Friday Plays

GordonGekko · Jul 10, 2009

Took a little bath yesterday as I didn't buy out of a couple and got some bad lines. Played some over night lines with little research and 3 of 4 gone opposite of what I bought.

I looked at Duke at a bargain, Saunders at home, and Haren at home. Stayed with the Sox as Lester has been dominant. Middle of order for Sox are killing the run production and bullpen not performing up to par. However, Red Sox players have hit Bannister extremely well. Took RL as well even though not Plus money.

Youkilis 375
Ortiz 375
Lugo 750 expect him in lineup
Ellsbury 500
Drew 444

What do you see today?

Buffett,

I wish I saw your posts but was at a colleague's house watching the games. Damn..had Dodgers, St. Louis, and Tampa..Needless to stay none of the dogs came out barking leaving me in a ditch. You know how it works. Another day...

buffettgambler · Jul 10, 2009

Yesterday was one of those days in which the teams you bet did not win, but the price you bought them at, and the market agreeing with you allowed for hedging, reduction of risk, and profit nonetheless.

My biggest bet on the overnights was the Cubs +124 (looks like I got the peak price on this one). I valued the Cubs as favorites in this one, and books simply jumped the gun by overpricing a solid pitcher in top form against a pitcher in a prolonged slump and dealing with possible injuries. The market appears to agree with me, with a 22% buy down on the Cubs, sending them to even money, and possibly favorites. I still think they are currently undervalued and the market price, but will be looking to sell some of my +124 by buying the Cards at even money.

I am going to have to disagree with you on Duke being a bargain. I actually went the other way on the overnight, getting in on the Phillies at -154. Although I did not get the bottom on this one, it does seem like I will beat the non-vig close, as the market appears to agree with me here. What we have with Duke is a pitcher that ran into a hot streak, has shown regression in performance, but not regression in his price tag oddsmakers put on him. He has been much more hittable in recent starts, opponents have increased their well hit ball ratio against him, and his incompetence against left handed hitters have also increased. All variables you do not want against a potent Phillies lineup appearing to be on the onset of an upward trend, playing in a bandbox, and are loaded from the left. Blanton is coming off a solid June, and started July with a shutout. Oddsmakers and market particpants have shyed away from him all season. Now it looks like it is only oddsmakers that continue to devalue him.

I am going to have to disagree with you on Saunders as well. This is not a good match up for him. Firstly, a groundball pitcher who has allowed six home runs in his last 8 innings pitched is a sign something can be wrong. The Yankees have hit him well in the past and fundamentally match up well against his style. The Yankees have won 13 of their last 15 and have not done it with a lot of smoke and mirrors like the Angels recent run. Chamberlin is coming off a start in which he mentally fell apart on the mound after being backed by poor defense. I think this is a good time to back him in a bounce back start away from a New York crowd that he feels more pressure pitching in front of. I bought the Yankees last night at -121. The market has been bouncing back and forth with line moves in this one, and probably has yet to find the equilibrium pricing.

I am feeling pleased with my overnight bets that I placed. 6 of the 9 are currently better than the non-vig price, 1 worse, and two within 2 cents of the current market price.

Best of luck today.

GordonGekko · Jul 10, 2009

Buffett,

Bought back on the Yankees..

Do you believe that the Twins showed a serious sign of what they are against a tough Yankees team? I know Danks has had some success vs them do you feel that he can hold them in check? I see Blackburn and not too sure about him. He started out weak from the gate, however he's steadily decreased his ERA throughout the season.

I'm not willing to give up on the Indians quite yet and with Betancourt coming off the DL, it should help them with some bullpen relief. I felt like Lee was a good play today as well.

I'm pretty sure that I'll be betting against Toronto again as well.

I didn't even see what happened in the 10th run 8th inning yesterday.

With the current movement do you see any value left on the table? I like Baltimore, Cleveland and possibly San Diego.

GEKKO

buffettgambler · Jul 10, 2009

The Twins have always been a tough team that plays better than they appear to be on paper. But they are simply a .500 team playing .500 ball, and were outmatched by a much better Yankees team. Today's Twins game possesses two pitchers pitching on top form. The question is which pitcher whose current performance the market is overreacting to. I entered a small position on the White Sox last night at +115. I currently value them at +106. I think Danks is a better pitcher who also has put forth a more impressive run. I am just not sold yet on Blackurn being priced as the tier pitcher he is being priced at.

I entered a pretty decent size play on the Indians last night at +143. The line has dropped significantly since them. Lee has not been undervalued of late, and this appears to be a play against Jackson and an overpriced Tigers team.. At the current price, I still deem them undervalued, but obviously not as compelling as the priced bookmakers put them at.

The Blue Jays game I am not touching. I valued the Orioles at -104/Blue Jays +104 with high valuation error risk (thus a high required margin of safety) due to both young pitchers being hard to price.

There was much more value on the table last night compared to tonight. Even with some significant line moves (like the Cubs and Indians) they both appear be slighly undervalued still.

Teams in which I undervalued last night and the market has not picked off any value are the White Sox and Yankees.

I entered large positions on the following teams that market picked off value on: Cubs, Reds, and Phillies

I entered medium sized positions on the following teams that the market picked off value: Indians and Padres

I put a small play on the Mariners last night at +114. The market picked off all excess value, and will buy back prior to first pitch.

One game in which I bet the overnight, but the market appears to be adding value (and I will probably add to my position) is the Braves. The market appears to be really bullish on the Rockies right now, but so are oddsmakers. In my opinion, the market is bidding up an already inflated line. Lowe does come with his risks, as it appears to be more than just a slump is the stimulus behind his recent regression. But at this price, he is well worth the risk.

Gordon Gekko said:
Buffett,

Bought back on the Yankees..

