The ineficiency of the markets

[tico]

Hi All,

I have seen a lot of stuff here and elswhere about the 'efficiency of the markets'.... Like so much else and with neoliberalism in general markets are anything but efficient .Lets take horseracing for example ,an efficient market would get the favourite winning everytime .Ultimately these markets are random ,that's why applying level stakes is one way of living in cloud cuckoo land...link your stakes to the inneficiency of the market and adapt your staking to your own interpretation of the race ,this has been given a title and it's called Value betting ,but again value betting is hogwash and in reality doesn't exist at all . Every single sporting event is a conundrum and the way it is analysed is up to the individual ,if they are good at it they make money from the inneficient market system ,not by Value betting but by spotting the possibility of the desired outcome ,the price of the desired outcome is part of the process(that's the bit everyone calls Value betting).
N stuff like that
Kind Regards
Tico

[sionascaig]

Got a bit lost with what you are saying... Maybe its a terminology thing..

Take the coin toss markets:

- you know the probability of heads coming up is 2 (of an unbiased coin)
- if you get matched on the lay side at say 1.9 or back at 2.1 you have a "value" bet

The same principle applies to any "value" bet although the true price will have a lot more uncertainty, hence models & variance around expected outcome etc...

Value betting is a "thing" and lots of folk do it..

[Anbell]

This is wrong: " an efficient market would get the favourite winning everytime"

[Kai]

I have seen a lot of stuff here and elswhere about the 'efficiency of the markets'....

That's odd, first time I'm hearing about this topic!

Ultimately these markets are random ,that's why applying level stakes is one way of living in cloud cuckoo land...link your stakes to the inneficiency of the market and adapt your staking to your own interpretation of the race ,this has been given a title and it's called Value betting ,but again value betting is hogwash and in reality doesn't exist at all .

It's funny you say that

I feel that betting the value (on BF ,Smarkets Orbit etc) is probably still the best way to go ,it has certainly worked for me .
Turn the clock back
Pre Exchanges.
with 10% tax and only bookies plying their organised crime, value betting was almost impossible . If somebody then had suggested that the exchanges would exist you would have thought them candidates for deep therapy .But Exchanges did materialise and with it stunning opportunities for value betting .
So my advice is that if you want to earn 25 or 250 or 2,500 quid a day then start getting to know your game and looking for the value ,forget trading it's just a sophisticated way of losing your shirt .

Because you've said the exact opposite last month?!

[ShaunWhite]

Hi All,

I have seen a lot of stuff here and elswhere about the 'efficiency of the markets'.... Like so much else and with neoliberalism in general markets are anything but efficient .Lets take horseracing for example ,an efficient market would get the favourite winning everytime.

Efficency doesn't mean the winner wins every time, it means they win as often as their odds suggest.

And it doesn't apply to individual markets because they're horses not dice and the exact true odds are unknowable anyway, it's only efficient over very large samples. It would be statistically impossible for every horse to be the correct price, and that means every horse is the wrong price all the time.... and you make money by exploiting that.

It's efficient at scale, inefficient at the granual level.

[ShaunWhite]

Value betting is a "thing" and lots of folk do it..

All successful traders do it too, the "value" is how many ticks you win or lose vs how often you get the direction right.

If your strategy stands to win or lose 1 tick that's an even money proposition, and you aim to be right >50% of the time. Proposition is one price, the likelihood (your ability) is another price. Aka value betting.

[Kai]

I know this is everyone's fav subject but I'm not sure OP was looking for a real discussion there

Hopefully I'm wrong but just based on the recent pattern of seemingly provocative troll posts, it's not quite edgelord level but not far off either

[Anbell]

I know this is everyone's fav subject but I'm not sure OP was looking for a real discussion there

Hopefully I'm wrong but just based on the recent pattern of seemingly provocative troll posts, it's not quite edgelord level but not far off either

True.