Since launching in mid-November 2018, Betmarkets portfolio achieved a loss of 1.08% until the end of October. We´re currently far away from the maximum achieved earlier this year (+7.04%) and the bettors remain focused in getting back to it.
Betmarkets portfolio: severe drawdown from one bettor
October was spent upgrading our product and dealing with administrative tasks relative to the rundown towards launch. We cannot wait to showcase the newest version of our product and are already working towards setting the main improvements to tackle in the future! We were also preparing ourselves to exhibit and pitch at the Web Summit. There, we were already picked as one of the Most Favourited Startups the previous year and, this year, we were one of the 135 selected to compete for the PITCH trophy.
We now have a clear roadmap ahead of us. Once again, thank you for bearing with us during this beta version. We have more than 10,000 registered users in our Beta version and are eager to open our official platform. We are all living with anticipation towards the date of the official launch. As soon as we have a date on our hands we will share it with you.
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%]
- May 2019: a losing month [-1.92%]
- June 2019: some days of turmoil [-2.13%]
- July 2019: lower volume equals higher volatility [-0.96%]
- August 2019: welcoming the new season [-1.88%]
- September 2019: bouncing back [+1.93%]
The portfolio that we’re going to report is built by dividing your balance equally amongst all professional bettors 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.
October 2019: -2.87% (-1.08% overall)
We closed September with a cumulative return of +1.79%. October was a losing month throughout. It started with a drop down to -2.34% on the 21st and then rebounded to -1.08% upon closing.
A strong drawdown
October was frankly negative for some of the professional bettors in Betmarkets. collbet, Bene Santiago, BP Team – Soccer and BP Team – US Sports completely erased their previous month’s gains of 36.7%, 13.2%, 16.1% and 10.3%. Specifically, collbet – who has a very high volume – lost 55.5% during the month, a very significant losing run. On the flipside, another great month for Andy Johnson, who keeps on delivering. He gained 27.3% during the month.
The previous table only includes DutchDota2 (removed from the 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.
The Market Edge of the professional bettors will enable them to have a positive performance in the long-term. If they are able to keep attaining this Market Edge, this product will deliver a long-term positive performance. That is the most important, regardless of the short-term market fluctuations. This factor saw its importance reinforced recently, since most providers are dropping their spreads.
We ended October with an annualised standard deviation of 9.09%, from 9.47% at the end of September. This figure will continue to run down as the contribution of the initial days – where we only had a handful of professional bettors – diminishes. The inclusion of new professional bettors will further reduce 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 professional bettors 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 October with a Market Edge of 1.74%. 0.11% below September’s figure. With the drop of the spread from the bookmakers, the Market Edge requirements have lowered for all accounts. 2.0% is no longer required for a long-term positive performance. It will be closer to 1% from now on.
With a Market Edge above this threshold, even by picking randomly the bets (as to say, even without any “skill” at all), these professional bettors 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.
Changes with the official launch
After we launch, the threshold for the Market Edge (ensuring long-term positive performance) will be lower. And this is massive! Until now, we’ve been working with regular accounts – with still significant fees – from the launch onwards we will have corporate accounts with the providers. Those will have bonified spreads, allowing us to have an improved performance. On the long-term, this factor alone can account for a few percentage points of annual return.
Professional bettors 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 professional bettor. 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 professional bettor.
What we expect for the remainder of 2019
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 professional bettor. 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 professional bettors 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.
Try this Beta version without any risk
If you would like to have a closer look into the portfolio of professional bettors 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 bettors’ profit-sharing commissions. In the case of a loss, it’s entirely on us.