The Sure-Bet Formula …

When it comes to betting, the smartest move you could make is to eliminate risk. The sure-bet formula is about eliminating risk – while still making a certain profit. It is true that the amount of risk to reward is interrelated. The sure-bet formula shows you how to eliminate risk.

True, with the Sure-Bet Formula, the risk is extremely low or completely risk-free – if you apply the formula exactly. And with a risk-free approach to sports betting you’d certainly expect the returns to be conservative.

In point of fact, this is exactly our approach with using the Sure-Bet Formula.

1. To eliminate risk, but also …

2. To compound our returns over time, and …

3. To instil knowledge & discipline (this one is, in my opinion, the most important quality a professional punter must adopt)

Our objective with using the Sure-Bet Formula is not to gamble … where the potential for wins and losses are greatest. Instead, our objective is to make 2%, 5%, 10% or more guaranteed and risk-free – each and every time we bet.

Now 2%-10% or more may not seem like a lot of return. 5% p.a. in a bank account would be a very low risk proposition. The higher the risk the greater the potential returns, and for the potentially higher returns the share market is certainly one option. The downside is, when the share market, or any other high risk / high return investment, goes down 50% … it takes 100% returns over time to get your original investment back.

Consider 5% per week or per month in the light of what you’ve already seen in chapter 1. Conservatively, I use 2% as an average daily or weekly return – while maintaining our three primary objectives (above).

The Sure-Bet Formula is about eliminating the risk, while compounding our bankroll over time. It’s not a get-rich, flash-in-the-pan scheme normally associated with high risk gambling. But rather, it’s a plan that will grow your bankroll over time.

Furthermore, the Sure-Bet Formula is a simple set of instructions. A Formula – that if followed, will result in certain profit every time you use it. Don’t be fooled by thinking it’s too easy … no formula is worth anything unless … you apply the knowledge & discipline.

Enough said!

Here’s the Sure-Bet Formula:

(1/A) + (1/B) < 1.0

Where A = Favourite, and B = Underdog.

How does it work?

Simply take the best odds being offered for the Favourite and the Underdog, and divide each into 1. If the result is less than 1.0, you then have a sure-bet. Which means backing each side (and hedging your bets) will make you a risk-free and guaranteed return.

The formula works the same regardless of how many possible outcomes there are. If a drawn game (outcome C) is a real possibility, then the formula is: (1/A) + (1/B) + (1/C) < 1.0.

Shop Around…

The catch is, don’t expect to find one bookmaker offering odds that produce a sure-bet outcome for you. Shop around and find the best odds on offer and work these into the formula. You’ll most likely have to find 2 or 3 bookmakers to make the formula work.

Now that you’ve seen the formula, and have a particular bet amount in mind the question is: How much do you stake on each?

The Sure-Bet Staking Formula is:

(stake/A) + (stake/B) < (return on either outcome)

Where ‘Stake’ = Total Amt You Want to Stake, A = Favourite, and B = Underdog.

Imagine two teams are playing against one another, and one of two outcomes are possible.

The Favourite (A) is paying $1.70, and the Underdog (B) is paying $2.80. For the purpose of this example, we’ll use a stake amount of $100. This is our target amount we want to have returned.

The question is, how much do we stake (in total) to receive $100 ‘risk-free’? Remembering also, our total stake in the first place ‘must’ be less than $100 to make this worthwhile.

We have identified the above example as a sure-bet using the formula.

(1/1.70) + (1/2.80) = 0.95 (rounded up)

Which means for every 0.95c we stake, we are guaranteed a risk-free return of $1.00, or a 5% return.

By the way, the formula for working out your % return is, in this example, 1/0.95 = 1.05 rounded.

Back to our example: Favourite is paying $1.70, Underdog $2.80, and the amount we want to ‘get back’ is $100.

Using the Sure-Bet Staking Formula, the calculation is:

(100/1.70) = $58.82, and (100/2.80) = $35.71

Add these together: $58.82 + $35.71 = $94.53.

