Settle in. This could be a long one.
I don't know about you, but I am always thinking and planning for the future of my gambling. I have an ambition, an end-game or target if you like, but feel that I am still learning in terms of the best way of getting to where I want to be. To be honest, I want to learn. I believe that the moment you stop learning is the the moment you start going backwards, and that isn't something I want to do.
At some point in the relatively near future, a point in time that lies somewhere on a timescale covering the next couple of months to the next couple of years, I am going to have more funds at my gambling disposal. When this happens, gambling and trading is going to play a much more significant part in my life than they do at present. That's not belittling the role and importance of the income I currently generate from the portfolio - long term readers know what started me off on the gambling path and why it is I depend to an extent on this secondary income. But things are going to be ramped up, which in turn means that I must alter my mindset and methods of investing, changing my priorities slightly in terms of how I go about utilising the portfolio to squeeze the maximum from it. In short, gambling/trading will become less a profitable pastime, and more a full time business.
With this in mind, I have been analysing the way the portfolio is currently set up and have drawn two conclusions.
1. I am going to need to reduce my risk exposure (insofar as this is possible bearing in mind that any speculative operation has to, by definition, carry a level of risk that cannot be avoided); and
2. I am going to need to try to minimise the effects of variance on my capacity to generate as steady an income as possible (which is of course, closely linked to No.1).
Before we explore these points further, I just want to take a step backwards for a moment, and try to put all this into the context of making as much money as possible. You may remember me quoting a phrase on the blog a little while ago that I first heard from Graeme Dand (The Football Analyst) - "ROI for show, ROC for dough".
What Graeme was driving at is that at then end of it all, what really matters more than anything else is how much profit we, as investors, make. It's all very well shouting from the rooftops that an ROI of 20% was achieved over the last twelve months, but ultimately if the ROC over the same period equated to 20% (ie. the bank was turned over just the once) then the fact is that you wouldn't have made as much money as you would, had the roi been just 5% but the bank turned over several times. A bank of £10k turned over once each year but yielding an ROI of 20% gives the investor a profit of £2k per annum (20% ROC). A bank of £10k turned over ten times each year and yielding an roi of 5% gives the investor a profit of £5k per annum (50% ROC).
Obviously these figures are a little simplistic and things aren't that clear cut in real life, but you can see the point I'm making. So what does it mean going forward?
It tells us that turnover is key, assuming of course that what we are using to generate the turnover does possess an edge on the book (all this theory goes out of the window of course, if we're following tipsters who can't produce a profit, but let's assume that we're working with good tipping services here). It also tells us that the significance of ROI is lessened considerably, and the importance of ROC increases massively. It tells us that we need to be exploring ways to ensure that our portfolios are maximising the potentially achievable levels of ROC; in other words, our portfolio needs to be making the money devoted to it by means of a betting bank work as hard as it possibly can for us.
That's the theory, but how can we take steps towards making this a reality? It is here that I return to the two conclusions I made and mentioned above. Not only are we now concentrating more on maximising potential ROC levels and increasing betting turnover, but we are at the same time trying to reduce risk levels and the potential effects of variance. Increased turnover, generated through services that are proven to be profitable and which use a high number of bets to achieve their aims (and so turn over their bank at a good speed), should help the investor to meet all of these targets.
Let me use The Football Analyst System 7-22 as an example to illustrate my point. As you know, I am a disciple of this system, and from amongst the smorgasbord of systems offered on the TFA platter, is the sole UK system I picked out to follow this season. It hasn't let me down either, now running along rather nicely. But the fact is that it filters out a lot of the bets from the other UK-based established systems and the number of bets over the course of a season is going to be relatively limited. I'm not doubting the system's ability to turn an exceptional profit, nor to achieve a highly impressive ROC, just has it has done thus far, but with limited bet numbers it is susceptible to variance. Anything slightly out of the ordinary in terms of negative variance could potentially have a distinct adverse affect on a season's betting performance, despite that variance representing just a tiny blip in the grander scheme of 7-22 things. Which is fine when in my current position, but when considering a future change in circumstance in which overall, betting is going to be ramped up, does it not make sense to reduce that potentially erosive affect of variance by adopting more TFA systems, thus producing more bets, which will in turn work through the cycles of variance much more quickly? I'm sure that this principle is a massive part of why Systematic Betting is so successful...high and fast turnover. Losing runs and drawdowns are just as deep, but are over and done with much more quickly.
