This Jack Taylor explanation can make you a better investor on the sports markets, here's why:
[A THREAD]
credits @IB_Redeye
#41 Jake Taylor on Deep Survival
[A THREAD]
credits @IB_Redeye
#41 Jake Taylor on Deep Survival
1/
"The odds are implied often in the price of something to happen"
In this case for example the market thinks that Brentford have a 50% chance of winning the match so Brentford's price is 2.
"The odds are implied often in the price of something to happen"
In this case for example the market thinks that Brentford have a 50% chance of winning the match so Brentford's price is 2.
2/
"So you're not looking for the surefire winner, necessarily, of the race. You're looking for mispriced bets within that."
As an investor YOUR objective is not to find out who will win the match but whether Brentford's chance of winning is 50% or not.
"So you're not looking for the surefire winner, necessarily, of the race. You're looking for mispriced bets within that."
As an investor YOUR objective is not to find out who will win the match but whether Brentford's chance of winning is 50% or not.
If Brentford's chance of winning is actually 80% and you bet on Brentford regardless of whether Brentford win this particular match you should be profitable in the long term as the price does not reflect Brentford's odds.
3/
"Number two is that you want to always try to make sure that you're getting attractive odds in whatever it is that you're doing."
Here Jack Taylor basically reminds us of Keynes' wise words:
"It is better to be roughly right than precisely wrong"
"Number two is that you want to always try to make sure that you're getting attractive odds in whatever it is that you're doing."
Here Jack Taylor basically reminds us of Keynes' wise words:
"It is better to be roughly right than precisely wrong"
Continuing with the Brentford example if you think the fair odds are 1.90 you shouldn't bet on Brentford as the difference between 2 and 1.90 is minimal.
On the contrary you should bet on Brentford if you think the correct odds are for example 1.50.
On the contrary you should bet on Brentford if you think the correct odds are for example 1.50.
4/
"Well, we're fooling ourselves if we think that in the messy real world of business and investing that we know the exact odds of success versus failure enough to ever really use a true Kelly bet. So we need to back off from that a lot to allow for us to have errors."
"Well, we're fooling ourselves if we think that in the messy real world of business and investing that we know the exact odds of success versus failure enough to ever really use a true Kelly bet. So we need to back off from that a lot to allow for us to have errors."
Just like in the business world, in the football world anything can happen:
- Red cards;
- Injuries;
- Goalkeeper errors;
- Referee errors;
- Etc
So we should bear in mind that NO ONE knows the exact odds of whether Brentford will win or not.
- Red cards;
- Injuries;
- Goalkeeper errors;
- Referee errors;
- Etc
So we should bear in mind that NO ONE knows the exact odds of whether Brentford will win or not.
5/
"They get overconfident and they bet too big on single things and it ends up blowing up in their face and they're mortally wounded by that."
Everyone knows it's likely Arsenal will win the game, however, that's not why you should bet all your money on Arsenal winning.
END
"They get overconfident and they bet too big on single things and it ends up blowing up in their face and they're mortally wounded by that."
Everyone knows it's likely Arsenal will win the game, however, that's not why you should bet all your money on Arsenal winning.
END
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