In other words, in order to get a guaranteed return of $100.00, you would need to stake $94.53 to achieve a 5.78% guaranteed return.

Try getting those returns in a single day or week from a bank!

Whole dollars…

Since most betting outlets require whole dollar amounts when placing a bet, we will round the figures in the above example to $59 and $36.

$59 + $36 = $95 (i.e. Your total stake)

If the favourite wins, we collect $100.30 (i.e. $59 x $1.70)

If the Underdog wins, we collect $100.80 (i.e. $36 x $2.80)

Our return is: 5% (i.e. $100 divided by $95 x 100 = $105 (approx.)

What does this mean?

It means that if you back both sides you are certain to receive a return on investment of 5%. Which means for every dollar invested, you receive a certain, guaranteed, and risk-free profit of 5%.

Now 5% may not seem like a huge amount. But consider a 5% return in the same light as you would in chapter 1. How long would it take, at these returns, for you to double you money? And remember too, it must comply with all three of our primary objectives.

Remember also that one bookmaker will not offer you a sure-bet opportunity. For this you’ll have to shop around and get a few quotes. Get the best quote on offer.

Can you now see the wealth potential in this formula?

The Sure-Bet Formula: (1/A) + (1/B) < 1.00, and

The Sure-Bet Staking Formula: (stake/A) + (stake/B) < (return on either outcome),

The same formula applies to every sure-bet outcome, whether there are 2 or 3 possible outcomes. In some sporting events, like Test Cricket or Soccer, there is a real possibility of a third outcome (a draw).

The formula would be: (1/A) + (1/B) + (1/C) < 1.00

Still the same formula, except you just add to it as required.

Tournament events work the same way (where you may have 10 or more contenders). However, finding Sure-Bet Opportunities in tournaments would require a lot more work. For an alternative, but riskier approach, see the section on ‘Pricing Your Own Markets’ further on into this manual.

Back to our Example:

Team 1 is paying: $1.90 (bookmaker A)

Team 2 is paying: $5.75 (bookmaker B)

And a draw is paying: $3.60 (bookmaker B)

Notice two different bookmakers (A & B) are used to get the best odds on offer, and required us to shop around.

Team 1 (1/1.90) = 0.53

Team 2 (1/5.75) = 0.175

Draw (1/3.60) = 0.28

Total (0.53 + 0.175 + 0.28) = 0.98, or (1/0.98) = $1.02 (return for every $1 we invest)

A 2% return no matter what the outcome. If commissions are payable on profits, the figure will be slightly less. Regardless, you still come out with a Sure-Bet.

Note: If you’re using a betting exchange, chances are you’ll be paying up to 5% commission on winning trades. Which is why, if you’re using the sure-bet formula on betting exchanges (or any other place that charges commission for that matter) you should be aiming for a higher return (in this case 7% or greater).

If we had $100 to stake, the amount required to stake on each possible outcome is:

Team 1 (100/1.90) = $53

Team 2 (100/5.75) = $17.50

Draw (100/3.60) = $28

Total amount staked is: $98.00, to receive $100.

In the above example, it may be worthwhile spending time to get a return of $1.02 if no transaction fees apply. 2% sure-bets come up all the time and if you have the time they are certainly worth considering.

You see, there will be many times when they come up, and when they do, there is nothing worse than having no, or very little working capital on hand.

My advice is … develop a set of procedures for dealing with working capital and returns before you place your first bet.

As a rule, keep some capital on hand for 5% sure-bets recognising the fact that 80% of your working capital will be on taking advantage of 2% sure-bets. Sure enough, you’ll get many 2 and 5% opportunities come up, only you want enough capital on hand when those 10 to 20% opportunities appear. And although they come up sometimes, you want to be prepared.

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On Investing…

“You are neither right nor wrong because the crowd disagrees with you. You are right because your data and reasoning are right” – Warren Buffett

What stands out, perhaps more than anything else, about Warren Buffett are a set of principles that are well tested and tried. Principles that he sticks to which are unwavering in the light of market opinion. Not because the market says so, but because of the data and reasoning that supports this view.

