They know how the public is going to react going in, yet they still do it. Why? What conclusion can we draw from this? The books are rational, they're not profit maximizers (as they are slightly risk-averse in certain cases), but they're close. WHY is Team A a 3.5 point favorite?

Because Team A is actually an even bigger favorite. The only way Vegas allows the public to load up on one side is if THAT SIDE HAS NEGATIVE VALUE. The ONLY situations in which the books put up what LOOKS like a bad number is because THEY WANT EVERYONE TO THINK it is a bad number, and wager accordingly. The books don't do bad numbers. They don't give value on public sides.

In this situation, whether I can figure out the rationale behind the line or not, I'm going to be all over Team A. I'm going to trust the books and lay the points. And this is the fundamental nature of contrarianism. It's ugly. It's SICK. I'm backing a team that looks like it has no chance to win outright, AND I'm laying more than a fieldgoal. The books know which teams and which numbers the bettors will like, and they charge a premium to get on them. The fundamental mantras of contrarianism are:

THE PEOPLE SETTING THE LINES KNOW MORE THAN YOU DO.

DO NOT TRY TO OUT HANDICAP THE BOOKS.

THERE IS NEVER ANY VALUE ON PUBLICLY BACKED TEAMS.

IF IT LOOKS TOO GOOD TO BE TRUE, IT IS.

ALIGN YOURSELF WITH THE BOOKS.


These are the basic assumptions from which all my plays come. It's pure economics. If two goods have equal intrinsic value, but one is significantly more popular than the other, the market will lead to a higher price on one good and a lower price on the other. Only one good can show a profit. When the books take one-sided action, they suddenly have a financial interest in the outcome of the contest, and are -- like the bettors from whom they take action -- sweating the outcome. They're gambling. When the books gamble, you'd better believe they're doing it with an edge.



And thus ends your very crude, very basic introduction to contrarian sports wagering. I'll address some of the more advanced topics in time, because there's more to it than just fading North Carolina and the Yankees every week, but I'd like to get some feedback first.

If anybody has any questions (general or specific) or criticisms, I'd be happy to address them.


Wang

As soon as I get to my next class I'm reading this masterpiece.

You're going to get me back into betting on sports, I just know it.

Good write-up. Do more.

This was just a stream-of-consciousness, spit it out type exercise. I want to write some more, but I'd like to know what makes sense to people and what doesn't. Do the examples seem rational? Does it seem intuitive? Counterintuitive?

I can't wait until I get to explain the mindfuck that goes like this:

"Okay, okay. I'm a contrarian. I like ugly. Ugly is good. Good is bad, though. Indians favored at home against Devil Rays? Ugly, and good. Red Sox road dogs in Houston? Good, and bad. Okay, okay. Contrarian. A-ha! I see the Giants are home favorites against the Cubs. That's surely going to be a play, let's see here.... who is on the mound. Oh! Lincecum! Wow, the price is really short, too, he's only -106. That's a great deal! Wait a second, that's a good deal. Like, a really, really good deal. Hmm. I wanted to back Lincecum, here, which means... I don't think I can back Lincecum. Bummer.

Moving on. Ah, the Red Sox are... -240 at home against the Twins? That's disgusting. No team is that good, and the Twins have been on fire. I would have liked the Sox here at -150 or something, but -240 seems too high. What an awful be-... Dammit. Should I be laying all this chalk here with the Sox? I... think I should.

What year is it?

I am a

Brachiasaurus"


When you become a tried-and-true contrarian, bad numbers start to look so good to you that you are immediately distrustful of them, and vice-versa. It's weird. I'll say to myself: "If East Carolina opens as a 14pt dog, I'll stay away, but if they open as a 6 point dog I'll be on them for a double." So. Weird.


Wang

I have a headache, been at work for 8 hours and have an hour to go and I never studied economics (damn liberal art major).

Can you get more in depth on what you would do here and why?

I followed you all the way, everything made sense. I think you could have something there, but how often would you say there are true +EV situations? I wouldn't think there would be all that many, and you would find yourself ultimately handicapping against the book without knowing and taking the games where you had a large discrepancy from what you thought the line should be and what it really is, although there is more to your theory than just that.

I fully understand the last part. I tried to go a couple weeks in everyday life by doing the opposite of my natural instincts, and after awhile I had no idea what was me and what was the opposite. Anyway, I'll be looking forward to some in-depth stuff hopefully.

