Applying the principles of investing to betting

Financial Investment and sports betting have much in common and, in truth, they are not always truly distinguishable from each other: They both carry a certain amount of risk and reward; They both require analysis; They both assume some sort of initial outlay. Yes, it must be pointed out that betting, unlike financial investment, should be viewed as a recreational activity, but the discipline behind both remains the same. Put simply, apply the same practices to betting as financial investment to increase your chances of success.

Do your research and do the math

We live in a world that is increasingly run by data. Numbers are crunched for everything from general elections to the probability of smashing a taillight on your car on the way home from work. The data available for sports can tell a similar story. Sports people love statistics and there is a huge amount available out there. They are, of course, invaluable when it comes to betting on sports. The data can be wrong about a single event, but never wrong over time.

The opportunity comes when you learn that some bookmakers work purely on exchanges, following the money rather than probability of an outcome. Often these betting trends are governed by emotion. For example, every four years in the UK lots of money is placed on England winning the World Cup by ‘patriotic’ punters, thereby potentially deflating the odds for England’s success. Fifty years of ‘laying’ England would have returned a tidy profit by now. Thus, with an exchange you have the opportunity to go against majority consensus if you think it is unjustifiably biased towards a particular event.

Pick the right middleman

Obviously, if you invest you are going to carefully choose the person who manages your money. Other than trustworthiness, factors like commission, potential returns, management style and past results will all influence your decision. The same rule applies to picking a bookmaker. There are lots of options out there, many of which are tailored specifically towards the way you like to bet.

Some bookmakers offer betting options which can be anchored towards how you approach risk. For example, those who like something of a safety net can use ‘cash-in’ functions before the event has ended. Another way is the idea of bet insurance, sometimes called Acca Insurance. Bookmakers like William Hill Promotions offer the incentive of a returned stake, payable as a free bet if one selection loses from an accumulator of five or more.

William Hill Promotions

There are no sure things, thus rewards can follow risk

Nothing is certain in betting or finance. If a new event occurs, it happens without precedence. Without precedence, data can tell us little or nothing about it. Weighing up the risk and reward of the unexpected is key in all types of investment. Think of those investing in Bitcoin only a few years ago. Think of those weighing up whether to bet on a Patriots’ comeback at half-time of the last Super Bowl. No precedent, but big rewards for those taking a risk.

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December 21, 2017 Applying the principles of investing to betting