Last week Mark (of The Patient Speculation blog) who is getting his Portfolio Lite up and running, asked the following question:
"What should be more important to the portfolio investor: staking so as to maximise profits or to defend our banks?"
Well Mark, the answer to this - and this is not a cop out, I promise - is that if you get your staking right then it should automatically lead to both the protection of your bank and it should give you the best chance possible of maximising your profits.
I have already discussed the factors to take into account when determining the appropriate size of your bank, and by setting it up in this way (ie. roughly twice the size of the relevant service's lengthiest historical drawdown) you should have an adequate buffer against the worst that the gambling fates can throw at you. Hence the 'Protection' box is ticked.
Following on from this, the 'Maximising of returns' box should be ticked quite naturally. If the service you are following has a long-term edge, then the idea is to simply ensure that you stay in the game. AT ALL COSTS. If you stay in the game, then when the edge that your service enjoys manifests itself in tangible profits, you will be benefiting from it. Assuming you worked out the projected returns based on historical roi achieved prior to subscribing, and you therefore know that when this level has been hit you will be clearing a profit acceptable after the deduction of fees (if it doesn't, then why were you subscribing in the first place?), then by staying in the game, you will ultimately maximise your profits simply by ensuring that you are in there when you should be. If your bank is too small, and you go bust, you won't be in a position to rake in the profits when they eventually arrive.
Mark was obviously drinking deeply from the well of curiosity last week. Not content with asking just the one question, he followed up with another...
"My next question is: what level of knowledge do you have to have about a sport before adding a tipster from that sport to your portfolio?"
To answer this one, I can only turn to Andy, who in response to this sent in an answer that sums up my own feelings to a tee and makes the relevant points in such a succinct way it can't be bettered. So I shan't try.
"I feel this is down to an each individuals comfort levels again.
To me, as long as i know what the area/sport is and the basic nature of the sport, it doesn't bother me how much or little i know about the area/sport.
The reason for this is because the tipster has to have a proven record for providing profitable tips. To me it is an investment at the end of the day and not an interest. If it was purely for interest i would treat it as a hobby (which i don't).
Some people though, may only be comfortable staking on sports that they know about. I knew nothing of darts players last year, but i know the sport (if you can call it that) and the basics of it, yet i subscribed to a well thought of and proven tipster because it had great potential to make me money.
To me, if its a well run tipster service and shows good results over the long term i am happy to subscribe."
Spot on, Andy.
There seems to be a lot to talk about at the moment, so I'm going to do my March review bit by bit, looking at two or three services each day. In any month when I make a trading profit of £1k or more (before fees), then I can't complain. At £1,098 for March (roi of 7.74%) then I would describe the performance as average. Not great, but not too shabby either. Certainly an improvement on what had preceded it in 2011.
ProBandit: Staked 23.275pts, +3.829pts, roi 15.08% (2011: staked 84.125pts, +0.678pts, roi 0.8%)
A much better month for ProBandit. Call me clairvoyant, but my comments in the February review for ProBandit included this statement: "perhaps Paul is beginning to rediscover his mojo...I have high hopes for ProBandit in March". And so it proved. Not a spectacular month for Paul, but solid and consistent, just as I like it. The service starts March more or less level for 2011 so far, so let's hope that this is really the start of it's year and that more consistent profits are just around the corner.
Winning Racing Tips: Staked 13.8pts, +7.578pts, roi 54.91% (2011: staked 47pts, +7.337pts, roi 15.61%).
WRT was the most profitable and best performing (judged on roi achieved) racing service in March, hitting an astounding 55% roi. This is the sort of service where real patience is required. The last six months or so had really been a case of standing still, but as I mentioned in last month's review, sometimes standing still is a good thing. It can put you in a position where you can really reap the benefits of the good times, and a good run is certainly something WRT enjoyed in March.
Chasemaster: Staked 12.125pts, +4.459pts, roi 36.78% (2011: staked 36pts, +7.679pts, roi 36.78%).
You know I've really enjoyed Chasemaster this last month. With the exception of one bet (which placed and produced a small return) they steered clear of the madness and mayhem that is Cheltenham, and simply got on with what they are good at...and they were very good at it in March. I have got used to the service now and have settled into a nice rhythm with them. The only thing that remains is for me to get the staking right as I feel I may just be understaking them a tadge. I'm not making any adjustments just yet, but it is something that I have my eye on. A small rise may be necessary, we'll see.
An underwhelming day today. Five racing services in action with none bombing out but four of them each contributing small losses which added up to equal an unpleasant loss at the end.
The only successful service was Northern Monkey whose only tip finished third (Ajjaadd - Windsor - 11/2) and thus produced a very small profit.
ProBandit did actually find a winner (Ya Hafed - Folkestone - 9/2) but with other results ended with a small loss.
Winning Racing Tips gained a return on an each way double, but also had one finish out of the frame so another small loss there.
Firing blanks this afternoon were On The Nose with two small win bets and Chasemaster with one small each way selection.
Northern Monkey: Staked 0.75pts, +0.14pts.
ProBandit: Staked 1.75pts, -0.375pts.
Chasemaster: Staked 0.25pts, -0.25pts.
On The Nose: Staked 1pt, -1pt.
Winning Racing Tips: Staked 1pt, -0.448pts.
Total financial loss on the racing of £74.07.
Monday 4th April: Staked £180, -£74.07.
Week to date: Staked £180, -£74.07.
Month to date: Staked £2,803, -£878.99, roi -31.35%.
Right then. Likely to be fairly late posting over the next couple of days. Will be hooked to the Champions League footie.