As a market investor over the last two decades, and a love for sports, I found the philosophy of investing was a natural transition into my recreational betting. At first, it never clicked, but after taking a serious look at my sports betting performance about a decade ago, I came to realize some of the fundamentals that did me very well in the equity markets could be applied to my sports betting.
While bankroll management was the most effective area I began to change, there are a variety of other areas I changed in my sports betting to hone it into what today is considered sports investing.
Firstly and most importantly, the view of sports must be considered an investment that can offer good returns. The psychology view of throwing money at a game has an emotional attachment that is different than investing. For anyone who is a prudent investor understands this, where when they see their investment drop in value, if their fundamentals are sound, they can view it as an opportunity vs. a red flag to run for the doors.
all associates in my investment community obtain their research and analysis before making a buy. Whether buying or shorting an equity, hedging using options, bonds, etc. my investment community may collaborate with one another, share information and all subscribe to one or more market analysts services; whether email subscription, online subscription or personal account management. Knowledge is power when it comes to investing in equities and understanding what indicators are moving a stock, or currencies in volatility due to geopolitical or environmental influences or a new product or CEO with a strong track record. All of these and more can move a stock, but to sum it up, it all derives from data / statistical and market analysis. In the sports market, sports investors, sharps and even expert handicappers will use one or more sports analyst service or tool. Sports investors similar to equity investors will subscribe to services similar to Sports Cash System that provide subscription or membership services. Investors are essentially buying performance and time from these services.
Time: There is a cost to your time. And your time to acquire and analyze all the data is a full-time job. Investors are willing to pay for this, where they’re essentially hiring an analyst to provide quality investment information to help in their investment decision making. Similar to an equity market analyst or mutual fund portfolio manager, and others, an investor is buying their time to provide the quality investment information.
The same applies to sports. There are numerous indicators that can influence game outcomes. And an expert handicapper, sharp player or successful sports investors will have their KPI’s (key performance indicators) that they’ll analyze on a game. Everything from moving odds across different books, new team strategies, new coaches or rookies, starting QB, historical performance, etc. these are all taken into account when researching the sports market for the most suitable, and profitable game.
Its critical that any sports investor or sports bettor who buys into a sports analyst and especially an expert handicapper service, is to qualify the sports information service or handicapper service provide a decent analysis on their sports picks and tips performance. Unfortunately, the handicapper market has earned a bad reputation from numerous handicappers who provide unqualified sports picks that do not pay. All investors understand both in equity markets and sports markets there will be ups and downs in their investments. There is no 100% bulletproof service, but through a sound investment strategy, bankroll management and a strong track record from a service you subscribe too, will shine over time…keyword ‘over time’.
There has been a number of times I’ve bought into equities where I did not buy into the low. Basic equity buying…buy low, sell high, but getting in at the bottom can also be attributed to luck. Understanding this and through proper money management, an average down or average up buying strategy will pay off if your investment decision is sound. Similar to sports investing, an expert handicapper will not get 100% picks correct, but they will provide recommendations on the buying strategy as it applies to a bankroll management on each game – whether it’s units, ratings or confidence levels, these need to be applied to any sports investment.
The second major difference between sports investing than sports gambling is your strategy. Again similar to equity investing, there are a number of investment strategies an investor can apply. Simple investment strategies and players as buying and hold, play IPO’s, dogs of the dow, shorting, ETF plays, average down, play an industry or market, group or mutual funds, options, hedging, FX trade, etc.
Similar to sports investing, there are a number of strategies you can apply to your game investment selection. Browse our blog for the various sports betting strategies you can apply to your sports betting and investing.
The KPI’s (key performance indicators) an investor and sharp bettor will look for from a sports investment service or expert handicapper is as follows, and if you cannot get this from your handicapper service beyond just ‘win percentage’ and have it validated, I recommend you walk away.
- Profit or loss over time
- This is substantiated from the handicappers publicly available starting bankroll as a starting point to measure. A deeper analysis should include the bankroll profit or loss over time and by sport. You’ll find some expert handicappers are great as NFL handicappers but terrible as MLB handicappers. There are many handicappers who will simply offer picks outside their expertise to run their revenue over the months until their core sports season kicks off.
- Return On Investment. Simply put, the ratio of the amount you earned (or loss) from your initial investment. Most sports bettors think this is a simple metric to accurately reflect their performance, which it’s not. Well, it is simple, but to accurately reflect your true ROI, This should also take into account and costs factored on sports investment services (ex. handicapper services), and other costs you may incur in your sports investing. Think about it, if you buy stocks, do you factor in your brokerage costs in your ROI? You should be!
- The total amount you risked on your investment or sports bet, divided by your profit or loss. This metric gives you a ratio gauge of how your sports investment portfolio is performing.
- The units or rating is value applied that many view as the confidence or risk gauge to place on a sports bet. An expert handicapper may feel a team selection or bet type will win, the margin or confidence of success can be dictated by the units the handicapper applies to the pick. Generally, a low unit of 1 would indicate to the investor to place a lower bet on the game, vs. a 5 which would indicate a higher bet on the game. The total unit value, however, will vary across every investor or sports investor. Some bettors and investors will have a specific dollar value they can afford per unit vs. others.
- Sports investors and bettors can have different ways of giving a value per unit. The approach I prefer is taking a 0.5% value of my annual bankroll. I say ‘annual’ as I don’t limit my investments to just the NFL. This is like an investor sticking with just an equity buy. A good sports investment or information service should provide a good breadth of sports coverage for the year, similar to an investment service covering multiple ways of hedging or investing in the markets.
- Win Performance
- The count and ratio of win, loss and draw performance. This should be shown ‘overtime’ so the investor has an understanding of win performance in the last week, 3 weeks, month, season, etc. While it’s a good gauge of the handicapper picking the winners, it does not provide deep enough insight into actual profitable performance. After all, the handicapper may simply be picking the easy wins, which come with lower odds where profit is not sustainable over time.
Always remember, just like investing into the stock market, or your buddies business or on this weekend’s NFL game, there is always a risk and no one service or individual can tell you it’s 100% guaranteed. There is always the risk, it’s just a matter of how much risk, your tolerance and a sound strategy philosophy to follow. And like Warren Buffet, over time it will pay its dividends. You may get a few strong wins out to the gate, or not. But over time, it should pay its dividends to profit at the end of the term, the season or whatever your investment time horizon might be.
Now don’t take just my word for it, but this is my approach to sports investing that I’ve applied from years of investing into the markets. I find both complements each other, and have their differences….let’s admit, sports investing is far more exciting than the markets. Would you rather watch the football game on the weekend and the excitement it brings, or the annual stockholder meeting listening to the CEO of what ‘might come’.