Kelly System vs Flat Betting

[sportshobby]

Landmark, if I already had 5 diverse books would I find any bargains at your book?

And how would I see your lines? Can I see them without posting up (on the internet), must I call, etc? And do you plan to put your lines onto an odds feed in the future?

Thanks

[PerpetualCzech]

wintermute,

Yes I am new and thanks for the ego boost. I spent all day reading past posts and I think I can both contribute and learn a lot from you all.

[Landmark95]

You can see our lines at our website http://www.fivecardcharlie.com however during peak periods that may be delayed as much as 5-10 minutes (click on "Lines"). We are considering going to an odds feed, but I wouldn't expect it soon, because it is not a priority for us.

[phatboy]

Glad to see that,
Mr. Miller and Slam Dunk have come to an understanding.

You are both great handicappers.

Mr. Miller
thanks for your email responses.

Slam
send me an email at [email protected]

I had spam problems with my other internet acount.

I guess going 28 winners and 6 losses durring the NBA playoffs wasnt good enough for some people.

One A hole wrote
I lost on your 6 losses and didnt bet your 28 winners.

Now you tell me what is the probability of only betting on my 6 losses and none of the 28 winners.

When I emailed him back and said that the guy sent me like 200 emails a day man I mean like all kinds of crazy stuff.

So I am laying low with this email address for now.

---------------------------------------------
THE TEAL IS REAL

[This message has been edited by phatboy (edited 07-24-2000).]

[Gart]

I want to add my 2 cents.

First there is no doubt that the Kelly Criteria (KC) will return more money over the long run with positive expectation bets that flat betting. That being said I follow the same money management scheme J.R. Miller uses; flat betting until I reach a plateau.

Why do I do this? First I do not alway know my expectation of winning. I may trying out something new that works on paper but I have to give it a real world trial before I will bet alot. I usually bet half a unit on these bets so this is contrary to strict JR Miller money management doctrine.

On other sports I can pretty reasonably estimate my winning percentage I also do not follow KC. The main problem is I am lazy and I do not want to figure out the exact amount of money I have at each book everyday. Also I usually have a fair amount tied up in futures bets so how do I factor that in? The KC makes sense mathematically, but for the real world flat betting is plain easier.

And finally flat betting until you reach a plateau is just a modified Kelly Criterium anyway. It might make slightly less money but is much more convieniant to use.

[SLAM DUNK]

Czech. I cannot speak for JR. I do think the fact that his strategy requires a halving of the bankroll if he loses 50% of it plays a part.

I actually agree with you. It is like compounding interest. If you increase bet
size daily, you earn profits on your profits, compounded daily. I prefer doing it on a round number basis $30, $40, as I think you would become a nuisance to a book if you called in bets of 29.70 to win $27.00. I guess you can do so with an on-line book.

As I have mentioned before I like to "retain"
1/2 of profits, but that is my personal choice and obviously this will stunt my long term growth. The decision should be based on your objectives. If you just want to see how far you can take a $5000 bankroll, than by all means do not retain any profits. But, if you are going to invest a serious amount of money, for psychological reasons, I suggest retaining 1/2 of the profits. The psychological reasons are as follows

1) working yourself into a higher comfort level(one of the big problems with a pure Kelly system). If you have always bet $200 a game, and suddenly your bankroll has you up to $600(much higher with Kelly) a game, can you make the same decisions with that much more money riding on the outcome? Will you become more timid and not bet games you should? Will the adrenaline of the big profits make you TOO AGGRESSIVE. The decision to bet a game is not always black and white. A lot of times I mentally labor on the decisions, yes, no, yes, no....(and no I have not found that games I have labored on and bet underperform). The ability to consistently make the right decision, takes practice, but will become clouded if you are not comfortable with the bet size.

2) We are not computers. You begin with 5000, build it to 10,000, are playing on double the bankroll you began with and then the bad streak comes and you give back the $5000 in profits. You look at your net of $0 for the season, yet you have a winning record on your games. Are you emotionally ready to deal with this? 4 months of hard work, a winning record and NOTHING to show for it. What do you do now, the Slam Dunk way and ride out the losing streak, the JR Miller way, and go back to your initial BR, and basically waste what has been a winning season(percentage wise)?

Just a little more food for thought when deciding what betting approach you plan to use.



[This message has been edited by SLAM DUNK (edited 07-24-2000).]

[Landmark95]

Great Post Slam! I too am happy, to see you and Mr. Miller getting closer to some common ground, it has churned out some really thought-provoking stuff from all of us the last few days. Thanks guys!

[PerpetualCzech]

Slam Dunk,

Agreed on the fact psychological factors can (and do, for almost all of us, I'm sure) influence the size of your bet ... I just had a problem with JR claiming that it's a mathematical fact you should use a flat-bet approach, which I think I showed in my example is wrong. I assume he was taking the psychological aspect out of the picture in his determination of the bet size. I also didn't like, and will never accept from him or anyone else, his explanation of "that's just the way it is". That sort of talk is a red light for me and indicates cloudy thinking.

I personally never try and calculate an optimum bet size to the penny because I'm confident the small variances even out in the long run and that it would be an inefficient use of my time.

JR, any response to my example of giving my bankroll to my twin brother?

[wintermute]

gart

Go carefully here. When I mentioned in one of my posts that plateau betting was simply a modified Kelly, JR bit my head off.

[Jeff]

Worth bringing back up since there's a discussion on the Kelly System

[kahlmyishmael]

I think we can all agree that, if the choice is between deciding how much to bet by emotion or by math, math, no matter the system, is preferable. Whether to bet a flat amount, a flat percentage of BR (my preference), or a varying (by supposed advantage) percentage of BR doesn't matter nearly so much as the initial decision to be consistent in your approach.

Well...one can still Kelly Bet using fixed-size bets as a percentage of bankroll.

"Ruin v Doubling Bank" curves come into play...

The 2% of bankroll and subdivide all bets into even amounts equalling that amount;to wit, 2 bets of 1%.....dressed in another set of clothes....

...is a super conservative Kelly System of its own...

..only requiring something under 53.25% proficiency.

OFF TOPIC
DOES BILL WHATMOUGH STILL WORK FOR JACK PAINTER?