I have a question. Is there any way we, the wagering public, can have access to the information about how much money is going in on a game? Like, lets say 80 percent of the public is taking the bengals -8 over the browns. Is there anyway we can know that the public likes the bengals, so we should take the browns?

Yes. I will address this at some point. In the particular game I'm talking about, I mentioned that the Sox were a good bet, but that I didn't have the stomach to lay that much chalk. The Red Sox won handily.



This topic should actually be covered in Sports Gambling 101. FIND REDUCED JUICE. If you're seeing splits like -110/-110, you're probably going to have a tough time showing a profit. One of the most important aspects of showing a profit betting on sports is posting up at a shop that spreads lines that look like -104/-104, or -- ideally -- at a place like Matchbook, where I pay a 1% commission on winning baseball wagers (2% on other sports), and nothing else. Worst case scenario, for bases, I'm looking at -102/-102. At that point, I am ONLY losing money if the true price is even-money, or -101/+101 either way. All things considered, with juice this low, there are very, very few spots where I'm going to be any worse than break-even in the long run.

It is significantly, significantly more likely that I have positive equity than negative, which is a recipe for longterm success and profitability.




Well, I'm glad you asked. There are a handful of ways to tell where the public is.

1) Wagerline.

The ultimate. Consensus data for all sports. Wagerline retards tend to blindly bet overs/favorites (or unders/favorites in baseball), but the information isn't provided by any individual sports book, which makes it significantly more trustworthy in my opinion.

2) Vegas Insider.

Consensus data, powered by sportsbook.com.

3) The forums at Covers.

Sports bettors go here to post their action and discuss sports betting. They are all idiots. It's easy to see which teams are popular by reading the forums and fading the shit out of them.


Voila! You have your basic picture of the public's specific, game-by-game likes and dislikes.

Great stuff. So basically, you find out where the public is betting heavy on, and bet the opposite. Explain the ramifications of a static line, verses a line that moves, and how that would effect your wager. Now, say in football, lets say a line opens at -4, and the public pounds the favorite, until it's -7, and a second game opens at -4, and the public pounds the favorite, but the line stays the same. How would you analyze the two situations?

The latter situation is much more attractive to me. When Vegas takes a stand and refuses to move a line that is getting very one-sided action, it is because they have no interest in getting balanced action on the game. They'll let the money pour in on the favorite, because they really like The Dog +4. If they like The Dog that much, I'm going to be on it for a larger amount than usual.

Sometimes, you'll even see spots where, say, a team opens as a 7 point favorite, and the underdog gets just pounded, and gets like 65% of the action (very heavy for a dog). The book then moves the line to 7.5. The money is coming in on the dog, and the book gives them MORE points. This is called reverse line movement, and in this case would make the anti-public favorite a huge play for me. I'd be on it for a 4-unit bomb almost certainly, even after the book made me lay the hook.

As far as the "find out where the public is betting and bet the opposite" statement, that's SOME of it, but not ALL of it. Sometimes the public will overvalue a certain team, but at the same time overvalue the opposing starter, or undervalue the starter for the overvalued team. There is going to be some noise you have to sift through, and it might not always be as simple as fading teams getting 60+% of the action at wagerline. If there's conflicting signals, I tend to pass. Sometimes the books are just going to set a good line, and let the chips fall where they may. In those cases, they'll be relying on the juice, and I'll probably be splashing around in a neutral or even slightly -EV spot.


Wang

Excellent stuff. This is one of my favorite threads on FCP.

Just read all that, very interesting, I guess its not just as simple as beting on the underdog?

Not by a long shot. Here's a good example for a baseball game I specifically remember from last week.

The Indians, by all accounts the most disappointing team in all of baseball, were hosting the Devil Rays for a 4-game Thursday-Sunday series. The Rays had very recently swept the Red Sox on National TV, and were -- at the time -- in first place in the AL East. They were the new IT TEAM. The Indians had lost 10 straight, and recently dumped their ace to Milwaukee, sending up the white-flag and preparing for next year.

Game 1 on Thursday featured Andy Sonnanstine for the Rays and Aaron Laffey for the Indians. And the Indians opened as small favorites.

As one may expect, when the best team in baseball is getting plus money against a hapless, injury-ridden team, the good team is going to get drilled. Of course, they got more than two-thirds of the action at wagerline.

In many cases, this would cause the price on the Rays to increase, and the Indians to drop. Given the volume of action on the Rays, if the book was concerned in this case about getting balanced action, the game would probably close with the Rays as favorites, in an effort to slow the onslaught of Rays' money coming in, and balance it with some Indians backers.

