Living in the Moment
Taoist philosophy teaches people to accept and react to reality as it is, rather than try to escape it or focus on what has been or might be. This basic tenet has far-reaching applications but I have been reflecting on practical ways that it impacts my betting process, specifically focusing on the decision to move from a handicap to an actual wager.
In general, a good bet projects to have value relative to the price you are betting. There are plenty of nuances to that (outside the scope of this entry), but this is a basic truth that is much more complicated psychologically than it is logically. Our brains love to convolute a simple value proposition with elements or facts that aren’t relevant.
One psychological hangup comes when we know a better price was previously available and we missed out. Bettors train their brains to key in on value, and the idea of taking a price that is worse than the optimal price creates so much friction that we often will not make a bet because we didn’t get the best of the number. Sometimes that is the right decision, and sometimes it is not.
The reality is that whether a bet is more likely to win than the odds for the bet depends on a lot of factors, none of which involve whether a better price existed previously. The information available to us changes at every moment, and that applies to us and the market. Available numbers move as bettors shape the market. But it’s important to be clear-headed and make decisions based on the reality of the moment and not what has happened in the past.
There are infinite examples of this, but one NFL market this week illustrated several key principles related to this concept. On Monday, I was looking at the Jets +6.5 at home against Houston. Given the current size of my bankroll and typical NFL bets, I could get down everything I needed to and was considering making a play. But I was uncomfortable with the idea of getting stuck with Tim Boyle again, so I waited.
On Tuesday, the Jets cut Tim Boyle. At that point, I knew it would be Zach Wilson or Trevor Siemian at quarterback. Either way, my model showed value on the Jets because I projected a median of +4.5 (with Siemian) or +3.5 (with Wilson). I was just checking on some details and reports when the market moved pretty much wholesale to +6. I was frustrated because I had just lost the opportunity to bet Jets +6.5 and I hate missing a good number.
But I took a deep breath and recognized that my model showed value still at +6, so I put in my bet. It didn’t matter in that moment that I missed the best number because I got a good number. There’s a time to reflect on process and market-reading but this was a time to make my bet, so I did.
I got market support for my decision (and confirmation that I was right to move) on Wednesday morning, as the line moved to Jets +5.5. Then the Jets announced Zach Wilson would start. A friend asked me in a group chat what I thought about Wilson starting and I said I still saw good value on Jets +5.5. But my friend passed on the bet because he missed the +6.
On Friday, the line had moved all the way down to Jets +3.5, and you could even bet Texans -3.5 +100 at Circa. There is no guarantee that any of the bets on the Jets will win, or even that they are more likely to win than lose (unless you religiously agree that the market indicates the right side and it closes this low). This isn’t about the quality of the bet in a vacuum, but about the process. If I had eschewed the bet because it wasn’t the best price, I would have missed out on what is, by definition. a valuable bet (as of this writing).
This may seem like a simple concept, and yet there are very smart people in the betting space who will never bet a number that has moved off a better number. If they missed the best of it, they reason, then they missed the opportunity for a good bet. I disagree. Every bet has to be evaluated under the current conditions.
And I’m not the only one. Last January, after Jalen Hurts got injured and the Bills/Bengals game was cancelled, a bettor known as Hitman, who apparently has been successful betting on the NFL for years, determined that Patrick Mahomes had a close to 100% chance at winning the NFL MVP for 2022. He placed a large bet on Mahomes to win MVP at -750, which is a much worse price than the pre-season price of 9/1. But that was irrelevant to Hitman, who saw value in the moment and won $5,000.
Another psychological roadblock to thinking this way involves strings of past results quantified in a compelling way. There are times where I will lose 3-4 bets in a row betting on the same team or betting over/under on the same team. But even if my bets were 55%, which would be excellent, I would lose 4 bets of any type in a row randomly 1 out of every 25 samples of 4 bets. That’s pretty frequent, and given that I bet on or against 32 teams each season, likely to happen (in both directions). Avoiding bets where a robust model or handicapping method shows value just because of short-term results can have a negative impact on your process.
Similar sentiments apply to popular trends that have no real basis for projecting future results. I am not suggesting that “trends” never matter – that’s a large topic that contains both helpful and unhelpful information typically – but it has to have substance. “Prime time games have gone Under 11 of the last 12 times” does not mean the next prime time game will go Under and it does not mean it will go Over to balance things out. Whatever factors caused those prior results are being accounted for in real time by bettors that shape the market. It might be that the Under has value, but it won’t be because of the final scores of those 12 games.
I could go on with applications of this principle, but just writing this all out has helped me to internalize what I think is a valuable lesson. As always, I’m writing these as much for myself as anyone else, but I hope you enjoyed reading it if you made it this far. Oh, and now that I almost certainly doomed my Jets bet, congrats Texans bettors!