Information Forms the Basis of Knowledge and Know-How. Garbage In, Garbage Out!
In the first two articles we covered the need for self-discipline, a solid staking plan, and a fixed betting bank.
In this article we’re going to go one step further to establish the importance of recording accurate information, and why it’s important the information you provide accurately represents your betting activity.
To illustrate this point I now introduce the ‘knowledge pyramid’, which reflects just how critical having accurate information is.
You can see from the knowledge pyramid there are 3 levels. Each level serves a distinct purpose and together they form a synergy.
The first level is Data.
It’s transactional in nature, and involves the process of recording individual transaction information. These are the facts and figures for each individual bet we make.
As a bettor, it’s essential you have a system in place that accurately records your bets; the individual investments you make. You need to be recording the date, the event, the venue/course, the selection, bet type, the odds, the stake and the result. Each bet is a separate transaction and needs to be accurately recorded.
Without this level of recording your bet data, the rest of the pyramid is less effective. The structure begins to sway and wobble due to inaccuracies, and overall the strength of the pyramid becomes considerably weaker.
How you record your betting data is very important. It’s not just good enough to put it in a spreadsheet. This crucial recording process forms the basis of reporting and decision-making further up the pyramid and needs to be fully integrated.
The second level is information.
This is where the transaction data is aggregated and condensed. It’s at this point we can start to report and draw conclusions from the bet data we have recorded.
At this level we can begin to contextualize, categorize and perform calculations using condensed data.
This is where we begin to see patterns forming, where we make comparisons and measure performance based on sequence or time (or both). The information we’re viewing here is a summary of all our betting activity based on the filters we have set. It shows us how well, or how badly, we’re performing.
Importantly, it starts to provide clues as to the reason why we are where we are.
Short term reporting can show flawed results. By analysing data on 1 day’s betting it may reveal that our strike rate is 50% because 2 of our 4 bets won. Fantastic! Look at that strike rate!
However, over a period of 30 days, 100 bets, and 20 winners it will reveal that our average strike rate is in fact only 20% and there’s definitely room for improvement.
This longer term view helps us to understand our overall actual performance, as opposed to our own perceived performance. There is a big difference.
The information pyramid provides valuable insights into our overall performance and profitability. Measurable results that cannot be argued with, or fudged. The facts are what they are. If the quality of the information at the data level is accurate, then conclusions drawn in the middle informational level become more relevant.
For example, we may start out using level stakes betting. Where each bet is a fixed amount. If we continue with this, and we’re making a profit, that’s great. We are basing our betting on what works on a daily basis and that’s fine.
But, by utilising the power of an integrated information system it may just be that level stakes are in fact losing us money! Sure, we may be in profit, but what if we used a different staking plan; something like bookies bank for example? How would that affect our profitability. Over the longer period you have more bets to analyse and can make better judgement calls.
It may just be that after doing a what-if analysis you find out that in fact the bookies bank staking plan was indeed more profitable, requiring only slightly increasing stakes at the odds you’re betting if you hit a loser or three. The point is you won’t know this if you don’t have accurate information to start with.
It may just be that in any race you may have more than 1 bet. What-if you use dutching instead of level stakes, how does that affect profitability? Again, because you have taken the time to accurately record your individual bets, you have a full picture of how these factors affect your betting profits over time.
With enough information you can really drill down and perform powerful tests against your actual betting history using what-ifs. You change the staking plan and see immediately how it affects your position. You can calculate your edge, and determine what your estimated losing streak is based on your past bets. The power is with you! The information is there, use it!
What about draw down? Now there’s something you don’t hear a lot about when it comes to sports betting. It’s a crucial piece of information as it determines what sort of cash reserve you must have in place in order to stay in the game. It could be that on a Saturday you have 20-30 bets on the footie, what’s the effect of that on your betting bank? The drawdown graph shows you in real-time exactly what the effect is.
What about testing random win/lose data on your past bets to see how this would pan out? Is your betting strategy strong enough to withstand a prolonged run of losing bets? Random testing on your bet data provides valuable insights into your strengths and possible weaknesses.
All these things are possible IF you have accurately recorded your bets in the first place.
Now you see why I consider bets to be investments. Why I adopt a portfolio approach, and why it’s so crucial to have a solid information system in place. Without it you may be making a profit, but you could’ve possibly been making a lot more profit if you had of just tweaked your betting a little… but you wouldn’t know that unless you were able to run analysis on your bets to determine the effect.
Which brings us to the top level of the information pyramid; knowledge.
Knowledge is the result of good bet recording and information analysis.
It’s through the acquisition of knowledge that you develop ‘know-how’. Good ‘know-how’ makes you a better punter!
Knowledge is what you have when you know that your most profitable races are handicaps, over 7 furlongs, on selections between 9/2 and 14/1 so you focus on these.
Knowledge stops you from betting 1/1 shots because you know that even though you’ve recorded a nice stream of winners at this odds range, overall punting them has dented your betting bank considerably due to the larger stake loss when they get turned over.
Knowledge is based on information and is gained by learning.
To become knowledgeable you must first focus your learning on sound information.
Study the information pyramid. Realise the importance of each level, and understand why it’s so important that the bottom layer, the bet data recording process underpins the whole structure.
Weakness at the bottom results in inaccurate information filtering up, which in turn distorts reporting, which is left unchecked results in faulty assumptions being made at the top.
You’ve heard the old adage, GIGO, Garbage In Garbage Out. Well it’s true. If your bet recording process is faulty or flawed, then any conclusion you draw from that is bound to be inaccurate.
Study the knowledge pyramid. Understand the importance of each layer. This will help you in all areas of your life, not just betting.
Next week we start our trek up the pyramid! We put in place the right bet recording process to ensure that the information we’re feeding in is accurate and relevant. We start to build on the foundation.
We move forward rapidly from here on. So if you haven’t done so already, download The Staking Machine (there’s a free trial available), or sign up for the TSM web app so you can keep up.
In the next article we start working with our bet data.
I’m going to use the BVSystembets data in my examples. You can either use that, or your own. The principles of what we’re doing won’t be affected either way.
Stay tuned for the next episode!