Except, in this case, the Indians actually closed at a HIGHER price than they opened. (see above link for line moves) The book knew something the general public didn't, and they exploited the public's recent love-affair with the Rays. "You guys like the Rays? Here. We'll make it even CHEAPER for you to bet them."

I was on the Indians here, and if I didn't have a strict, one-unit-per-game MLB policy (which I may discard after the All-Star Break), I would have been on this for at least a triple. Of course, the story would not be complete without a conclusion.



It's not just about taking dogs, it's about taking dogs when the public thinks the number looks short, or favorites when the public thinks the number looks high. "USC is only favored by 9.5? OMG WHOLE BANKROLL ON USC THEY WIN BY AT LEAST 3 SCORES." Okay, well, I'll take whomever they're playing. I don't even care who it is.



Wang

Wang- if you're interested in the general concept of the economic applications of contrarianism (which I'm certain would have carry-over value to this strategy of sports wagering), I would suggest reading David Dreman "Contrarian Investment Strategies" and also "Irrational Exuberance" by Shiller. Both make great efforts to outline what patterns one should look for in crowd mania and irrational "news driven" thinking- ala 'the fallacy of vividness' per B. Miller- in any field that seeks to quantify value in real time (which would apply to sports lines). Both can be a bit 'fluffy' at times- they're written so assholes with a minimum of 105 IQ can read them in airports- but there's huge substance in them, as far as operative philosophy when one seeks to zig when everyone else is zagging and identifying the optimal times to do it.

(you may have already read these books- if so, disregard, if not, consider looking into them. In reading your posts- my only understanding the most superficial aspects of sports wagering- it's clear that the practice of contrarianism itself has completely dual application and a lot of the strategies you took from econ and applied to sports wagering are valid)

Yeah, I will absolutely do that. Contrarianism in economics was simply what sparked my interest in contrarian sports wagering, and, as such, I really never learned ANYTHING about general contrarian investment strategy. I'm going up to the mall to buy at least 1 shirt-with-buttons, and I'll stop by the bookstore and pick those up. Worst case scenario, I can leave them sitting around in my apartment too look smart/cool/rich.

Thanks.

If you're really into the cornerstones that go into finding value, LMK and I can send you* a PDF of Seth Klarmans "Margin Of Safety". It's the out of print book on Value Investing that sells for like $1500 on Amazon/Ebay and even the PDF is extremely hard to come by. His chapter on distressed debt (aka- 'finding dogs') would probably have lots of carry over value. The info in the book is total gold, which is why it sells for such idiot prices.

(* This offer available to Wang only. Do not IM me begging for the file, as I will not send it no matter who you are)
(* This offer available to Wang only. Do not IM me begging for the file, as I will not send it no matter who you are)
(* This offer available to Wang only. Do not IM me begging for the file, as I will not send it no matter who you are)
(* This offer available to Wang only. Do not IM me begging for the file, as I will not send it no matter who you are)
(* This offer available to Wang only. Do not IM me begging for the file, as I will not send it no matter who you are)
(* This offer available to Wang only. Do not IM me begging for the file, as I will not send it no matter who you are)
(* This offer available to Wang only. Do not IM me begging for the file, as I will not send it no matter who you are)
(* This offer available to Wang only. Do not IM me begging for the file, as I will not send it no matter who you are)
(* This offer available to Wang only. Do not IM me begging for the file, as I will not send it no matter who you are)
(* This offer available to Wang only. Do not IM me begging for the file, as I will not send it no matter who you are)
(* This offer available to Wang only. Do not IM me begging for the file, as I will not send it no matter who you are)
(* This offer available to Wang only. Do not IM me begging for the file, as I will not send it no matter who you are)
(* This offer available to Wang only. Do not IM me begging for the file, as I will not send it no matter who you are)
(* This offer available to Wang only. Do not IM me begging for the file, as I will not send it no matter who you are)
(* This offer available to Wang only. Do not IM me begging for the file, as I will not send it no matter who you are)

QFT

Oh where oh where will I ever find a book like this? I was going to PM Scram, but he's made that abundantly clear it's not an option. Fck, what's a nigga gonna do? oh wait..


http://www.torrentz.com/bf5bb7bbe165596ff8...419df1e5a057771


God damn, you're a drama queen.

Such a good thread. Very impressed. I'm currently helping start up a bet site(don't worry I have no control over the odds) so I'm trying to get into it. All this insight is brilliant. In Ireland all my friends gambled like crazy on horses and it just seemed like such a dead end. Do you bet on horses? does the same theory apply?

