Since launching in mid-November 2018, Betmarkets portfolio achieved a return of +4.83% until the end of May. This month saw the portfolio losing (-1.96%) and renewing monthly minimums for the first time – 0.18% below April’s minimum. During May, our experts did not manage to achieve a Market Edge above 2% (very close at 1.99%), not being able to outperform the market on that factor alone. Statistics were also not on our side as the loss was significantly larger than expected, considering the Market Edge attained.
Betmarkets portfolio: a losing month
Note: We apologise for the delay in publishing May’s report but the beginning of June saw us acting in several fronts at the same time. Hopefully, some exciting news to come about what we have been up to in these past few weeks! In the mid of June, the team took some holidays to recharge and refocus on the important weeks ahead. And now, we’re back 🙂
May came to an end with more than 4,500 active users in Betmarkets and great engagement in our Betmarkets Community on Facebook. We were invited by Startup Portugal to attend Collision and so we flew to Toronto in the middle of the month. You can check our journey here.
We did not add any experts to our portfolio this month. Instead, we were forced to drop DutchDota2 due to a change on his betting behaviour. More on that later. We keep prospecting to further increase the number of experts we offer in Betmarkets, mainly exploring new sports to keep the volume up during other sports’ Summer off-season. We will soon be adding 2 new experts to the platform, one from soccer and another from MMA, in the buildup towards our live launch.
The months to come are off-season for most European sports, so some competitions will stop. Still, you can expect a lot of volume from horse racing – peaks in the Summer – and from baseball. To bet on the latter, you need to follow Diocletianus.
If you haven’t done so already, make sure to check our previous monthly reports:
- November and December 2018: a profitable first couple of months [figures amended in January’s report: +2.86% and +1.13%]
- January 2019: slow and steady wins the race [+0.41%]
- February 2019: our experts had something to say [+1.68%]
- March 2019: all-time highs before closing below [-0.93%]
- April 2019: steady month with great finish [+1.64%]
The portfolio that we’re going to report is built by dividing your balance equally amongst all experts available and by following each new one as soon as he/she is available. In this sense, if you were to follow this portfolio, you would be reallocating your balance every time a new expert is added. The risk/return level of the presented portfolio is the lowest in our scale – low. Performance for a portfolio of medium risk/return is 1.5x the one of this portfolio. Lastly, performance for a portfolio of high risk/return is 2.0x the one of the presented portfolio. Remember that the volatily of these riskier portfolios increases along the same lines.
May 2019: -1.96% (+4.83% overall)
We closed April with a cumulative return of +6.79%. May had a negative tendency throughout, with short spikes of gains compensating previous strings of losses. For the first time, the portfolio renewed monthly minimums, albeit slightly. The lowest point in May was +4.21%, 0.18% below April’s minimum. On the long-term, we are confident that our experts will manage to prove their advantage against the market. A monthly Market Edge of 1.99% (below of what they have been managing to attain) would have seen, on average, a break-even – not a loss as we had.
High volume with high odds equals high volatility
Horse Racing – along with Greyhound Racing and Golf – is a special market because most bets involve huge odds. Aditionally, with so many races happening throughout the day, volume piles up. Sometimes, this leads to spectacular gains! We have had that before – and will have again in the future. In March, Andy Johnson gained +40.2%, and, in April, Mike Shaw won +55.7%. Last month, they both had a dry spell with losses of 28.8% and 26.6%. Those contributed the heaviest to a monthly loss on the overall portfolio. On the flipside, Diocletianus deserves the highlight this month with a +20.8% gain!
Sensible risk management = diversification!
May’s performance from Horse Racing should come as a warning sign for those of you who are not diversified and have selected a high risk/return level. The worst thing that can happen in betting is when you “break the bank”. This means that you have lost your overall bankroll. When betting for fun, it’s not an hassle – given that you conduct that activity responsibly. When investing, it means that you allowed something very wrong to happen and will stop benefiting from any future recovery. Bear in mind one thing, long-term focus is key – these bettors have proven to have an advantage against the market – so you need to manage your bank responsibly to survive the short-term fluctuations.