All this is not to say that I am going to be radically altering the make-up of the portfolio. I'm not. Despite what I have just said, I still see an important role for the lower turnover services that utilise specialist knowledge to create and exploit an edge. The likes of Skeeve will remain as integral constituents of the portfolio. Skeeve's edge is based on the acquisition of knowledge and of becoming more expert on the Blue Square Premier League than the traders that work for the bookmakers. The Sportsman exploits markets that perhaps are not given the same attention by the traders as are the 1-2-x markets. What these services provide of course, is diversification, an important element within any portfolio that is balanced to minimise risk.
However, I do wish to considerably up my turnover via football betting (because I can get bets into the market via Pinnacle and SBO), and the easiest way to do this is via proven, profitable systems based on ratings. I have The Football Analyst of course, but I can reveal that as of now, I am adding Football Investor to the portfolio.
I mentioned a few days ago how wrong I was to fail to renew my subs after a poor season in 2011/12. It was a repeat of a mistake I had previously made with On The Oche and I am without an excuse, because the circumstances that led to each decision were almost identical. So, a slap on the wrists for me (that's the problem with writing a blog - mistakes are there for everybody to see and laugh at!).
Stewboss, the chap whose service is Football Investor, has transformed the offering made to subscribers. There are now more systems, more bets, improved returns; it's not hard to see why, in the context of this post, why I am now so attracted to it. Football Investor can now play a large part in raising my overall portfolio to where I want it to be, it is as simple as that. Ally this to a wider TFA system portfolio for next season, and to another series of ratings-based football bets that I pick up from a private forum (these will be known as GB bets to appeal to the pariotic amongst you!), and you can see how my betting turnover is going to go up significantly. When you consider that Summer Of Football is relatively high turnover and that the new approach adopted by Football Elite has led to an increased number of bets, then you can see that I am going to be a busy boy. Ultimately, you deserve nothing to my mind, unless you're prepared to work for it. If working harder leads to more money coming in, and to what that means in the wider scheme of things, then it has got to be worth it. Hopefully, I'm not only going to be working harder, but also smarter.
I want to round this post up by thanking Stewboss. Quite rightly in my opinion, he doesn't take on monthly memberships, and he has closed the service for the season for obvious reasons. He has allowed me to jump on board though to enable me to see just how much workload I can take on in readiness for next season. I'm playing the bets this month and then will sit down to work out my FI portfolio for 2013/14, although I already have a pretty good idea exactly what that will be.
I'm excited. Without going into detail, life is going to get pretty interesting. Like I say, events may happen very quickly. They may take longer to materialise, possibly even a couple of years, but the one thing I know for a fact is that they will, at some point, happen. When they do, it will be all systems go (heh! - no pun intended). I'm very aware however that I need to prepare myself as well as I can and take steps now to gear the portfolio up to exactly how I want it moving forwards. Bringing Football Investor back in to where it should never have left, and targetting overall ROC as opposed to ROI, is a big leap towards that end.
Now I know this is rather low calibre of me, but to be quite frank, I really can't be arsed totting up the points totals for each service from Friday through to Sunday. I'm going to have to start sticking up a quick results post on the Saturday and Sunday I think, because come the Monday, it has become a chore.
All you need to know for the weekend just gone is that it was a crap one. The only services to avoid making a loss was Skeeve - and the profit here was minimal - the aforementioned GB bets, and Winning Racing Tips which had a winner on Friday (Romantic - Dundalk - 9/2). Every other service either lost or didn't provide bets. Adding everything up, the overall deficit was pretty sizeable.
More worryingly is that all of a sudden, the bookies are putting the squeeze on. I have to seriously consider whether continuing to follow 4PA is at all practical and getting the stakes on each of the last three Winning Racing Tips has been problematic. I understand that the nature of the races targeted by WRT are such that you might expect difficulties, but up until now, I've never had too much of an issue. I get the feeling that some of my remaining horse race betting bookmaker accounts are on their last legs, and if so, is a real problem in the making.