Offbeat "value" idea, boxing?

[writser]

This weekend Mayweather will be in the ring vs. McGregor. Mayweather should be a huge favorite afaik, yet McGregor is super popular and a lot of 'retail money' is flowing his way. Seems like a setup where the odds are potentially a bit skewed. Some bookies are reportedly having problems hedging their action, see for example:

 

http://www.espn.com/chalk/story/_/id/20407149/gambling-how-floyd-mayweather-conor-mcgregor-fight-alarming-vegas-oddsmakers

 

https://seekingalpha.com/news/3291838-vegas-bookmakers-exposed-mcgregor-upset

 

I'm a total clown when it comes to boxing and this match has been all over the news, I don't have any special insights. But Mayweather is paying out 1.25x and that seems generous given the situation. Mayweather has a professional record of 49-0 and McGregor hasn't boxed a single match in his life (only MMA). I'm probably putting some money on the line, for fun and for profit. Given my lack of expertise I'm debating whether it should be a) a very insignificant amount or b) slightly more.

 

Anybody else? Or am I falling for the sucker play?

[clutch]

I feel like many boxing matches are rigged so would never bet on them.

[Jurgis]

OT? I prefer GLOW ( http://www.imdb.com/title/tt5770786/ ).  8)

 

 

Can't invest in it though...

[Patmo]

I have a friend who took on everyone at 1 for 1, he was betting on Mac... So you could bet a grand on Mayweather with him, turn around and bet 400 or something on McGregor and win either way. Pretty good "arb opportunity" but I didnt see the guy in a while and it would have been scummy to actively seek him out just to take advantage of his faith in the irish dude.

 

And yes, 25% return on investment in Mayweather is +EV for sure. Nowhere near as much as Holly Holmes vs Rondha Rousey, but a good spot nonetheless. Im keeping it small ball

[no_free_lunch]

Yeah they can be rigged but for fun what the hell.  I would put money on McGregor.  Huge payout 4.25x.  He hits hard and is 29 vs Mayweather at 40.

[Lance]

Interesting thread.  I don't follow boxing, but one of my partners is an avid watcher and says the only unknown amongst the boxing set is whether McGregor will be seriously injured (brain damage, death, etc.).

 

Thanks

Lance

[LanceSanity]

I think it's a really good bet to put money on Mayweather. Even at 40 years old, Mayweather would school great fighters with no pro boxing experience. McGregor doesn't have the fast twitch muscles to catch Mayweather with good shots. Unless Mayweather boxes with one hand, McGregor has no chance.

[no_free_lunch]

Don't forget it is 8 oz gloves and McGregor's style is heavily focused on striking.  I read he actually started out boxing.  The guy held 2 titles simultaneously in UFC and has shown to be very adaptive.

 

It's gonna go Mcgregor with a knockout in the first 6 rounds.

 

Not many people thought BAC would pull through either.

 

;) Don't take this too seriously.  I'm rooting for Mcgregor but I don't know much about boxing.

[Gamecock-YT]

Floyd is going to clown this guy. It's going to be a super boring fight, like the usual Mayweather fight. He'll score points and get out of danger. He wouldn't take the fight if he thought he would lose, he cares more about his legacy than another 200MM

 

If ya'll want to watch a REAL top notch fight rather than this 'show', GGG vs. Canelo on September 16th. Both are knock out artist, could be decided by just one punch.

[ukvalueinvestment]

How much does the bookie take.  The "bid/offer" will be appalling.

[TBW]

I too had been considering this 'value investment' for the past couple of weeks.  While I try to avoid gambling on sports (because I am terrible at it), this seemed too good to pass up.

 

First, I renewed my bodog account.  They gave me $10 free dollars for doing so.  Another promotion offered $20 free dollars for depositing money (start of football season promotion).  I deposited $100 and bet all $130 on Mayweather.

 

My upside is $34.67, while only risking $100 of my own $$$'s.  That means that MacGregor needs to have a 35% chance or better for this bet to be dumb.  While anything could happen in one fight, I think realistic odds of MacGregor have to be less than 3%.

 

If I win I plan on withdrawing all funds.

 

Wanted to highlight the free money you can get for opening an account, and how this improves your odds, to those interested.

 

Good luck

[writser]

Yeah, if you put in the work I'm sure you can find some decent bonuses. I saw Pokerstars gave you a $25 refund if Mayweather loses. Sites like oddsmonkey probably have dozens of other offers. Nice job on the side for the students among us.

 

I'm too lazy for that, maxed out my credit card on Betfair.

[sjh]

yesterday i opened an account with one of those betting firms just for this fight. today i am wiring my money (incl. 25% winnings) back to my bank account.  :) this firm also gave me a bonus for opening the account. unfortunately this bonus cannot be paid out directly, but can only be used for bets where the odds are above 1.7 (or -142 if i understand the american odds system correctly) they obviously want me to take a lot of risk with that free money (which i don't want  8) ). does anyone know a blog or some other source where smart people are posting about sport events where the odds are massively in ones favor?

