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Aug 5, 2014
Aug 5, 2014

Improve your betting with these five books

Untangling Skill and Luck in Business, Sports and Investing

What I learned losing a million dollars

Improve your betting with these five books

Bettors should always look for new ways to improve – one way is to read books. After a huge response to our original betting books article, some of our Twitter followers suggested worthy additions. Find out what they recommended.

In October Pinnacle published an article on books bettors should read in order to improve their betting. While those three books are critical, we knew there were others just as influential not on the list.

We asked our Twitter followers if there were any notable absentees from the list. The response was tremendous.

This article is the first of a two-part series (Click here to read part two) looking at the recommendations we received. The reviews are informative and thought-provoking giving bettors a thorough understanding of what these books offer.

We thank the authors for their participation and look forward to more collaboration in the future.

Success Equation: Untangling Skill and Luck in Business, Sports and Investing (Michael Mauboussin)

Why has no Major League Baseball player hit a 0.4 batting average since Ted Williams did in 1941? Why has no test cricketer got close to a 100 run batting average since Sir Donald Bradman retired in 1948? Why has no modern soccer team been able to defend the Champions League despite Real Madrid winning the first 5 European Cups in the 1950s?

The explanation, according to Michael Mauboussin, the author of the Success Equation: Untangling Skill and Luck in Business, Sports and Investing, is what he calls the paradox of skill.

Undoubtedly, sports men and women have got better at what they do over the past 50 years. Place Ted Williams into a modern MLB side and he’d probably be lucky to hit an average of 0.3. Put the 1950s Real Madrid team into this season’s Champions League and they’d probably lose all three groups games by a considerable margin. If players have got better, how, then, has luck become more important?

Put the 1950s Real Madrid team into this season’s Champions League and they’d probably lose all three groups games by a considerable margin.

Put simply, as skill improves, performance becomes more consistent, and therefore luck becomes more significant. Consider MLB batting averages. These reflect not individual skill but rather the interaction between pitchers and hitters. As hitters improve, so do pitchers, and vice versa, creating a type of arms race, a race to the top.

Whilst absolute skills have improved, their relative relationship stays more or less the same. Additionally, as skills improve, the variation between the most and least skilful has narrowed. As a consequence, the role of luck becomes more of a factor, which Mauboussin explains beautifully by means of his two-jar model.

His vision will provide an insight for even the most experienced and successful of sports bettors. Betting, like investment, is a domain of high uncertainty where luck plays a large role over the short term. More skilled operators will be able to use their advantage over the majority of market players to find value and profit over the longer term.

Mauboussin’s paradox of skill, however, urges caution. As a betting market becomes more efficient, and as the players involved on average become more skilled, it may well become harder to achieve profitability.

In the extreme, if every bettor was as equally skilled as the next, all we would be left with is a market for tossing coins.

Ultimately for those interested in deciphering the skill-luck continuum, Mauboussin’s Success Equation is a must read.

Reviewed by: Joseph Buchdahl @12Xpert 

Joseph Buchdahl is the author of Fixed Odds Sports Betting: The Essential Guide: Statistical Forecasting and Risk Management, and How to Find a Black Cat in a Coal Cellar: The Truth about Sports Tipsters

What I learned losing a million dollars (Jim Paul and Brendan Moynihan)

Your brain is wired to lose you money. What I learned losing a million dollars explains why, and then how to stop this from happening. And if you think you aren’t susceptible, you're the perfect test case.

The book delves into the sad but humorous tale of an intelligent kid who gets cockier at every turn as his life moves from a Kentucky frat life, to the trading floors and finally the boardroom.

However, a wealth of riches that took him 15 years to build up was lost in two and half months.

The book explains through real-life examples, how deadly internalising successes and failures can be. We all "know" not to make decisions with our ego and fall prey to confirmation bias, but we still do.

Your brain is wired to lose you money. What I learned losing a million dollars explains why, and then how to stop this from happening.

The way he explains acting with "the crowd" as a set of emotional characteristics rather than siding with a crowd, is especially prevalent to sports betting.

The book is primarily about the financial market, but read through a sport betting lens, you'll gain an essential insight.

A few of my favorite quotes:

"Perhaps the most frequently cited reason for losses in the markets is emotion."

"Are you trying to be right or to make money?"

"Analysis is simply that: analysis. It doesn’t tell you what to do or when to do it."

And for beginners, don't mistake luck for an edge. I've been there. It sucks.

Reviewed by: Matt Rudnitsky @Mattrud 

Matt Rudnitsky is the author of Smart Sports Betting: Advanced Stats And Winning Psychology Made Simple.

Market Wizards: Interviews with top traders (Jack D. Schwager) 

Despite reading this book some seven years ago I firmly believe it still holds relevance for today's modern sports traders.

It is one of the finest books I have read on trading whilst also being one of the most inappropriately named.

Market Wizards is a series of interviews, giving the reader an insight into the minds of top traders in a variety of financial markets. It gives the reader an idea of what it takes to succeed.

Contrary to the title of the book, it confirms there is no magic or wizardry involved and profitable trading is about discipline, developing a method that works, belief in what your system is indicating, conviction to take the risk and the benefit of avoiding distractions.

Reviewed by: David Hollidge @DavidHollidge

David Hollidge is the Managing Partner of West Hill Capital LLP Investment Bank and a part-time sports trader.

How to Find a Black Cat in a Coal Cellar: The Truth about Sports Tipsters (Joseph Buchdahl)

Books written about betting tipsters are few and far between. This is particularly strange given their prevalence amongst the betting community.

How to Find a Black Cat in a Coal Cellar: The Truth about Sports Tipsters is in my opinion, without doubt the best and most rigorous on the market.

Following years of analysing tipsters' records, Buchdahl has developed a qualified opinion.

The book offers:

  • Strong mathematical and scientific depth
  • Lots of statistical data
  • Distinguishes what makes a good tipster
  • Determines the difference between skill & luck
  • Guides in deciding on the value of a tipster

In summary this book is the perfect guide for bettors who don't have time to conduct their own analysis and prefer to be guided by a professional tipster. Reading this book will give you a clear formula to judging the ability of tipsters, potentially saving you a lot of money in the future.

Reviewed by: @pyckio

Trading Bases: A Story about Wall Street, Gambling, and Baseball (Joe Peta)

Baseball is a weird, wonderful and fascinating sport. However, betting on it can be a challenge.

What factors of the game are important, and how important are they? Given the number of stats available how do we measure the impact of starting pitchers, bullpens, offence and defence? And what is luck?

Trading Bases attempts to answer these questions. Peta - who worked on Wall Street and was a huge baseball fan – found himself with plenty of spare time in early 2011 after losing his job.

During this time he developed a betting system based on saber metrical principles, determining which teams are over/undervalued founded on what he calls clusterluck.

The book follows the system for the duration of a season documenting the many ups and downs. At the end of the year he has made a healthy profit, but more importantly for bettors, he explains the doubts he experienced throughout the year, which most bettors will relate to.

Reviewed by: Jo Flaegstad @joflag 

Click here to see the original must-read books for bettors article, or here to review the other recommended reading by our Twitter followers.

Betting Resources - Empowering your betting

Pinnacle’s Betting Resources is one of the most comprehensive collections of expert betting advice anywhere online. Catering to all experience levels our aim is simply to empower bettors to become more knowledgeable.