Great thread but I don't know the american odds or the spreads on teams so some of it is a bit of it is lost on me but its really intriguing

Download it and see what happens.
Then get that pang of humiliation that occurs whenever one speaks about something they know nothing about and it turns out they're were wrong all along...

(possible one has actually gotten out without password protection, but it's unlikely. If so, LOL @ me- what a drama queen D bag)

well, it turns out you need that pang of humiliation, because all I have is an non-passworded pdf file copy of the book. I did do my download from Demoniod, not the link I linked above, so it's possible the one I linked requires a password..



To prove that I have the unpassworded, here's the table of contents...


1 Where most investors stumble

1 Speculators and unsuccessful investors
2 The nature of Wall Street works against investors
3 The institutional performance derby: the client is the loser
4 Delusions of value: The myths and misconceptions of Junk Bonds in the 1980's


II A value investment philosophy

Etc...




Here's the opening paragraph from the introduction...

Investors adopt many different approaches that offer littler or no real prospect of long-term success and considerable chance of substantial economic loss. Many are not coherent investment programs at all, but instead resemble speculation or outright gambling. Investors are frequently lured by the prospect of quick and easy gain and fall victim to the many fads of wall Street. My goals in writing this book are twofold. In the first section, I identify many of the pitfalls that face investors. By highlighting were so many go wrong, I hope to help investors learn to avoid these losing strategies...




So, LOL @ you, drama queen.

LOL @ me indeed.
They were all but impossible to get up to a month or so ago, and all the ones floating around out there were PWP. Either things have changed and a non PWP copy has finally gotten out and replicated, or you just got stupid lucky and found one that wasn't as a result of chance.

When I mentioned I had one on another forum (investing) I think I got 50 IMs in the space of an hour begging for a copy- about 1/2 from people who were otherwise tech savvy and knew how torrents worked. I know my own searches for it from 2007 onward all led to PWP copies.

Anyway, lets not derail an otherwise big-time post.

I have made a few ponies bets, but only, like, "The Field" in the Belmont when Big Brown was going off as a huge favorite and other spots like that where my contrarian angles are easy to find. I tend to stick to sports I can watch on TV or my computer. Gives me a sweat.

If you ever need any help with the American Odds system, just ask. As a quick example, "-110" simply means "10/11" or ".91." In English it means, "Bet 110 to win 100." "+110" means "11/10" or "1.1." "Bet 100 to win 110."

When I say Yankees, you should think "Manchester United" I think. (Man U spends a TON more money than most everybody else, right? Like, they have a huge payroll, putting them at a huge competitive advantage?")


Wang

Basicaly, though all the top 4 clubs (Liverpool, Chelsea and Arsenal) are pretty much the top 4 clubs because they have the biggest spending power.

In American odds, are the team that is -110 the favourite?

And also, how do you work out the overall vigourish taken by the bookmaker on a certain 2-team bet?

I'm quite interested in sports betting, but as an English man who doesn't entirely understand odds yet it's a tad confusing

It's alright, I usually have to spend at least twenty minutes explaining the odds with my friends everytime we go to Vegas, even though I explained it last time.

Yes, -110 is the favorite.

Well again, I got mine from Demoniod, which is a private p2p torrent community, and not a public one, so it's possible they just have a non-pw protected copy because the whole community is pw protected, in a sense. At any rate, it seems like a fascinating book from just skimming over it.

Yes. In Vegas, for example, a basketball line might open:

Boston Celtics -5.5 -110
Detroit Pistons +5.5 -110


That means the Celtics have to win by 6 to cash, and the Pistons have to lose by less than 6 to cash. The numbers to the right (-110 for each) is the vig you're paying. You're laying 110 to win 100, which is the vigorish. If you bet the 110, and win exactly 50% of the time, your equity is .5(100)-.5(110) = -5 on a bet that wins you $100, or a little more than 5% (which is standard bookie vigorish). If the books get balanced action, they'll make 5% of the total money wagered.