 

btw: it is interesting to see that the odds for mayweather went up to 1.28 (28%) directly before the fight. it looks like the bookmakers had to take on some insurace to protect them in case of a mcgregor victory. http://www.oddsshark.com/boxing/floyd-mayweather-vs-conor-mcgregor-boxing-betting-odds-tracker

[writser]

Usually odds aren't that easily exploitable, the system is pretty efficient, just like the stock market. I assume you have received a free bet where your initial stake is not returned? In that case, the best strategy is to bet on a big underdog somewhere & hope to get lucky. I.e.:

 

payout 1.2x, implied odds 83%, bet $25 you win $5 83% of the time, expected payout: $4.17

payout 2x, implied odds 50%, bet $25 you win $25 50% of the time, expected payout: $12.50.

payout 10x, implied odds 10%, bet $25 you win $225 10% of the time, expected payout: $22.50.

 

That is, assuming the odds are fair. You can lock in your profits by laying the same bet on a betting exchange, google 'matched betting'. Oddsmonkey had a nice tool to show you what bets on a particular site were the best cash in your free bets but you probably have to have a paid account for that. Maybe there are some free alternatives.

 

Betting action on this fight was crazy. Some interesting tidbits from an ESPN reporter:

. Wouldn't surprise me if the odds on this were skewed but what do I know... Reportedly even Mayweather tried to bet on himself: http://www.espn.com/chalk/story/_/id/20472005/floyd-mayweather-tried-bet-fight-conor-mcgregor .

 

Fun stuff. Saw a recap from the fight and looked like a smooth victory. Will put some food on the table for the next few weeks. Would be cool if some experienced/pro sports betters chime in, I'm sure there are a couple on this board.

 

edit: or did you receive a bonus with rollover requirements?

[eclecticvalue]

So..... Writser, how much money did you make? or what's the ROI?

[sjh]

Writser, thanks a lot for the matched betting hint, will try this to get the bonus. Did some research today and already have enough of sports betting. stock investing is just so much more rewarding, both financially and intellectually. in addition the bookies can lock you out of the system basically whenever they want. will close my betting account again asap (and maybe reopen in a few years for another big event like this  :) )

[writser]

There is definitely some money in bonus whoring though, a nice way to start a bankroll if you are a student or something. But it doesn't scale very well and the playing field is not level - bookies will try to screw you if you're not a regular punter. I'm sure the statistical / analytical approach of sports betting can be profitable too (probably scales better as well) but I'm no expert on that. I don't think it's easy.

 

I placed a small 4 digit bet for a ~20% gain after exchange fees, fx fees etc. Again, I don't know anything about boxing. I also didn't like the heads-I-win-a-bit / tails-I-lose-it-all characteristics of the Mayweather bet. I guess more people thought that way, which might be another explanation for possible skew in the odds (apart from the massive money flow to mcGregor). Seems risky to short the huge underdog.

 

Was it a smart bet? I'm not 100% convinced. But it was fun :) .

[John Hjorth]

...Was it a smart bet? I'm not 100% convinced. But it was fun :) .

 

writser,

 

-To me, you really need to do some work on your board appearance.

 

We don't buy it any longer, you calling your self "I'm a poor guy, basically doing nothing". You seem to me to be everywhere where there is rock'n roll and blood in the street, and always walking away with a nice gain in a very short time.

 

Now, that boxing bet tops it all. [How is that taxed at your place, by the way?] - Good that you had fun, too! [ : - ) ]

[writser]

Thanks for your kind words but let me assure you I don't always walk away with a nice gain. Floyd has to keep boxing for a few more centuries before I recoup my losses in maternity clothing, amongst others ;).

 

With regards to gambling taxes: that's a huge mystery here. As far as I know 1) online gambling is illegal for me but 2) I have to pay 29% taxes over winnings unless 3) the illegal online casino has its HQ in the EU. There are running lawsuits, counter-lawsuits, etc. etc. It's a big clusterfuck, our gambling laws are still from the 1960's and the state-owned casino doesn't want to give up its monopoly (they argue they are afraid that will lead to 'irresponsible gambling' ...). I think I'm doing everything by the law - if you see some posts disappearing in this topic I've changed my mind!

 

How does it work in the Nordics?

[Jurgis]

I'm sure the statistical / analytical approach of sports betting can be profitable too (probably scales better as well) but I'm no expert on that. I don't think it's easy.

