The truth about money management

[picasso]

<BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Originally posted by Illini:
My question for Picasso and the other sharpies is about the -120/EV games. If you like the dog at +3 -120, do you play it? Or is -120 always too much juice for you guys? <HR></BLOCKQUOTE>

Break-even for -120 is around 54.5%. If I had reason to believe that this particular play would win at least 55% of the time, I would play it. If this is an NFL line, +3 -120 is better than +2.5 -110. That's why books not named Aces Gold don't let you buy on or off NFL 3 for 10 cents.

 

[JudgeWapner]

Good $ management won't make you rich,but will keep you from going broke.

 

[Woody0]

<BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Originally posted by Max Value:
If 5% is too much what would be an ideal percentage for a flat bettor at 54% win rate?
<HR></BLOCKQUOTE>

Well I guess fewer sports bettors are aware of the Kelly criterion than are blackjack players. Simply put, to achieve the maximal rate of bankroll growth you should bet that fraction of your bankroll that is the same as your advantage. Thus if your advantage is 1% you should bet 1% of bankroll. Some players prefer to play at half Kelly rates; which while restricting bankroll growth also limits the risk of ruin. The advantage in blackjack constantly fluctuates but most importantly can be calculated in real time at the table to allow bets to be sized.

Unfortunately the advantage in any sports bet cannot be quantified as in blackjack. However in order to calculate the answer to your question lets assume that your winning rate is 54% and that you make flat bets at -110.

Thus you have two outcomes:

loss 0.46 X 110 = -50.6.
win 0.54 X 100 = 54.0

Summing these results you get 3.4 for a 3.4% advantage. Thus if you are certain this is your advantage on any bet the Kelly limit for maximizing bankroll growth is 3.4%. Anything greater than this can be shown to ultimately lead to ruin. This is what Fezzik is referring to "as far from obvious"

A more cautious 54% bettor would probably bet 1% to 1.7% of bankroll.

 

[NOT_GUILTY_AND_IM_FILTHY]

First of all great article. I don't really agree with it, but at least it's got people talking.

For some money management is something they will never understand because they don't have the control. It's totally up to the individual how he/her wants to invest. No one tells him/her how or who or how much.

I really think win strike rates are not important unless you are in fact trying to beat the man straight up and betting level stakes, then it becomes important.

I don't know about some in here but i have gone streaks of only hitting a low percentage and still made money! of course we all strive for the highest percentage that we can achieve but when it's all said and done at the end of the year profit over rules win strike rate anytime.

And how about the guy who solely plays futures? does he have to hit 60% of his plays to show profit? No. Nowhere near that.
Yes he might be a dummy for betting futures but if he only hits say 1 of his 10 futures for the year he might actually be well ahead!

How the individual bets and his/her personality has alot to do with how much money they make. But i will say this. It's a grind everyday and you have to take the good with the bad. How do we handle that? How do handle going 0-5 for the day and bounce back tomorrow better is what we all should be talking about, because its not easy this game we play.

Regardless of how many posts i have made i am no rookie in terms of the industry. I am glad to be here and post. If it actually benifits any is another thing entirely.

We all know the highs of going on 10-0 runs but when things go bad (and they will!) you have to remain positive and learn from an errors that you may be making. Would i have done anything different? Did i have unluck in my plays? Did some bozo beat me in the bottom of the 9th by not being able to close it out? Bad beats! Part of the business. No excuse but sometimes the ball just won't drop, ask the US basketball team! Would you have played it different? If you stick to your guns enough and pick your plays well enough going through a bad run really is a learning curve that everyone has to figure out. I would like to hear how some in here ride the bad streak out? Again everyone is different but this is just as important as money management, level stakes or even picking plays.

Footnote- i went 2-3 today and still made money. Would i be be any happier if i went 5-0? Proberly! Is that a good thing going 5-0 and then lose your ass the next day? No. Money made and gained is the bottom line, nothing else. Cheers to everyone. I hope more can contribute to this and add more about the mental side of betting and how to overcome bad streaks.

 

[WildBill]

I don't see how anyone could argue with Fezzik here. If you win 55% or better and find ways to CONSISTENTLY go broke, that would be a rarity indeed. You would expect the guy to learn something, but some people just never do learn I suppose.

Then again I am totally on with Shrink, guys who pick 55% CONSISTENTLY aren't anything close to dime a dozen. I would guess a good percentage of the guys that win money betting sports would hit barely 55%, maybe a little less, if they were purely depending on their handicapping skills. But the winners generally don't do that, they generally just work harder than you do finding small edges whether it be profitable scalps or just good numbers for the picks they do make. If they get a half-point better than the average bettor every third game they play, they are going to be miles ahead of the pack.

