After years of successful struggling, I've realised that the house always wins and if you can’t beat them you should join them. Or at least that's what I'd like to find out.
There are several things I want to see over the next year:
1. Does the house always win over long term?
2. If so, what is the maximum yield plausible while minimising risk?
3. Can it out-perform alternative investments such as the global stock markets?
The Geeky stuff:
My general view is that the house will win over the long term, that is to say the returns will be positive after a season long series of 'laying' the team I believe will lose. ('Laying' is effectively playing the bookmaker in the betting scenario. I will offer another gambler odds on a sporting event. For example - Manchester United vs West Brom I would in most circumstances believe Man Utd to win, therefore I would place a Lay bet on West Brom. In this scenario I minimise risk by effectively betting on 2 of the 3 possible outcomes – Man Utd win and a Draw - accepting a lower return on my money than if it were a straight Back bet, and I will see a positive return unless West Brom win - which is the third possible outcome and what I'm betting against.)
The basic strategy for the 'fund' I will run, will follow a basis of approximately 5 lays per week. I may increase this number but will rarely go under that figure to minimise risk by diversifying my bets.
The starting fund will be £100 which will be an easy figure to gauge Year To Date (YTD) performance on and is a large enough sum to split the fund into 5 units of £20 for an individual Lay.
I will be measuring the returns over the next year against the MSCI World Index which will be the most accurate way of measuring performance of world equity markets (N.B. This will be interesting in the second part of the next year as many forecast world equity to drastically out-perform most other investments). The fund will be absolute return and will not include capital gains tax which currently sits at 18% in the UK. I will produce two results at the end of the year to see if the fund can outperform the MSCI World Index (TRN) with or without capital gains tax as a factor.
I believe the universe of possibility to be vast as, if successful, this could be expanded to a purely Large Cap (Premier League), Mid Cap (Championship) and Small Cap (League One below) universe. It could be split by region to include European Football fund or individual countries (although local knowledge would be too much of a factor). It could also have novelty funds whereby you could pick 5 teams over the course of a whole season and Lay every opponent over the course of the season.