In soccer, since you're usually playing the moneyline (like I do with baseball) it would look like:

Turkey +180
Germany -220

(Ties are a push)


If you take Turkey, you bet 100 to win 180. To take the Germans, you'd be laying 220 to win 100. The vigorish here comes from the fact that the Germans win the game almost exactly 2/3 of the time, meaning BOTH bets have negative equity. Take the favorite for example. You bet 220 to win 100. Your equity is 2/3 (100) - 1/3 (220) = -$6.67


The goal for a player is to find numbers that are as close together as possible. When I place my baseball bets, the lines usually look like, WORST case scenario:

New York -201
Boston +199

And then I pay a 1% commission on all wins. Assuming New York wins exactly 2/3 of the time, my equity on New York is: 2/3 (100) - 1/3 (201) = -1/3. That's minus THIRTY-THREE CENTS if I take the Yankees, assuming my haphazard math is correct. Subtract my commission (1% of 100 2/3 times) of $.67, and my true equity if the price is perfect is negative $1 on a wager that wins me $100, or about 1%.

This has somehow turned into a lecture on the importance of reduced vig, which is not the question. The vigorish is easy to figure, as I've shown above.

What am I talking about now? Any more questions?

Is matchbook the only place you wager?

No. I try to stay posted up on as many sites as I possibly can, since you never know what opportunities are going to show up, or when Matchbook's server is going to crash. Matchbook gets 95% of my action, but their futures markets aren't liquid enough to serve my purposes, and their golf markets are almost non-existant. I keep money on Olympic and, Bodog (some of their more obscure props have value, and their alternate golf matchups can tickle my fancy, but that's about it), and I'm trying to get posted up on Carib and 5Dimes

All the Euros here can just use Pinny.


Wang


EDIT- I also forgot to mention that I like to line-shop, just to be safe. You never know which shop is going to randomly have a line that's ten-cents better than what's being offered on MB.

I lost a bet on the All-Star game last night, and as payment I will be unable to use the internet in my own home until Monday, starting tomorrow at 9AM. This is going to be torture considering how much of my bankroll is currently floating around at the British Open...

Anyway, all I'm trying to say is, if anyone asks a question and I do not answer, it is only because the library is closed, or my friends are torturing me by not allowing me to use their wireless signal.

I love this thread.

Thank you. I enjoy explaining my thoughts on the subject. It's fascinating to me.


I'd like to mention one other thing. Value from sports betting comes primarily from the gap between perception and reality. I'll use baseball as an example.

Say we have Team A playing Team B. Pitcher A is toeing the slab for Team A, and Pitcher B is starting for Team B. For simplicity's sake, let's assume they're playing at a neutral field (something that never happens in baseball).

Team A is 6 games under .500, and Team B is is 6 games over. Pitcher A is 4-7 with an ERA of 4.6, and Pitcher B is 8-3 with an ERA of 3.15. Team B opens at -110. For the sake of simplicity, there will be no juice in this scenario, so Team A is +110. Well, the public sees this, better team with the better pitcher, only a -120 favorite? And, boy, do they go off. Team B gets 65% of the action. It certainly appears the price is a little short, but let's dig deeper.

Team B has actually been outscored by their opponents this year; they've given up more runs than they've scored, but their record in 1-run games is 13-3. Team A has outscored their opponents by 49 runs this year, but their record in 1-run games is an abysmal 2-9. Let's look at the pitchers.

Pitcher B's ERA is 3.15, but he's walking a lot of batters, and stranding 83% of the runners he allows to get on. His opponents' Batting Average on Balls in Play (the average not counting strikeouts and homeruns) is a staggeringly low .210.

Pitcher A's ERA is 4.6, but his peripheral statistics look great. He's striking out almost 9 hitters/9 innings, and he has walked very few batters. Unfortunately, almost 40% of the runners he allows to reach base manage to score against him, and his opponents' BABIP is .342.

As far as the pitchers are concerned, the things the pitcher can control -- strike outs, walks, etc. -- seem to favor Pitcher A. Batting Average Against for non HR and strikeouts is almost TOTALLY uncontrollable by a pitcher; anything way over about .290 is unlucky, and anything way under is lucky. It just means a few balls have dropped in, or snuck through a hole. By all accounts, Pitcher A is more likely to be successful in the future than Pitcher B, and he's just had some bad breaks. His ERA will regress to a lower mean, while Pitcher B's will balloon.

Most of the players making a wager in this spot will see what they thing is "Better Team, Better Pitcher, Cheap Price" and hammer Team B. You, me, and the books, however, know differently. There's a huge gap between perception -- that Team B is more likely to win than Team A -- and reality -- that Team A has been unlucky so far this year, but is still the better team. The book uses these gaps to punish square players.