 

[wantitall4moi]

OK, someone explain this too me that is better at math than me.

Since 1985 there have been 4599 games in the NFL including playoffs. in that many games there have been 119 ties, or roughly 2.6%. So that is a starting point for games where you might get a better line. So say there were another 120 games or so where the game landed a half pint away from the line. I don't think it is that many, but for the sake of argument we will give it a max amount. That is still only about a 5% advantage over every single game that has been played.

In the NBA since 1990 there have been 15256 games of those there were 339 games that tied, so actually fewer pushes in terms of percentages than the NFL (2.2 versus 2.6).

In NCAA football since 1990 to 2002 (not including last years) there have been 9286 games played and 145 pushes, that is the lowest push rate of the 3 sports I checked, 1.5%.

It would be nice to know the total games played in the NCAA basketball ranks, but I don't have them. But I am sure the rates would be similar.

SO here is my question/comment. In spread based sports everyone is worried about the line or the best number. I have shown a total of 29141 games, and in those 29141 games there have been a total of 603 games that pushed. That is an overall push rate of 2%. So a guy betting knows that he has a historical chance of getting a push 2% of the time.

Of course there are games that land within a point or a half point of the line. Even assuming you don't have to buy it off (which is foolish BTW) and simply find a better number somewhere else, what is the percentage gained? Obviously you are nt going to bet every game, so someone who is really good at math figure what the advantage is by getting a better line is for someone who is a 55% capper, and that 55% assumes they gain at least the 2% built in advantage (which we can't really do, but I like showing best case scenarios).

Basically in spread based sports getting the best line over all isn't going to make or break you. It doesn't mean anything at all probably 95% of the time.

All it does is put a psychological burden on gamblers. We see it all the time. "Oh shit, I lost a half point on that game" or "Damn I could have gotten -2, now it is -4" (hoops). If you look at history it shows that those line moves are pretty meaningless over the long haul. And worrying about them isn't gong to matter if you bet enoughgames, you will make up for missing a line easilly with volume.

If anyone tracks their nmumbers and goes over every game they bet, I bet they can cvount the times a half point or a full point has cost them in a game on both hands. Is ten games in a couple thousand that meaningful? Not really. Even if you could have gotten a better number and turned a push into a win, or a loss into a push, is it worththe mental strain that worrying about it causes? Again, no. It is like missing a light on a 1000 mile trip, is sitting at a red light really going to make that big a difference? Is stopping for gas? It is a minor thing that in the long term doesn't mean anything.

Because there are so few instances where they really matter. Even if you quadrupled the pushes, it is still only about 8%, and there haven't been that many games where the spread was that close to the result, and I would bet on that.

If anyone has a database that has a filter for +/- 1 or +/- .5 as an ATS feature can comment, but I doubt they would.

Worrying about numbers is another reason why guys lose at sportsbetting, they are so worried about losing a half point they put themself into a frenzy. And if that half point does actually cause them to lose, it blowes their minds, and they are more thanlikely going to get buried. That is why it is best not to worry about that shit at all.

 

[Illini]

Wantitall- I think it's a pride thing. Bettors that get a game at -4.5 think I'm a total square if I take them at -5. They're so proud of themselves, even though most of the time it doesn't amount to any difference at all.

 

[dimeplayersonly]

money management is the single most important factor in gambling.......


read what i said.........i didnt say it was the single factor that made you a winner....but

proper money management helps you ride out the losing streaks....(something that some posters seem to never have...but i know better)....unless you have a money tree in your backyard, you better use money management........if you say money management doesnt factor in your agenda when betting......then

1. your lying
2. you bet with play money
3. you just got a second mortagage
4. you just won the lotto....
......you get my point

money management is tied into another aspect of successful gambling.....ie. discipline


imo....money management and discipline will keep you in this game longer than anything else...

dont you manage your money in everyday life????

gambling shouldnt be any different....

 

[drunkguy]

wantitall-

the problem with a large scale analysis like that is that different pointspreads have varying chance of pushing. Sure, a half-point across all games is not worth "that much". Because you are factoring in the 5-point spreads, etc, which rarely hit. Also it seems that you were looking for an exact push with whatever line was in your database, when in reality you should be going at least a half point up or down. So any line in your database of 2.5, 3.5, 4.5, etc cannot push by having the half point attached. Looking at the chance of a push on a 3 should encompass at a minimum the 2.5, 3, and 3.5.

Stanford Wong's book has already done a lot of this work, and I believe updated tables are available for free through his website.

