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Having fun, writing about the stuff I like

All that Glitters

Oscar Foulkes July 11, 2010 Uncategorized No comments

Rudyard Kipling’s If is – I believe – one of the world’s great summaries of life wisdom. And, judging by the number of framed renditions I’ve seen on the walls of homes from a certain era, I’m not alone in admiring those masterly lines. The problem is that these adornments have been rendered in copper, embroidery and various other media so unfashionable that the assassination of the messenger also killed the message.

Today, I am looking solely at the lines:
“If you can make one heap of all your winnings
And risk it on one turn of pitch-and-toss,
And lose, and start again at your beginnings
And never breathe a word about your loss.”

I’ve always thought these lines imply a nonchalant, high-stakes wager on a yes-no type outcome, which is not the type of gambling risk I like to take.

Before the World Cup started, I wrote (here) about my attempt at making soccer interesting, by making a few carefully considered wagers via the Betfair platform. Barring the final to be played tonight, the World Cup is now over. So, how did I do?

My outright win bet on Portugal was laid off before the Spain round of 16 match, leaving me square. I forgot to lay off my win bet on Italy in their final group match, which cost me £10. And, continuing my PIIGS strategy, I was square on Greece getting eliminated by finishing third. So far, so good. My elimination-3rd position strategy made me money on Chile and USA, and left me square on Denmark.

I backed the 90-minute draw between USA and Ghana because I had win bets running on both sides, and laying off either side would have been a zero-sum outcome. Another profitable result.

While looking at this bet I started looking at a variety of other Betfair markets, particularly the relationship between the 90-minute draw, and methods of victory (i.e. extra time or penalty shoot-outs by either side). I set up a little spreadsheet that – I thought – outlined the perfect no-loss bet; the elusive dead-cert. A Sure Thing.

If I layed the draw, and then bet on each of the extra time victory methods, I’d be in the pound seats; both literally and figuratively.

As I delved further I had to concede there was something Dan Brown-ish in the way I was searching for angles (no, not angels, angles) no-one else could see. When a really strong side met a less-favoured one (e.g. Argentina vs Mexico) the Argentina ‘win to nil’ was a likely probability. I could lay the ‘nil’ result at odds-on (i.e. risking a lesser amount to win a larger one). To cover the potential liability I bet on the correct score (i.e. 1-0, 2-0, 3-0, 4-0, and greater). The odds of some of these could be as great as 12-1, so they offered relatively cheap cover against the odds-on lay.

I constructed a rather beautiful spreadsheet, I thought. My model was guaranteed to make me 2%, no matter the result. I then fine-tuned the system by laying the Argentina ‘clean sheet’ instead. Now I could make a guaranteed 5% (or more) regardless of outcome.

I got really, really excited. I even went so far as calling the system my “money machine”. I worked out that compounding 5% would allow me to double my money in 15 ‘goes’. If I did this every month, within 10 months I could go from £200 to more than £100,000. I’d never had any interest in soccer, but hey, if this was a way of making money, why not? For that matter, I’d never considered the possibility of living the life of a professional gambler either.

Except this wasn’t gambling. I was simply exploiting a mathematical mis-match in the probabilities of individual nil-scores and a ‘clean sheet’.

The first match in which I applied this system was Argentina against Mexico. I made my expected profit. So, too, in the Netherlands vs Slovakia match.

As this match came to an end I rushed to get my bets onto Brazil vs Chile. If I was going to have Einstein’s magical power of compounding on my side I needed to take every available opportunity to get my money working.

I watched the game at the fan park on the Grand Parade in Cape Town, enjoying each of Brazil’s three goals, feeling dispassionate about the outcome. This was the correct emotional state for the gambler with mathematics on his side.

Later, at home, I logged into my Betfair account. Instead of a larger balance, my funds had actually shrunk. I couldn’t understand why I had lost money. Then the penny dropped (or was it the pounds?). My spreadsheet was inaccurate, in that it failed to take into account the cost of the losing bets on the correct score.

For the same reasons, the spreadsheet outlining the ‘draw and method of victory’ model was also wrong. In this case the fault was masked by my winning bet on the Ghana-USA draw. The goals by Mexico and Slovakia had similarly masked the inaccuracy in my spreadsheet.

I have to admit to a certain degree of disappointment that my fortune would need to be made another way, but I think I’ve done pretty well in applying these lines:

“If you can meet with Triumph and Disaster
And treat those two impostors just the same”

I began the process without any interest in soccer and have ended up enjoying watching several of the matches. I got totally caught up in the fan walk from the centre of Cape Town, along Somerset Road, to Green Point. I have soaked up all the wonderful emotional energy around the event.

FIFA trademarked anything with the vaguest connection to the World Cup. Perhaps the widespread adoption of the makarapa and the vuvuzela – both untainted by FIFA trademarks – were a rebellious response to FIFA’s attempts to ‘big brother’ the event. At the end of the day, what made the World Cup great were the tens of thousands of people who attended matches, watched them at fan parks, or listened on car radios while driving. Human spirit, collected on such a grand scale, is the greatest show on earth.

That, Mr Sepp Blatter, is something you do not own. You can bet on it.

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