what you see depends on where you are standing

First Impressions



Newbury Selection Best-Price
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6 Le Milos
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Source: Stream Snipers.



On Having The Last Word


To believe something is to believe that it is true. So in theory, a trader when he places a trade, believes that all of his beliefs about the possibility of a forthcoming event outcome are true - otherwise why would he bother to trade? But through experience he knows full well that some of the beliefs that he currently holds to be true, will in fact be wrong (he is after all almost always trading on the back of incomplete information). So we are presented with a situation whereby a so-called rational trader believes that every one of his/her beliefs are true, whilst knowing that some of them are going to be proven to be false. That is the paradox - belief is actually nothing more than an experiment in knowledge acquisition. New information should always lead one to update ones beliefs, (perspectives should always be able to be changed when new information becomes available) - but this is far from being the case. People are essentially resistant to countervailing evidence: and indeed the backfire effect reveals that people will actually actively double down on their belief (or set of beliefs) when presented with contradictory evidence. Because most people are obsessed with having the last word they are resistant and unwilling to entertain other possibilities. Their back of a fag packet systems always exclude something, but what if what they have excluded was the most important piece of the jigsaw?

To inhabit a betting market is to be embedded in an interpersonal field in which we are in continual interaction with other people, some of whom we affect, many of whom affect us and some of whom affect each other. (Given that the full panoply of causes in play that are interacting and affecting the prices in any liquid betting market system is enormous, how is it, that we, as putative discoverers of the truth, set about selecting the causes that we take to be relevant to our final explanations.) There is an argument to be made that rational traders in betting exchange markets should not place bets with each other; the fact that another trader is willing to take the opposite side of my trade should suggest to me that this investor knows something I do not know.



Second Thoughts


The table below clearly reveals that gambling stocks are no longer the safe haven that they once were. Investors in 888, for example, do not need to be reminded that they have lost 79% of their investment in the past year. In the longer term the only people who ever make money trading are are those that trade whilst overall market conditions are still unfavorable. Each of these gambling stocks has associated with it idiosyncratic growth stories that are currently being ignored amidst the broader market turmoil and accordingly there is a good case to be made that this morning would be a good point to dip ones toe into the water. Flutter's revenues in the US, for example, account for a third of its global betting business and they are projected to account for half before long and the company will be seen as cheap by any overseas buyer given the recent slide in sterling. A US listing for FanDuel is still not out of the question.

888 is the one company amongst the trio that is not currently in a good place ; Q3 revenue of £449m, a decline of -7% year over year, Total online revenue of £325m, down 10% year over year, principally reflecting the impact of UK player safety measures. Total UK online revenue of £171m, down 13% year over year driven by a reduction in average spend per player, which was down 14% year over year.

We shall return to the price action at the start of next year to see where the market is pricing these stocks. To obtain the real time price please click on current price below.

UPDATE: 22/11/2022. Following the opening of our position in late September, the shares in question have recorded significant gains. The outlook has become even more positive with the breaking news that BETMGM is prepared to do whatever it takes to take out Entain. A contact in the offshore gambling industry said; "Whilst I have no awareness of this specific story, I am aware of the fact that the vultures are circling the UK listed betting companies, and that they are more than likely to make their move ahead of any significant reversal in the fortunes of the USD. Moreover, the short sellers (particularly of Flutter) who have tended to only focus on issues concerning domestic regulation ,are very likely to find themselves being squeezed out of their positions as speculation mounts going into the New Year."





Companies 2018 Year High Current Price Change (%)
Entain 2222 1050 -50%
Flutter Entertainment 15475 9900 -36%
888 447 85 -85%

Prices as of the morning of 29/09/2022. LSE.



Peer-to-Peer Crypto Betting Markets


Augur the crypto prediction market currency is trading at $7. Augur reached a two year high of $52 on April 17 2021. Augur is powered by Ethereum, which as we have pointed out for the past ten years is in very real danger of attracting the attention of SEC vis a vis the legal status of ether. Ethereum is testing the lower end of its Sep.-Oct. trading range, in a move that could push the cryptocurrency towards its yearly low of $1,000


Company Current Valuation
Augur $7

Subject: Prediction Market Crypto/Augur Prediction Markets.



Polls/Prediction Markets Wrong Again


There is a dominant narrative that pertain amongst the prediction market fanboys - prediction markets are never right or wrong. It is a good cover story, but one that does not go down too well with those that wager in these markets (trading under the delusion/illusion of the wisdom of crowds logic) and who consistently get taken in through following the so-called smart money. As I have consistently pointed out elsewhere (ad nauseaum) prediction markets are empty vessels; they do not contain the insiders that correct the mispricings that occur in other betting markets and moreover, they simply shadow the polls and accordingly they consistently underestimate the amount of support for right wing candidates and events (think Trump, Brexit etc..Strong emotions drive attentional focus and contribute to motivated reasoning.). Prediction markets remind us that subjective probabilities always run the risk of being aleatory (depending on the throw of a dice or on chance; random.), fanciful, speculative or merely the result of the guesswork of a random crowd succumbing to confirmation bias.

Risk managers cannot look to prediction markets in order to obtain the world’s best and most informed probability estimates of all types of events happening, because risk, in the context of prediction market markets, is not measurable and therefore not reflected in the market prices on offer (and it is astonishing that there are still people out there who are still prepared to claim that this is indeed the case). It is rare in the extreme, especially in the case of political betting markets that we are ever left with a price that aggregates efficiently all public and private signals. The price on offer is more often than not simply the product of a miscalculation based on incomplete information and coloured by unconscious affective reactions.

The polls and the prediction markets (see below) once again call it wrong as the recent election in Brazil goes to second round after Bolsonaro closes gap on Lula.



The very brilliant Bacchus by Cy Twombly.


The very brilliant Bacchus by Cy Twombly.

Our moods have a big impact on our retrieval processeses; they are a cue for positive (negative) information stored in long-term memory. Mood-congruent memory causes the set of recalled information to be therefore biased.

Glasgow were the 1/2 favourites to host next year's Eurovision Song Contest. As was the case with the recent "Next Dr Who Betting Market" there were people at the BBC who knew the result before the conclusion of the event. On both occasions there was no evidence whatsoever of large scale insider dealing in the betting markets, somehwat foing against the main idea of the prediction markets that said markets will always flush out the truth because insiders will feel compelled to capitalise upon their superior knowledge.