 

[CharlieMaxwell]

Wantitall,

Excellent posts, especially the last one. Have you ever done any writing that was published on a Web site or otherwise?

Charlie

 

[wantitall4moi]

Charlie- no, just forums stuff

Drunk guy I actually have the results for games that closed -2, 2.5,3,and 3.5. In football anyways, from my own results. And of course those have the higher probability of crossing over.

But I do not, unfortunately have the data of which lines moved from what starting point to what ending point. All I can do is look at the closing numbers I have and go from there.

So as a sub division you can say that of the 119 games in the NFL "x" games did involve the areas around 2 and 3.
And go from there.

I have posted many many time that the -3 spread is one of the most overrated worries in sports gambling history. I have also posted team by team breakdowns on the number of times they closed at +/-3, and pushed at minus or plus 3.

There are a couple teams that have been involved in upwards of 30 situations where they were either plus or minus 3 and didn't have a single push.

You can always break it down like that to fine tune your plays even further. But therein lies the rub, if you start sweating every -3 number you won't be able to play about 20% of the games in an NFL season, so I just don't bother with the break down. That is why I always say more is better. Because you have to know youe built in failure rate before you go in. Just like you know what you have to hit at -110, it is almost the same thing. You know you have a possibility of x% of being on a push or loss number, just like you know you have to win x% to overcome the vig books deduct from your winnings when they pay you.

 

[WildBill]

In this day and age of numerous outs and free half-points, a well funded and diversified bettor can do better than the 2-3% figures. Getting an extra point is far from unheard of and don't forget juice plays a role in it as well, where sometimes you don't get a better number, but you lay a lot less or even get some plus money. All adds up. Last point though is that don't take 3% for granted. If you pick at say 53.5%, that is a barely winning figure with an ROI of just 2.4%. If you got 3% in additional wins by value through shopping you would go theoretically up to 55% wins, which yields a far stronger 5.5% ROI. That is you more than double your long-term return.

Little things mean a lot, as Fezzik points out, it all begins with getting above break-even. Then after that money management can kick in somewhat, but still increasing your winning percentage will generally far outsize your return than skillful money management will.

 

[wantitall4moi]

Wild Bill,

I was going to mention that as well, but figured that keeping an ave of -107 would be simplest. Because unless you can cite game by game breakdowns it isn't something you can put a concrete figure on.

Your second statemnet is what I want to have someone explain in terms of probabilities. That 2 or 3% chance overall in terms of someone picking and chosing specific games, and is generally a 53 to 54% capper.

I have made the statements in the past that that capper will have the same probability of avoiding the games with the "close" lines as he will as picking games over all. Meaning he will avoid a line 53 to 54% of the time if he purposely means to, but "hit" the "bad" number 53 to 54% of the time even when he tries not to.

Not sure if I am relaying that coherently or not.

In simple English, the games that push or games that lose because ofa point or a half point are only meaningfull to the guys that play them in the first place.

That is the catch-22 of my theory, obviously the more games you bet the higher the likelihood of hitting a "bad" side. But is the volume of plays made enough to overcome that? I say yes.

Just as it is logical to think that a guy who is very selective about his plays will be less likely to hit a "bad" number, but WHEN they do, its detriment is more meaningful.

Does that make sense?

 

[oldmanTED]

WildBill:

Respectfully, I must disagree with your last statement "increasing your winning percentage will generally far outsize your return than skillful money management will".

I have posted my 2002 Football Season results, which should be in the archives from last December, wherein with a decent win percentage of 55.15%, the increase to my bankroll was 94% through the use of varied money management of between 1%-5% on my plays. The bulk being in the 1% range, while only having 7 plays of 5% for the entire season. The plays in between that range were somewhat linear, ie. more at the lower percentage with less at the higher percentage.

I am in agreement with Dime, that proper money management and discipline are crucial to success in this business. A winning percentage is important as well, but you bet with money not wins and losses.

 

[Dweeb]

<BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Originally posted by Woody0:

Originally posted by Max Value:

. . . . see above . . . . .

Thus you have two outcomes:

loss 0.46 X 110 = -50.6.
win 0.54 X 100 = 54.0

Summing these results you get 3.4 for a 3.4% advantage. Thus _ if you are certain this is your advantage on any bet_ the Kelly limit for maximizing bankroll growth is 3.4%. Anything greater than this can be shown to ultimately lead to ruin. This is what Fezzik is referring to "as far from obvious"

A more cautious 54% bettor would probably bet 1% to 1.7% of bankroll. <HR></BLOCKQUOTE>

- - - - - - - - - -

Ok. Good explanation. Thanks Woody O