Value comes from betting against a severely overvalued squad -- a team on a hot streak, or a team that has been played up in the media lately -- or backing a severely undervalued squad. Sometimes you'll be betting on THE WORST TEAM IN THE LEAGUE, because the public overreacts, and perceives that they are worse ("NO WAY THEY CAN WIN") than they really are ("THIS SUCKS. THE MARINERS ARE SO BAD, BUT EDDIE BONINE SHOULD NOT BE LAYING -180 TO ANYONE. GOD I HATE THIS TEAM."). So just because a team is BAD doesn't mean they can't be the best value on the board. And just because a team is GOOD doesn't mean you there is value in backing them.

Always remember that you want to be backing teams that appear to be much worse than they really are, and fading teams playing over their heads. Sometimes, this is tough to do. In that case, I simply trust that the books would never put out a bad number that allows a bettor to have an overlay by taking a super-public side.

Enjoyable read so far.

I hope you get into some examples of lines you pick during the football season.

Pre-spam for his soon to be constructed handicapping website, IMO.

If he is indeed constructing such a website, contact me. I have brown people in far away places who do good website work for cheap.

(forgot to email that MOS PDF. I'll definitely do it later this evening)

Awesome thread, Wang-Wang.



I had located and completed the download (mine was a .doc on an [u]open[/i] tracker) before I even scrolled down to this. The drama isn't what I find annoying here; it's the fact that he had no problem stealing the thing, but wouldn't give the three or so other people on here who would even care an email that he believed would save them days of searching or thousands of dollars. Is it the hassle or the morality? Because the morality seems like a hypocrisy, even if you believe in it, and as far as hassle, it would arguably be easier to Sharebee the ****ing thing for everyone. I'm enraged.

I think he considered it a "hassle" issue, since he got like 50 emails from another forum about it. BUt I also imagine that it wasn't so much a "moral" issue, as in stealing is wrong, as it was " Wang is giving me something of worth, and the rest of you are giving me fck all, so fck off" issue. And also he probably takes a little sadistic, childish joy in having something no one else has, or can have. Like when you were a kid and had a super expensive/rare pokemon or transformer or what ever, and were a cunt to your friends about playing with it.

Here's a parable from my youth that I feel will melt Scram's icy heart: when I was 17, I started hanging out with a friend of my friends, of whom I'd always heard stories, but had never met. He always sounded awesome, but quickly I realized he was kind of a dick. He always embarked on all kinds of stupid "handy" hippie projects, like building his own beanbag sofa or making bracelets for girls who didn't want to have sex with him. He would flip out if someone teased him about it, and would overreact and try to hurt them or make it way too personal, and pretty much was a turd about everything and had no sense of humor.

One day, he came into my livingroom, where a few of us were playing Halo or something gay like that, raving about how he needed chainsaw to extract a prized piece of burrald wood from some place, so he can carve his own backgammon set. But he wouldn't tell us where. I refused to lend him my father's chainsaw, partially because I thought it was weird that he wouldn't tell us, but mostly because I didn't like him. He left, absolutely steaming.

Later that day, our other friend, Paul, came to us, asking what exactly we had done, because he was talking about kicking my ass and telling my parents I did drugs and shit. We told him he was acting weird and wouldn't tell us where he was taking the saw, so I wouldn't give it to him. It turned out that he was convinced that because I didn't like him I was going to steal his wood if he told me where it was. We all laughed for a while.

As it turned out, he had told Paul where it was, we assembled, extracted, and then poorly caved the wood into several terrible, mismatched, unrecognizable chess and backgammon sets, and threw the rest away. There's also a story about the actual extraction, but I'll save it for another time.

The point is...the point is that I'm spiteful and I steal things. I'll be havin' them duckets.

Upload time: 7 seconds.

http://sharebee.com/4bcd90e2

(My outrage should not be interpreted as any type of problem with Scram. Scram remains my reigning favorite poster, probably.)

No drama in gambling thread please.

Actually, you know what? I don't even care. I actually like drama. I'm not picking sides, since I like all of you equally (untrue), but I will continue to passively encourage you. Anyway, Scram still has my gratitude.

As far as the "handicapping website" idea, I will never, ever, ever fucking do that. I am not a tout, and I will never sell my picks. I have no respect for anybody that relies on short-term variance and has an incentive to pick super-public favorites over and over again so he has a better chance of going on a 12-2 that he can trump up. My bases record is under .500 for the year, and I'm up 25+ units, and that's just fine with me. I manage money for some of my friends, totally free of charge. Some of them are up over 40 units, and I haven't charged them a cent. Any of my friends can throw in with me on the conditions that they pay any fees involved with moving money in and out, they don't bitch and moan when I lose, they remain patient if I don't get all our action posted when I change directions on the fly, and they follow my strict bankroll rules. I've done well for them, and every single one of them has returned the favor in kind, even though it wasn't necessary.