The market may disagree and sell a particular stock short – although a short-sighted opinion. This is where the well seasoned professional can identify value. A stock that’s worth $30 a share, but is selling for, say, $20 may well represent excellent value.

I believe the same principles go for the well seasoned sports punter as it does for the investor. A winning chance (which is backed by sound data and reasoning) may be valued at $4.00, a 25% (or 3/1) chance. Now, let’s say the market’s opinion of this ‘chance’ is $7.00 (or 6/1). In effect the market overall is saying it should come in around 14% of the time.

It stands to reason that providing your data supports your view of a ‘25% chance’ accurately enough you can expect to make money over the long run.

Of course you wouldn’t stake 100% of your capital on a certain 25% chance, would you? Nor would you wager 25% of your bankroll to a certain 25% chance?

For more on this have a look at: ‘Calculating your edge’, and ‘Winning and Losing Streaks’

Winning and Losing Streaks…

Following the last posting about Probability and Price, it’s probably wise to consider winning and losing streaks.

Winning streaks are good, yet the caution is – every winning streak comes to an end. You see, it’s tempting to believe a winning streak will continue, and as a result of this belief the undisciplined punter will parlay larger amounts in an effort to win big.

I ran a test simulation several times to see if 1,000 bets over time would yield an encouraging winning, or discouraging losing streak.

Why does it matter?

Because, for one, I am certain that I love winning streaks more than losing ones. I am also certain there are professional punters out there who are not discouraged by long losing streaks so long as they know their system is statistically expected to return a profit over the long haul.

Three different sets of Prices and Strike Rates for each test follow:

Test Price, Strike Rate, Max. Win Streak, Max. Losing Streak

1. $4.00, 25%, 5, 35

2. $2.00, 50%, 11, 11

3. $1.33, 75%, 35, 5

Note: The price and S/R relate to a 0% Profit on turnover – a break-even situation. In a future posting I’ll explore what different prices do to POT.

If you love winning streaks then you’ll love the 75% strike rate test.

Does the 50% S/R and Max. Losing Streak of 11 sound right?

If you’ve ever observed a roulette session, or know of a roulette player, I’m sure they’ll tell you of even bigger win / losing streaks on the red / black or odd / even.

The perception of the ultimate outcome, in my opinion, rests with how great or devastating the game was – hence the biased view of the player.

When considering any strategy where chance is involved (and can be qualified, eg. 20% or 60%) it’s important to look also at the potential for winning and losing streaks, and especially your ability to withstand them.

Probability and Price

How do Bookmakers set their prices ?  How do insurance companies set premiums ?

The ultimate answer:  demand.

To begin with however a bookmaker must have an opinion, or base it someone elses opinion who has a good track record, as to the way an event will run.

Theorectically (at least in my opinion), a 20% chance should be fairly priced at 4-1, a 50% chance 1-1, and 80% chance at 1-4 on.

In order to win long-term, a premium needs to be added to the price – let’s say a 50% premium. So a $5 fair price needs to be listed at $7.50 to make the betting proposition worthwhile. In the case of insurance companies, they are the bookmakers and in this case charge a premium of $7.50 (or more, depending on demand).

In his book titled ‘Money Secrets at the Racetrack’, Barry Meadow puts it this way:  Analyze chances, rather than attempt to pick winners.

The ideas presented in this book has changed the way I view all betting propositions, whether it be on sport, horses, or trading options. Given a set of circumstances that you understand, what is the probability of it going the way you want it to based on experience, and / or statistical data, and / or supply and demand.

Whatever factors you decide on to include in your assessments, you can then determine from historical data how accurate you are and this becomes another factor to consider in future decisions.

Welcome to PuntersDigest.com

Thankyou for visiting this site. Over the course of the next few days and weeks, I'll bring you the strategies & methods I use to make money on horse racing & sports betting – in most instances risk-free and guaranteed.

If you want to read specific topics which are not covered here, please drop me a note. That goes for interviews as well – let me know who you want to know about.

Enjoy!

Aaron Hay