Risk of ruin
As an example, an investor that has allocated all of his balance to Andy Johnson and selected a high risk/return level would have seen a 57.6% loss this month (28.8% x 2). This situation would not be sustainable because (s)he would be at risk of losing the full investment in case of another bad month consecutively. On the latter case, (s)he would lose all ability to benefit from the gains obtained in the long-term – predictable due to the Market Edge above 2%. We advise you to put yourself in a position where you can always weather the short-term fluctuations. Follow several experts – we recommend 5+ – and adjust the risk/return level to your profile and to the amount that is invested. From a global perspective, only invest a small portion of your overall investments in risky assets like the one we offer at Betmarkets.
We know that it is still a Beta version, so your money is not on the line – well, at least in part because everyone will keep their profits as credit towards future fees! However, take this as the real deal to best prepare yourselves for the decisions to come – don’t leave money on the table due to lack of preparation.
The previous table only includes DutchDota2 (removed from platform due to a behaviour change) in his overall impact of the portfolio performance.
This has been the daily evolution of the gross performance of our portfolio since its inception. The bolded figures represent the end of each month.
There are signs of an upward trend in our portfolio, especially given the Market Edge of our experts. If our experts are able to keep behaving this way, this product will deliver a long-term positive performance. That is the most important, regardless of the short-term market fluctuations.
We ended April with an annualised standard deviation of 11.01%, from 11.88% at the end of April. This figure will continue to run down as the contribution of the initial days – where we only had a handful of experts – diminishes.
Our portfolio has been achieving a great risk/return profile. The inclusion of new experts will further strengthen this profile – reducing volatility. In addition, we shall be more and more positive about our predictions as we pile up observations. This will increase the statistical confidence of the analyses.
We are also compiling information on the Market Edge, that is, the advantage of the experts against the overall market (measured by the comparison between the odds they bet on and the closing odds – statistically speaking, the best predictors of the true probability of the event). We closed May with a Market Edge of 2.40%. 0.07% below April’s figure. During May, Market Edge stood below the 2.0% threshold. Experts did not manage to beat the market only by grabbing higher odds.
With a Market Edge above 2.0%, given that the fees of the betting providers we work with are in the range of 1.7%-2.0%, even by picking randomly the bets (as to say, even without any “skill” at all), these experts will tend to profit in the long-term. This is just due to grabbing higher odds than what the market settles as fair. And that is a big reason that supports Betmarkets as an investment.
Experts that do not achieve a Market Edge above the spread will need skill to profit in the long-run. Another thing to take into consideration is the betting style of each expert. The Market Edge each one attains will deeply depend on it. For example, if you mostly rely on LIVE bets, your Market Edge will only be computed based on a small fraction of all your bets (only the Pre-match ones can have Market Edge).
The figures presented below are cumulative from January 23rd onwards. When we published the new layout, changing the operational structure of the platform, some data had to be reset. Their significance will, as well, increase with the growth in the number of observations for each expert.
Some competitions are near its end but Betmarkets won’t stop
Indeed, most European sports and leagues tend to stop during the Summer. The NBA is also about to finish its season. Nevertheless, Betmarkets will have plenty of volume during this season break. Horse Racing runs full-throttle during the Summer, Baseball has already begun and some football leagues have just started. Fancy some Nordic football? Or are you more into the flair of the Brasileirão?
What we expect for the remainder of 2019
During 2019 we will continue adding more experts to our platform. With the increased number of bets, the portfolio will start to exhibit a steadier behaviour. Its standard deviation will decrease due to the independence between the performances of each expert. Winning runs by some compensate losing runs of others. On average, the impact of being able to beat the market should start arising. That is the power of diversification and the main reason for you to follow several experts simultaneously.
We are aiming to beat the long-term risk and inflation-adjusted return of the S&P500 of 6% per year while keeping lower volatility levels. If we manage to keep up this pace, we will certainly surpass the goal. Moreover, we’ll achieve a lower volatility level than the one of the index.
Try this Beta version without any risk
If you would like to have a closer look into the portfolio of sports betting experts we are offering, register at Betmarkets. In this beta version we are giving you €10 to invest until the end of it.
In addition, you can use the promo code BM252 to receive another €10 to invest! 🙂 No deposit required. We will withdraw this amount when this version ends. You get to keep all profits as credit towards future experts’ profit-sharing commissions. In the case of a loss, it’s entirely on us.