Market Timing - Important for Sports Bettors too!

In the investment world, it's not uncommon for folks to talk about market timing and the importance being 'in' the market at the right times has on your investments.

According to JP Morgan, if you invested $10,000 in the S&P 500 on Jan 1, 2000 and left it alone until Dec 31, 2019 (20 years), you averaged 6% return per year and had $32,421 in your account. Pretty nice gain through all the ups and downs of that 20 year period that included Sept 11, 2001 and the great recession of '08-'09.

If you missed just the 10 best days in that 20 years (0.1% of the days) you would only have $16,180 for a 2.4% avg return! Taking it one step further, if you missed the 30 best days, you would have $6,749 for a -1.9% return.

It's very unlikely that you'd be so unlucky that you would just happen to miss the very best days in any market, but the point is valid nonetheless... you need to be invested when positive variance occurs.

Sports betting markets work exactly the same way. I've always treated sports betting and my bankroll like an investment and it's served me very well to do so. To further illustrate this point, I'm going to use an actual example of our SoccerPicksClub VIP service over the past 4+ months.

SoccerPicksClub: A case study

Since SPC inception (Dec 2020 through March 7, 2022) VIP members are +95.7 units.

August and September 2021 were our poorest 2 month stretch by far at -15.5 units combined. There were a few frustrated members, no doubt. We were frustrated too, but variance like that always will happen at some point! Let's create a hypothetical member who was so upset that they stopped following our plays at that point.

October turned out to be our biggest month by far in 2021. We were +41.7 units! We earned back all the losses from the prior 2 months and added another 26 units of profit on top. That member who faded us after a down period didn't get the opportunity to ride the positive variance back up and locked in (realized) their losses. Members who stuck it out had long since forgotten about the 2 poor months and were focused on the great year of gains.

The hypothetical member who faded us for October now sees our successes and decides to hop back in for November (This isn't uncommon if we are being honest. People jumping in at end of a hot stretch and leaving after a cold one... the exact opposite of what should occur). Over the next 3 months of ups and downs, we would lose a little (-3.9 units total). Now fuming, this hypothetical member leaves again, this time vowing never to follow SPC again!

February 2022 comes along and we even out-perform our ridiculous October, +41.9 units in that 28 days alone! And early March results have added +5.3 to that number... for a total of +47.2 units that member never got to see.

• Member who faded in Oct, followed in Nov-Jan, faded in Feb-Mar (+6.6 units)

• Members who stayed in through it all, treating it as a long-term investment (+95.7 units)

The path to profit in sports betting, much like any other market investment isn't a straight line

Taking it to the next level

(This section is only for seasoned bettors with high risk tolerance and strong bankrolls)

The sophisticated investor understands that after negative variance occurs (down market) the decision isn't to fade/sell (lock in losses). It's actually to increase unit size (buy more). With more than 2,000 bets in our sample size, SPC has a 54.3% win rate at average odds of -110. The sample size is pretty sufficient to feel good that 54% will end up being close to our long-term winning rate.

During that poor Aug-Sept stretch, we won only 50.4% of our plays. A significant deviation from our mean. And the sample size for this regression was more than 300 plays, so not small. The sophisticated bettor might have taken this opportunity to increase their units heading into October on the premise that a strong progression to the mean was coming. It might not happen right away, but over the long-run it's bound to occur unless there have been changes in the way games are being selected, which there was not.

Let's assume this hypothetical bettor was $100 per unit up to this point. And now they decide to increase to $150 per unit. This would be just the same as those who bought more and more stocks at the bottom of the great recession (or are buying right now quite frankly) instead of selling off and locking in huge losses like so many unfortunately do / did.

October: +41.7 units = $2,085 of additional profit ($50 extra X 41.7)

Now we've hit our expected progression to the mean. This is when a sophisticated bettor or investor will drop back down to their original unit size. After the next 3 months of just middling results, it wouldn't be shocking to see them increase to $150 again just in time to catch the tremendous February results!

February: +41.9 units = $2,095 of additional profit ($50 extra X 41.9)

It's not possible to perfectly predict exactly when we've reached the bottom and that progression will begin or when we've hit the top and some regression is due. But it's not hard to use data to make solid decisions if you have the risk tolerance and bankroll to do so.

In our personal betting portfolio, we use increasing units after bad sustained runs to maximize our results. It's important to make sure you are only doing this with trusted long-term winners and a great bankroll strategy.

Treat sports betting like a long-term investment and it will treat you well

See you at the window!

Contact us for interest in joining our VIP service or any inquiries

Nate - SoccerPicksClub

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