These months are flying by. Add couple of Bank Holiday weekends in and before you know it, it’s Blog time.
This month I was planning to have the main subject about the merits of keeping a history of all the bets you make. They can be so valuable when assessing your portfolio performance.
However, the TBM team have been extra productive over the last month and have added in a good handful of new and improved features and some associated preset systems. (By the way if you ever have an idea for a tweak or improvement to the software, please email TBM Support via firstname.lastname@example.org . They are very open to suggestions.)
So, this month I want to give an overview of the presets and try to expand a little on last month’s sermon.
But first I have a couple of personal experiences that I feel are relevant to this blog and the general arena of staking money on the outcome of sporting events.
The first is about staking money on the outcome of events but not sports; instead, it is businesses, stocks, currency etc.
Yes, I put some money into an ISA (Individual Savings Account-for any non-UK readers this is a Bank Savings account that has a tax free element to boost returns).
The company I went with are going to invest my money for me in stocks, shares, currencies and with a degree of good luck and hopefully larger degree of good management their efforts will increase my ‘pot’.
What I liked about this company was that they did not just take my money. In fact, they wouldn’t take any money until I’d completed a questionnaire about my views on
What were my expectations in terms of % return and over what time period?
What level of risk (loss or downturn) would I be prepared to accept?
Where did I want my money to be used?
After I’d been through a 5-10 minute question set on-line did they recommend a level of management from their range that included ‘Under The Mattress’ through ‘A couple of ticks above inflation’ to ‘Put it all on 13 and chill the Bollinger’.
Now the important thing is that I went through that process and rationalized my investment based on my personal preferences and knowledge.
I’m entrusting them to use their ‘systems’ to hopefully provide a positive return at the end of the year. Based on my previous experience and knowledge that return on investment could be anywhere between 5% and 25% for a full year. Essentially it is now a passive system needing little input from myself.
However, with the product I have invested in I can log in and see a table and graph of all the trades, purchases and sales that happen on a daily basis: It can be like looking at the plans for the next ride to be built at Alton Towers. Up, Down, Round and Round!
So instead of looking everyday I step back and look at the bigger picture, once a week I will look at the full trend since I started. A couple times it’s been down on expected but overall, it’s up.
So, I got to thinking about my betting pot,
Would I be happy to make 5% to 25% profit on my betting pot over the year?
How much of my pot am I prepared to lose?
How do I decided where to use my money?
I can guarantee that everyone will have a different set of answers but in time let us see if we can come up with a common set of rules through this blog.
The second experience I want to relate is that I have just stopped following a tipster, quite high profile, who posts on the internet almost every day.
Previously I had recorded the selections of this very experienced and respected individual and paper-traded them for about 6 months before deciding to take the plunge with real cash.
Last year up to October there were +200pts profit (Returns = +200%) then it started to go downhill. I had a set pot of 100 points and followed him at 1pt consistently; in April it went bankrupt.
Let me be clear about what I just said: I had confidence in the system based on the previous data and followed it until the pot was empty. I bear no grudge and will still look and possibly paper trade again.
The point is that it can take nerves of steel to stick with a system and see that pot dwindle but that was within my ‘Risk’ criteria: I had assigned a specific amount of money to that system.
That is why I try to have a pot for each system; I calculate the stakes for a system from past performance, Strike rates, Return on Investment, Breakeven odds, breakeven strike rate, Longest Losing Runs, expected wins/losers, actual wins/losers etc
(Also, as an important aside: If a high profile, previously successful expert is having a rough time then those industry variables, ratings, form etc, are really kicking the bounds of our experience of normality. The evidential data suggests that the downturn was unusual.)
So, ‘Ethics’, where do I put my money or which system do I follow?
I mentioned about taking a step back and looking at the bigger picture. I do this once a month for this blog and the preset systems but also for my own TBM portfolio. I update their performance and make some decisions based on a set of rules as to which systems I follow for the next month.
With the disruption to racing over the last year, interpreting the available data can lead to a little indecision so those rules are not entirely set in stone yet.