 

In Fortune's Formula (page 322-325 hardcover) there's a story of Ed Thorp's crowd making multimillions in sports (horce racing mostly) in 1980s using stats and Kelly. Not clear if inefficiencies are still there on large scale. Like the author says, if someone finds inefficiency that can make millions they are smart not to talk about it.  8)

[John Hjorth]

...With regards to gambling taxes: that's a huge mystery here. As far as I know 1) online gambling is illegal for me but 2) I have to pay 29% taxes over winnings unless 3) the illegal online casino has its HQ in the EU. There are running lawsuits, counter-lawsuits, etc. etc. It's a big clusterfuck, our gambling laws are still from the 1960's and the state-owned casino doesn't want to give up its monopoly (they argue they are afraid that will lead to 'irresponsible gambling' ...). I think I'm doing everything by the law - if you see some posts disappearing in this topic I've changed my mind!

 

How does it work in the Nordics?

 

lol, I don't have clue, writser,

 

I don't consider my self a gambler.

 

I have a hunch about where to start, though, to find the answer, for Danish citizens.

 

I considered Danish tax law just soo dull at the university - I had absolutely no clue about what to do with that dull stuff then - just soo boring.

 

I remember my tax professor in the first lesson telling all us students: "The Danish tax system is basically based on the ground principle of the ability of the entity to pay taxes. Now, that took me less than 30 secs to teach you that. The rest of this course, we will focus on all the exemptions."

 

I also remember that the tax text book had a separate section about "random earnings", as some kind of residual section [outside the whole "logical" tax system], picking up a desription of how "all the rest" is taxed, such as gains on lottery tickets, income from prostitution and such.

 

- - - o 0 o - - -

 

I mean, isen't any order intake in any business - at least to some extent - random?

[writser]

Small update post-mortem. It was difficult to find back this topic. Interesting read about the "the betting event of the decade", Mayweather vs. McGregor: https://www.espn.com/chalk/story/_/id/28366850/the-betting-event-2010s-mayweather-vs-mcgregor .

 

Despite Mayweather's disappointment, Sigsbee and other professional gamblers enjoyed one of the best betting opportunities they'd ever experienced. Bookmakers were so inundated with money on McGregor that they gladly accepted money on Mayweather, anything to help reduce their liability.

 

"It didn't matter," said Jason Simbal, who at the time of the fight was vice president of risk for Las Vegas sportsbook operator CG Technology. "There was not enough sharp money to bet Mayweather to hedge people's decisions. They had bet all their money already."

 

Fun read, recommended. There are other ways to make money besides value investing.

[Cigarbutt]

Small update post-mortem. It was difficult to find back this topic. Interesting read about the "the betting event of the decade", Mayweather vs. McGregor: https://www.espn.com/chalk/story/_/id/28366850/the-betting-event-2010s-mayweather-vs-mcgregor .

 

Despite Mayweather's disappointment, Sigsbee and other professional gamblers enjoyed one of the best betting opportunities they'd ever experienced. Bookmakers were so inundated with money on McGregor that they gladly accepted money on Mayweather, anything to help reduce their liability.

 

"It didn't matter," said Jason Simbal, who at the time of the fight was vice president of risk for Las Vegas sportsbook operator CG Technology. "There was not enough sharp money to bet Mayweather to hedge people's decisions. They had bet all their money already."

 

Fun read, recommended. There are other ways to make money besides value investing.

Null hypothesis here: I'm stupid (possibly more than 99% of the times).

I disagree on the premise that professional bettors (ie smart money) are fundamentally different from value investors and wonder if Mr. Ben Graham did not do the value crowd a disservice when he drew a line between investment and speculation when, in fact, it should perhaps be appreciated through a spectrum.

 

If you dissect the simple part (analytical or handicap part) from the easy part (temperament or crowd part), professional bettors focus a lot more on the easy part and typically have a short term horizon on individual bets. It is interesting to note that sharp money often ends up with the "losers" in a contrarian way as the bet decision is based on a perceived mispricing of the odds. It seems to me that most value "investors" aim to beat the house more than 52.4% of the times and changing emphasis on the simple or easy part (just as reducing the strike price zone with the baseball analogy with its effect on the simple part) may move you along the spectrum. Moving the handicap bar higher may require more 'concentrated' bets and comes with the risk of looking stupid much more often but that's OK.

 

Disclosure: Part of me would love to avoid watching box or ultimate fights but the other part loves to watch even more. I am not a bettor kind of person and will not volunteer my preference since this is a first post in the thread but the Mayweather-McGregor encounter was certainly interesting from a sentimental point of view.

 

The following may be interesting:

https://www.valuewalk.com/2016/09/steven-crist-value/

[Guest cherzeca]

@cigar (and others)

 

know any good literature on the "Kelly criterion"?  reading fortune's formula now by Poundstone. TIA

[writser]

Isn’t that supposed to be the “good literature” on the Kelly criterion? Or do you want something more academic? In that case I’d simply start at the Wikipedia footnotes.