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Money ManI would like to thank TwoMinuteWarning.com for asking me to write this column. Money Man will address matters concerning managing a bankroll, deciding how much to wager on a certain play, setting your wagering objectives, understanding the balance between risk and maximum monetary growth, and other topics of discussion relating to money management in the sports betting arena. This column will not touch on what strategies to employ in selecting what wager to place, nor will it discuss the specific games and teams involved in this season's National Football League. There is obviously ample handling of those subjects elsewhere on this web site, by much more informed eyes than mine. There have been several messages forwarded to me which contained requests for particular research that I will try to answer in the ensuing weeks. There is also an e-mail address set up for me to which you can write: moneyman@twominutewarning.com
Last week was spent considering ways to tell if you truly have an advantage in a gambling game. This is a tricky point and undoubtedly the undoing of many sports gamblers. A good streak is common for even the worst football picker and yet has no great portending of future success for that person. Even someone who does have some level of skill in beating the spread might easily overestimate the future winning percentage attainable. Frequently we are our own worst enemy, remembering the winning bets but overlooking or not counting the losing bets properly. Perhaps the worst point is that there can be no guarantee after even a substantial number of wagers that the advantage will continue at the same rate for betting on a sporting match is not a static event. Markets may become more efficient, new information may be provided and developed that allows for more sophisticated understanding of cause and effect, and the play of the sport may change over time. Suffice it then to say that downplaying your results will likely shield your bankroll in the event your subsequent wagers are not as successful. Assuming you have sufficient confidence in your abilities to go ahead with your wagering plan, the next step is to create reasonable expectations for what may transpire. Professional football is a short season from the standpoint of the number of games played versus other major sports. The National Football League season consists of thirty-one teams playing sixteen games each, with eleven additional playoff games. This is a grand total of 259 games. Baseball season is 2,430 games long with some number of playoff contests. Professional Basketball consists of 1,189 games of regular play and many extra playoff contests. Therefore with football betting you will be encountering less opportunity for the long term averages to take effect and more exposure to undue streaks of both good and bad fortune (this assumes the ratio of bets to total games is fairly constant for you in all sports). Example: a player with a 58% winning rate against the point spread makes exactly 100 bets per season. If he bets precisely $22 on each wager, what range of season wins/losses might he see? While this can be calculated accurately, to make a more life-like set of numbers I will run a random trial for "fifty" years (and blessed are those who are 'in action' for longer than that)
Best Year: 68-32 (68%) + $656
Winning Years: 40/50 (80%) Median Year: 57-43 + $194 Compare this to a 1000 year life-cycle:
Best Year: 75-25 (75%) + $950
Winning Years: 848/1000 (84.8%) Median Year: 58-42 + $236 Even with a fixed 58% winning percentage a player was likely to have a losing season almost once in every six tries. Reasonable expectations using a 95% confidence scale (excluding the bottom and top 2.5% of events) would be to expect from 47 to 68 wins and anywhere from a $236 loss to a $656 profit. These numbers may seem small for the amount of effort necessitated: deciding which team to bet, making the trip to the casino to place the bet, returning to collect the winnings. For the player wagering $2200 on each bet the effort may seem less intrusive: expect from $22,360 in losses to $65,600 in profit!
The message then is how unpredictable all of this becomes. Example: a player thinks he wins 58% of the time but really is only a 54% winner. He expects to win 58 out of 100 bets for a $236 profit. What are his actual chances of reaching this level of profit? Once again rather than presenting the pure mathematical odds, I will run a 1000 year trial.
Best Year: 67-33 (67%) + $614
Winning Years: 622/1000 (62.2%) Median Year: 54-46 + $68 Years winning $236 or more: 242/1000 (24.2%) Almost a quarter of the time the player will meet or exceed his expectations and continue to think he is a 58% winner. More likely is that the player experiences results below his expectations. The question then is how does he react? Human nature being what it is, there are many possibilities from feeling he was unlucky, blaming himself for not concentrating as hard in selecting the bets, changing his mind and thinking he isn't a 58% winner, blaming the players or the league or fixed games, or countless other explanations we make for ourselves. The message is we will always live in the dark as to the true reasons behind our gambling success and failure. This is not grounds to be depressed, for all of life is a gamble! Just remember that no matter how strong your conviction in your ability to select winning wagers, there will always be a high level of unpredictability in what actually takes place in your life's events. Accept this and you are ready to move on to next week's column where we will lay down concrete goals for a season and set up a money management approach to give yourself the best chance of reaching them.
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