Things I look at:
- All available data – Grand Total
- 12-Month data – Total
- 6-Month data – Total
Do the three points above look normal?
- Last 2-months – Total
Are they both profitable? And look ‘right’ – not too high, not too low?
- Are there any obvious recurring monthly deficits
Is January/July always a loss? Is it a system that only works for summer/winter racing
- Statistical analysis of all data and 6-month data
Does the data stand up to basic statistical test of variability etc
If your stats are not up to scratch, looking at a graph provides a lot of information
As an example, here’s the graph of the preset mentioned in Blog #2. This shows the 6-month data for Agreement. I’m looking at the Win returns for this.
I’ll be the first to say it doesn’t look good.
Anyone jumping on board with that last November and continuing to follow would have seen an initial high point bounced around and eventually wiped out completely with a severe down turn.
Looking at the longer-term data shows a slightly different picture, still not great but lets look at a few details.
Overall, some profit but inconsistent and ultimately a large drawdown from the peak.
Looking at some of the features, there is a nice profit gain between July and November highlighted with the large green ellipse (Flat season influence?) but still with a serious drawdown and recovery in October shown in the smaller red ellipse.
So, that’s what it looks like, but should I be following it?
If I was following it when do I pull back and watch?
On the next graph I’ve highlighted the last 6-month periods. These would be the dates in the last 6 months that I would try to apply the rules I talked about above.
- At Review point 1 (Nov 2020) +36 point in October
The system has been trending up for the last couple of months
There was that October blip but appears OK and in profit.
I’ll continue following.
- At Review point 2 (Dec 2020) +12 points in November
In profit for the month but some drawdown from peak
I’ll continue following.
- At Review point 3 (Jan 2021) +3 points December
Flat month but previous 2 OK
I’ll continue following.
- At Review point 4 (Feb 2021) -4 points January
Seeing a trend in monthly return
+36, +12, +3, -3. Starting to think about reducing stakes.
Continue to follow but at reduced stakes.
- At Review point 5 (Mar 2021) -12 points February
Monthly downward trend continues.
Deceptive month because it initially looked like returning to normal, but the steepness of the downturn is worrying.
- At Review point 6 (Apr 2021) -73 points March
- There is no need to review: A look at the graph and you are not going to follow that in its present form.
I mentioned this in the previous issue of the blog that I thought the ‘Agreement’ system may be a summer system. As yet, it is not recovering. However, the team at TBM have provide some extra tools to help us discern monthly or seasonal changes and trends.
More data may be needed to fully make use of them, but the options are there to view analysis by quarter and by odd/even month. (More on that in the next instalment).
Also, Month is now available as a criterion setting.
To summarise the exercise I’ve just gone through in relation to my ISA investment and how I followed the tipster:
The ISA is passive, I’ve put my money in and it ticks over and at the end of the time period I take the profit or loss. The way I followed the tipster was also passive.
The TBM systems can also be passive. I could set them running let it tick over then come back after a time and take the profit or loss.
For ‘Agreement’ since Oct 2019 the %ROI is about 2.35%, more than many savings accounts.
Personally, I want to see more profit, so I need to interact with some systems to get the best from them. That sweet spot period July to November returned a %ROI of 19.8%.
Obviously, the ideal situation is to have a suite of systems that can be set to ‘passive’ and return 20% routinely.
At the moment I don’t think that is possible and the evidence of industry professionals is reinforcing that view. So, for now we need to find a few working systems and monitor them fairly closely.
With that in mind my intention is over the next few months to find a few presets which go beyond being purely examples of what can be done and produce a small group of ‘WorkHorse’ presets.
These will have a higher strike rate, lower edge and lower ROI but will hopefully be ‘turn on and forget’.
Right, that took a bit longer than I thought it would!
I am going to post the blog this month in two parts: This is the first and I’ll come back in a few days with the promised review of presets and new features.
In the meantime, go away and have a look your trends and see what you come up with.
Looking forward to seeing your homework and a few comments.