Anyway, I hate touts, and some of the "ideas" I am trying out for the British Open this year (with my own personal account, of course) are going terribly. If things end as they stand today, I'll be stuck at least 15 units. I'm scared to check. If I get out of this down 10x, it'll be a huge relief.


Wang

Drama? None here, boss. Just bustin' chops (god, I love that expression).

What are the important stats when considering a wager on a baseball team? Meaning, what are the true stats that truly matter, and what are the false ones that the public loves that inflates lines and creates value?

A list of relevant statistics, both those of perceived importance, and their counterparts of real importance.

Wins/Losses vs. Baseball Prospectus Adjusted Standings

Wins and losses are generally a good barometer of how good a team is, but in limited (sometimes as limited as a full season) sample sizes, the standings can play tricks, and lead the public to perceive a team to be significantly better than they are. The solution? BP Adjusted Standings. Very basically, they take the key numbers -- on base percentages, slugging, home runs, etc. -- and then normalize it to minimize the importance of luck, and then again adjust to reflect the quality of pitching/hitting a team has faced. (On the above page, the numbers on the far right -- W3 L3, or third order wins and losses -- are the most important, and context adjusted.) The Twins, for example, are 10 games above .500, but based on their performance so far this year, they're really a sub .500 quality baseball team. In this specific instance, it comes from their unsustainably high batting-average with runners in scoring position. Find a team whose record does not accurately reflect the quality of their on-field performance, and you've found a team the public will valuate poorly.

A good example of this? The Angels. They're six games better than the A's in the standings, but the A's -- if not for bad luck and poor timing -- would be six games better than the Angels. I fade the Angels a lot, and back the A's.



ERA vs. FIP (found easy in the stats database at fangraphs) [or DIPS or QERA, etc.]

ERA is not as good a predictor of future performance as: K/9, BB/9, HR/9, GB/FG ratio. ERA's can be inflated by bad luck (if, say, the league is hitting .380 on groundballs against a certain pitcher), bad bullpens, bad ballparks, and bad timing. (If you want some background, here's a link to the wiki article on FIP/DIPS. Voros McCracken and Tom Tango are legends in the sabermetric community.) If a particular pitcher has a fantastic and sparkling ERA, but his FIP is unspectacular, you can bet he's due to regress to the mean, and will subsequently be overvalued by the wagering community. So: fade this shit out of his fat ass, especially if he plays for an egregiously overvalued squad that the public is in love with.

On the other hand, you'll see some pitchers whose ERAs are atrocious, but are actually pitching pretty well, and can give you some real value going forwards.


Understanding the very, very, very variable nature of wins/losses and runs is important. We don't care who WON, we care WHO SHOULD HAVE WON, all things being equal. Lucky for us, all things are never equal, so bad teams become public darlings, and good teams get lost in the shuffle. This is exploitable. The books are willing to trap the public for us, we just have to jump on the "OMG RU SERIOUS?!EIO" numbers when we see them.



Wang

I'd like to make a quick point. (<---- totally unnecessary introductory sentence)


It is a fine line between searching for value using basic statistical metrics and using that data to evaluate the strength of side, and straight-up handicapping a game. We're not trying to discern on face which side is most likely to win, or what the REAL price should be; we're simply trying to determine whether the public's misperceptions are likely to drive a price up or down. Keep in mind, the book knows all this -- Adjusted Standings, Luck, FIP vs. ERA, etc. -- already. I operate under the assumption that the books could choose to never give the player any value, but instead, as profit optimizers, decide giving a good price on one side is more than offset by the equity they gain from giving an even worse price on the other. They will exploit public perception -- of pitchers, of overall team strength -- to make a greater profit than they could by setting a near-perfect price every time.

I liken it to the notion of perfect, optimal poker play vs. exploitative play. Against another perfectly rational actor, I would play a flush draw one way, but against a less skillful player, I would play it a different way, that is itself exploitable. The public is exploitable, which means the books can maximize return by setting a line that differs significantly from the true line. If you see that all your data line up -- for example a lucky pitcher for an overperforming, large-market team on a legendary, media-referenced hot-streak, vs. an abysmally unlucky pitcher and his can't-catch-a-break, typically unpopular squad -- but the public is still all over the second team (unlikely), you should stay away. Because, now, you're effectively saying "I think the book is giving value to the public, here," and that runs contrary to the very nature of the book, and violates one of the principle tenants of Contrarianism. Sure, it's possible they made a mistake, but isn't it simply more likely they know something you don't?