Do you believe that the Twins showed a serious sign of what they are against a tough Yankees team? I know Danks has had some success vs them do you feel that he can hold them in check? I see Blackburn and not too sure about him. He started out weak from the gate, however he's steadily decreased his ERA throughout the season.

I'm not willing to give up on the Indians quite yet and with Betancourt coming off the DL, it should help them with some bullpen relief. I felt like Lee was a good play today as well.

I'm pretty sure that I'll be betting against Toronto again as well.

I didn't even see what happened in the 10th run 8th inning yesterday.

With the current movement do you see any value left on the table? I like Baltimore, Cleveland and possibly San Diego.

GEKKO

buffettgambler · Jul 10, 2009

A material change in my fair value on the Cubs due to line up information, dropping my fair value on the Cubs down 8 cents. I just bought back 65% of my exposure I had on the Cubs +124, buying into the Cards -103. Due to the semi-hedge, I have medium sized bet on the Cubs +160.

GordonGekko · Jul 10, 2009

buffettgambler said:
Yesterday was one of those days in which the teams you bet did not win, but the price you bought them at, and the market agreeing with you allowed for hedging, reduction of risk, and profit nonetheless.

Buffett,

What are your suggestions for hedging? For example...Say I buy 1000 stock of San Diego (+240), 1000 of Texas (+167), 500 Washington (+104) and 500 of Boston (-195).

Thanks...

GordonGekko · Jul 10, 2009

buffettgambler said:
A material change in my fair value on the Cubs due to line up information, dropping my fair value on the Cubs down 8 cents. I just bought back 65% of my exposure I had on the Cubs +124, buying into the Cards -103. Due to the semi-hedge, I have medium sized bet on the Cubs +160.

No Soto or Bradley..

buffettgambler · Jul 10, 2009

Gordon Gekko said:
buffettgambler said:

Yesterday was one of those days in which the teams you bet did not win, but the price you bought them at, and the market agreeing with you allowed for hedging, reduction of risk, and profit nonetheless.

Buffett,

What are your suggestions for hedging? For example...Say I buy 1000 stock of San Diego (+240), 1000 of Texas (+167), 500 Washington (+104) and 500 of Boston (-195).

Thanks...

Click to expand...

It is totally dependent on the handicappers risk/return objectives and utility function. There are a lot of handicappers out there that will sugggest not buying back a good number, as you are betting a team you deem to have -EV. Although such a suggestion holds merit, as this approach will maximize nominal EV on an expected game, handicappers with logrithmic utility function looking to maxmize bankroll growth will bet in fucntion to Kelly adjustment reccomendation, which will reduce the variance and increase bankroll growth expectations.

Are you referencing yesterdays games in those price assumptions? The apropriate buy back according to Kelly(are those with logrithmic utility) would be dependent on the following:
-The original percived edge
-whether there was a change in your intrinsic value after you placed your original bet and prior to the close
- your kelly ratio
- the price at time of close(or at the time you want to hedge).

GordonGekko · Jul 10, 2009

buffettgambler said:
Gordon Gekko said:

Are you referencing yesterdays games in those price assumptions? The apropriate buy back according to Kelly(are those with logrithmic utility) would be dependent on the following:
-The original percived edge
-whether there was a change in your intrinsic value after you placed your original bet and prior to the close
- your kelly ratio
- the price at time of close(or at the time you want to hedge).

Click to expand...

Yes those would be yesterday's price assumptions.

Edge in Seattle? I would perceive a 60 - 40 or 20 percent edge (personal opinion)

No change in Intrinsic value

Kelly Ratio: I know it but if it comes out to 3.6% what does this mean?

Price of close 167/159

GordonGekko · Jul 10, 2009

Buffett,

Kelly is big on picking winners and money management? How do you determine winning percentage?

buffettgambler · Jul 10, 2009

Gordon Gekko said:
buffettgambler said:

Yes those would be yesterday's price assumptions.

Edge in Seattle? I would perceive a 60 - 40 or 20 percent edge (personal opinion)

No change in Intrinsic value

Kelly Ratio: I know it but if it comes out to 3.6% what does this mean?

Price of close 167/159

Click to expand...

For fully kelly bettors, the 3.6% represents the % of ones bankroll they would risk on that particular game. For partial stake bettors, one would use their multiplier towards that 3.6 (i.e: quarter kelly bettor would risk .90% of their bankroll).

There is a wealth of information on Kelly all over the web. The reason why I am hesistant to reccommend it on a handicapping forum is that most people are unable to accurately quanitify their edge to a point in which will allow Kelly implementation to maximize their bankroll growth. Often times, pickers are more concerned about their money management system and over consume their time with that instead of improving their handicapping model that would increase their ability to quanitify their edge and also spending time on getting the best number possible.

Taking one of your examples on the Mariners today. Assume you calculated you had a 20 cent edge on the overnight line of +110 (thus your intrinsic value is -110). Quarter Kelly bettor would risk 2.23% of their bank on the Mariners overnight. Using the current matchbook pricing (not including commission for simplication) the correct buy back would be .47% on the Rangers -106.

buffettgambler · Jul 10, 2009

Gordon Gekko said:
Buffett,

Kelly is big on picking winners and money management? How do you determine winning percentage?

Kelly is big on accurately deteriming ones edge and implementing the appropirate risk/return to mazimize bankroll growth.

How do you deteriming winning percentage? That is what handicapping comes down to. Nothing more, nothing less. All the talk about pitchers, bullpens, lineups, current form, intangibles, fundamental, situational matchups, umpires, weather (and anything else) sole purpose is derive the winning percentage of each team better than oddsmakers and aggregate market can. Sadly, forums are filled with "pickers" that just don't understand this concept, are more worried about bold letters and big titles, allowing this concept to escape people looking to improve their knowledge.

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