How do You Come up With the Right Predictions?
If your predictions aren’t any good then obviously you will not be able to be a successful punter. But how do you develop the judgement skills to allow you to win? Here’s an example of good judgement: Leading into the 2004 Olympics 4 by 200 metre men’s freestyle swimming relay Australia were firm favourites. They were defending champions and world record holders and were led by the great Ian Thorpe. However, the Americans were also pretty good and some question marks existed over the form of some of the Australians. I decided to to a bit of digging and looked up each swimmer’s best 200 metre time for the preceeding year. The results indicated that, on this measure at least, America were actually somewhat the stronger team. My memory of the exact odds after 5 years is not 100% certain but they had Australia at something like $1.50 favourites and America at $2.90 (the rest of the field were much longer). I decided that America should actually have been slight favourites and were good value at $2.90 so I backed them and they duly won by about 0.9 of a second. There is much to learn from this example. (Indeed I wish I had paid more attention to some of the lessons over the intervening time – in which case I wouldn’t have to delve back 5 years to find an example of a great prediction!) Firstly, relevant facts are paramount. There is nothing like cold, hard facts, so do your homework and objectively assess the facts, taking emotion out of it. Next, remember that reputations and hype count for nothing – just because Australia had Ian Thorpe, one of the greatest swimmers of all time, did not mean they were automatically going to win. Importantly, note that I backed the USA because of the value, not because I thought they were certainties. Had the odds been reversed I would have kept my money in my pocket. However, had Australia been at say $4.00 I would have backed Australia, because at $4.00 they would have started to represent value. Even though this would have been a losing bet, the logic behind it would have been correct. Remember, you can’t expect to win every bet. A hidden lesson is not to get too sure of yourself. I had quite a large bet on the USA but I could have chosen to have more. Some people would have seen the times and said ‘America can’t lose’ and would have put all their money on them. Never do this. There is no such thing as a certainty. Ultimately America did win, but only by a very few inches – it could easily have gone the other way. It is also crucial that you don’t see value when it is not there. Because bookmakers need you to lose and thus stack the odds against you and because generally the weight of money is fairly accurate, situations where real value exists are quite rare. Be patient. Don’t just put a bet because you feel like it, unless you are just betting for fun and not to win. Don’t ‘fall in love’ with a prediction and stick to it even after you unearth reasons that cast doubt on its accuracy. A good method to test yourself is, before you put on a bet, passionately come up with an argument as to why your bet will lose. Then ask yourself if you still think the bet is good value and only go for it if the answer is still a resounding yes. A few other miscellaneous points to finish up on: - Pre-race the experts were unanimous in their predictions: Australia was going to win. This shows that just because someone puts on a suit and has a microphone stuck under their nose doesn't mean they necessarily know any more than you do. Return from predictions to professional gambler
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