Tao Te Cha-Ching: A Taoist Approach to Handicapping, Part 4


Patience is an often-forgotten virtue in today’s world of constant dopamine hits. We want results right away and if we don’t get them we can lose interest fast. But becoming good at a difficult task requires patience and persistence. And handicapping a sport successfully is a very difficult task.

Taoist philosophy often looks to nature for inspiration. This week as I was hiking in Arches National Park near Moab, my eyes were drawn to the beautiful rock formations that developed over millions of years. The horizontal lines in the rocks told a story of slow development where each layer of sandstone settled and hardened on top of the previous layer. This slow process created solid structures that will take millions of years to erode. We see this in old trees as well, where each ring builds outwards and strengthens the integrity of the tree.

Human construction follows the same rules. The great Pyramids have outlasted countless man-made structures that were more hastily built. Despite vast improvements to building technology, our structures today often do not last as long because they are built for immediate use. It’s all about how quickly we can erect a structure because unoccupied space lacks economic value.

I am drawn to handicapping the NFL because it is an exceedingly complex problem with rich solutions. No sharp bettor woke up one day and decided they could win betting into efficient markets. Many studied the game they wanted to beat. Others developed high-level skills in math and data analysis. Some wrestle with the market until they understand it. The sharpest bettors combine these in unique ways. What they all have in common is that it took time to develop and hone the skill set that made them successful.

I came up with my core handicapping concept during and after the 2019 NFL season. I have only implemented it for three seasons. It was a decent idea from the get-go and yielded positive results immediately. But every season, including successful seasons, taught me ways that I can build on and improve my process. I try to remain curious about my blind spots, my system’s potential flaws, and any ways I can fine-tune the process for better long-term results.

Last season it felt like I suffered a lot of losses on tough end-game scenarios that did not go my way. To see if this was just my biased perception, I studied my bets. In total, there were 34 games I bet on (counting only spreads and moneylines within -120 to +120) where the final scoring play of the game shifted the outcome of the bet. I went 5-27-2 on those bets. The odds that I would accumulate that kind of record if the proposition was truly 50/50 are exceedingly low. Was this just a massive outlier or was there something I was missing in my handicapping process?

So I dug into these games. I analyzed the game flow, context, and ways these games ended. I noticed some commonalities and identified some characteristics of the teams that might have helped me avoid some of the losses. It led to a new model concept built around in the interaction of team archetypes, my ratings, and the spread. When I backtested the model over the entire season, using only data available before each matchup, it yielded a 68% record against the spread. Obviously there is bias when you do it that way, so I ran it back over the prior season and it still hit over 60% against the spread. I will be building this concept into my model for 2023.

This example is only one iteration of many. I have made other adjustments and improvements along the way, and will continue to make more. I am building something with many layers, built to withstand changes over time and thrive as the game and the betting markets evolve. My journey is far from complete.

Adopting this mindset runs against the way success is often discussed by many of the people talking about sports betting. The touts barking about their last eleven plays frame success as a short-term burst without recognizing it’s a long, step-by-step journey. But even the long-time winners can be guilty of clinging too tightly to processes that once worked but have failed to fully adapt to the ever-changing landscape. In my opinion, the best handicappers are those who do not fall in love with their own process or even their own results.

As Lao Tsu famously wrote, the journey of a thousand miles begins with a single step. But this is often treated as motivational advice to take the first step. It’s equally important to carry it forward on each step of the journey, remembering that it’s a long way and each step is part of the journey.

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