So sorry for the lateness of the post. It's all down to having to deal with the politics involved when running an U10 football team and having to grade the players into A, B and C teams. The kids are fine - it's the parents with the problems!
Anyway, if you'll forgive me, I'll miss out the month to date figures tonight. I need to go to bed!
I was asked a question on the blog last week:
Hi rowan i have question to ask. I have two services both with the same recommended bank. I have 5000 euro bank for each and the recommended bank for each is 75 points. Is it enough to divide 5000 by 75 or do i have to do more calculations based on the number of selections each service usually has per year to work out my bet per point.
This is the sort of question I am asked most frequently. I've been quite set in my approach to this issue, but have recently changed my outlook and methods.
First, the way I tackled this issue up until very recently...
I would work out how many points you could expect each service to stake over a typical year (would have to look at historical records and accept you're never going to get it spot on). I would have a fixed amount in mind as to how much cash I would want to stake with each service in my portfolio, each amount being equal. I would divide the total desired amount staked by the number of points each individual service are likely to stake over the twelve months and that would give me a £/pt value. Times the £/pt value by the number of points the bank should be to give you the size of bank for that service.
Example: Service A stakes an average of 100 points per year. I want to be staking about £10k per year with each of the services in my portfolio.
I divide £10k by 100 points, which gives me a £/point value of £100.
The recommended bank size for this service is 25 points, so my bank is £2,500.
Service B stakes an average of 200 points per year. Using the same calculations, my £/pt value equals £50. Recommended bank size is 80 points. Bank for this service would be £4,000.
And so on for each service in the portfolio.
The theory behind this approach is that the balancing of stakes across a period of time between each service, means that if one or two services have a shocker, they shouldn't disproportionately drag the whole portfolio performance down. In essence, the damage one service can do is controlled.
There is a lot to be said for this. My own approach is a cautious one. I see monthly turnover lying between £10 and £20k, and gasp a little inside. That's a lot of money to me. Being gambled. Therefore, anything that reduces risk or exposure can only be a good thing. This method of staking and bank management takes advantage of the diversity that a well constructed portfolio should offer, to minimise the risk of wipeout. It maximises the chances of staying in the game, and there's a heck of a lot to be said for that.
However, the other way of doing things, is to have the same set bank for each service, as described in the question above. To answer the question, I would simply divide the 5,000 euros by the number of points recommended bank size (ie. 75 in this case) to give you a point value of 66.66 euros - I'd possibly round up or down for ease. Provided each service had a proven, long term edge, then I wouldn't worry about the number of bets each service recommend. Yes, you do run the risk that a bad run for the service with the higher turnover would quickly drag down overall performance, but if you look at the ROC a service produces in addition to the ROI, to my mind at least, this becomes a less important factor, provided of course the number of points recommended for the bank has been well researched and represents a safe amount.
Why do I say that? Well, in my portfolio of 14 services, only one of them is "unproven" (and that's not really - it just hasn't been monitored by the SBC). The others have all been operating for at least two years, have proofed to the SBC, have been through both good times and bad and have treated the two imposters the same, and have demonstrated that their edge is real. Put like this, and having started to place more importance on ROC (thanks to Graeme's musings over at TFA), I have changed from the approach above whereby the staking for each service is equalised over time, to devoting the same sized bank in cash terms to each tipster.
By having the same cash bank for each service, you can see much more clearly the strengths and weaknesses of the individual constituent parts of the portfolio in one very important way - how much cash profit/loss they make/lose you. This sounds almost stupid in it's simplicity, but believe me, it's an important point. Forget turnover, strike rate, levels of roi or any other parameter of measurement you might choose to use - doing it this way you can see immediately where you're making your money (or not). Do this, and then the next stage of portfolio management can far easier be achieved...ie. weighting the stakes.
Anyway, I feel like I'm getting a bit bogged down here now, which won't do at all. So I'll stop. Any queries on what I said, or if you think it's a load of old baloney, that's what the 'Comment' section is for. Don't be shy.
Ok, the quickest round up ever. Tiny loss on the day. Summer of Football (0/1), Sportyy (1/1), On The Nose (0/3), and Service X (2/2).
That's yer lot. Laters.