Sometimes you'll notice one side is getting lopsided action, but the pitcher for the other side has an ERA of 3.1, and a FIP of 4.6. Maybe the second team is also outperforming their pythagorean won/loss record (the number of games a team should win/lose based on runs scored and runs against) by 8 games, too. There still might be value on the second squad, because the public thinks they suck really bad anyway, and that team -- even though they've been lucky to be as good as they've been -- is still severely undervalued by the public.



Wang

Wang - always been a big fan. Excellent stuff here boys. Looking forward to your football analysis.


One (contrarian?) thought on baseball. My brother and I were talking at lunch about 3 game series. We thought there would be some value in betting on the team in game 3 of a 3 game series that lost the first 2 games. The thinking being that most series go 2-1 or 1-2 as matchups, days off, travel catch up and in essence teams move back toward the mean.

We of course got lazy and didn't follow through.











That would be lefty@leftygolfer.com. Pleazkthnx.




Oh and for you bookies, the Michael Konik book on NCAA basketball betting was a good read. I may have to go back through it.

IF you're asking for the MoS book, I believe Dutch provided a link for you to download it from..

The idea that "most series end up being 2-1, so I should bet on a team that's lost the first two games of the series" is definitely flawed. There's no reason to believe that games 1 and 2 will somehow influence the outcome of game 3. That being said, if the Cubs embarrass the Pirates in games 1 and 2, the Pirates will probably have even more value in game 3 than usual. Or if the first two games of a series gave gone over the total by 6 and 7 runs respectively, there's going to be a lot of value in the under, especially if the books throw a super-low number out there, like 8.0. That's a dream spot for me. "I am 90% sure that the Cubs will score 8 runs by themselves. (shrug) I'll take under 8.0 for 2 units please."


Does anyone want to take a shot at predicting what baseball sides I've got tonight, and why? I've got a super-full card, with 9 sides and 4 totals, so it should be pretty easy. Do some analysis, boys, and tell me what games have value, and why.

Go.


Wang

I won't guess all of them but I'm positive you're taking KC over the White Sox.

Yup. KC has ****ed me in the ass all year long, so I particularly hate this play.

Boston +132 over the angels, and under the 7.5


Boston has been the second most money bet on them, but the angels have had the most, and Lackey is highly reguarded. 7.5 seems like a really low number, so contrary thought would say under. Also, if they game is thought to be low scoring, I would think low scoring games favor the underdog.

Cinnci +100 over the mets. The mets are getting pounded this year in wagering, they are hot, and they are going against a pitcher with an almost 6 era. And yet the game is almost even odds, so it seems like they are just screaming to take the mets. The mets are also on a 10 game winning streak. So take the reds


Balt -126 over Detroit. I looked at the numbers, and there's more wagering going on the Detroit dog. From my limited experience, usually people bet hard on the favorite, not the dog. So that seems fishy to me, so I'll take the O's.

Oakland +160 over the yankees. This seemed like a confusing line at first, as oakland doesn't seem like they should be that big of dog. Granted, mussina has a better record, but they have the same whip. But then, I figure I'll just chauk this up to "Yankee tax"

Kansas City +140 over the White sox. Lots of money going down on the white sox in the last month, and KC is always ill regarded.

Washington +199 over ATL and over 8. ATL tax. Betting is 2-1 on the under but the line has only moved .5 runs, so I take the over.

Houston +102 over the cubs This seems like a standard fade the cubs play. Seems like -110 is an attractive price for cubs fans. Pitchers seem very similar.


Toronto +148 over Tampa. This was a hard one to figure. Tampa is on a 7 game losing streak I can't understand why they are such big favorites. So vegas must know something I don't.... but then, I checked on wager line, and the betting is about 2-1 on tamp, so... when in doubt, go against the trend.


San Fran +116 over Mil. Mil's been hot, they have recently been getting pounded by the betters, and they just signed CC. Who is starting for them tonight. It seems like Mil should be a much bigger favorite. Add on that MIl's getting pounded by a 2-1 clip.. and all that leads us to San Fran.


I don't know the other two over/under totals, I dont' know much about them, or the thinking behind them. If you could go into more detail, that would be great..

Results..

Boston
under

Cinnci +1

Balt +1

oak -1

Washington -1
over +1

Toronto -1

Houston +1.02

San Fran

KC -1