After Paddy Power settled bets on Hillary Clinton early it looks like that result has unofficially been put to bed.
Vince Stanzione has been spot on with betting on Hillary Clinton, although I did not take it. Vince got a mention on CNN Money he had big money on it.
The main reason that I did not take this bet on was that I struggled to see the value in it.
Vince said at odds of 1.5 that it was a good value bet. I thought, yes good value if you win. In hindsight it was good value.
What is Value Betting
Well that depends how you look at it.
Vince found value in betting on Hillary Clinton because he was certain that she was going to win. A 50% return for something that is what you might call “nailed on” can be considered value.
But there are many variables that affect this definition of value.
Vince Stanzione is a professional trader. He has been trading for 30 years. He has a set of rules that repeat over and over. He has lost only 1 election or political bet in something like 15 years.
- Lets say that there are 2 political bets a year that Vince recommends to his subscribers.
- Lets say that the average odds are are even lower than the Hillary Clinton bet.
- Let’s say 1.4, so for every £1000 you put on Vince’s political bets you win £400
Your results will look something like this.
2 bets a year for 15 years = 30 bets
1 losing bet in 15 years = 29 winning bets
29 winning bets x £400 = £11600
Less one losing bet £1000 = £10,600
Over £10k profit is a great return on £1000
So it seems that you can indeed find value at betting on low odds if your strike rate is high.
I repeat my previous quote “odds of 1.5 on Hillary Clinton was good value”. [I’m a bit gutted]
But they were only good odds because they came via a tip [if you like] from someone with a strike rate of 96.6%… I’ll explain.
When Betting is Not Good Value
The odds for any betting event are equal to the perceived chance of that outcome happening.
Using the table beneath you can quickly see what chance your selection has of winning.
The problem is that the chart is only mathematically correct.
It is correct if you have no other information that can affect the percentage chance of winning. And if you do win at any of the given odds and do not know how you won then your future results can be limited.
Any selection or bet that you make will have outside variables that affect the value of that bet.
Value Betting Hillary Clinton
Let’s take a look at Vince’s Hillary Clinton bet.
Using the above table, we can see that the actual percentage chance of winning this bet was 66.67%
But because of a higher knowledge of markets, stats, selecting winning bets and all other relative information that Vince used to make his decision. The actual odds that Vince predicted this bet was going to win with was probably nearer to 90%.
Vince never saw Trump as a threat… obviously he didn’t know that Trump was going to capitulate like he did but he was already on the right tracks.
Basically Vince deduced that there was a much higher chance of this bet winning than the 66.67% chance given by the odds.
Hence this is a value bet.
Finding Value in Your betting.
Knowing your market when it comes to successful fixed odds betting is really the key to long term success.
You need to be able to consider a set of variables that you can make an informed decision on.
Spread betting the markets works differently because you are trading a trend by following the previous prices.
If you only looked at making 20% profit each month from short priced fixed odds, then after a year your bank could look like this.
There can be value in short priced fixed odds betting. It really boils down to your knowledge of the markets, and sometimes your research to predict the result more accurately that will increase your strike rate.
That said, you can still lose easily enough. Although thinking longer term and using a sensible betting bank will help keep thing profitable.