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Victor Niederhoffer



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Sports Betting

On a recent visit to the CBOT floor, I browsed through the lobby newsstand to see what the members were reading so I could learn, profit and stay abreast. Only one market weekly was on sale, the Commodity Research Board Chart book. That certainly deserves a review, with its list of computerized winners and losers, prices relative to moving averages, and trends of all commodities. Amazingly, almost all the positions were entered within the week at prices substantially better than the current prices, and if only one had followed it, why what alluring profits would have been made. Also on sale were five monthly trading magazines, including Futures, Active Trader, Stocks and commodities and so on.

This week might have been a biased sample, because all the members were focused on the movement of the CBOT stock price which opened trading the day before I came at 66, went up to 106 in the next week and has since eased off to 94. Apparently BOT takes its cue from the S&P 500, which has banged up and down below and above its own round number of 1200 nine times so far in the last year, and closed at 1200 exactly last week just to confuse the enemy. To the casual observer, it seems good that BOT is taking such cues, because it sells at 60 or so times earnings, and such an observer sees not much growth ahead in the mainstays such as corn, beans, and the 30-year Treasury bonds, whose pits looked like such a shadow of their former selves.

Apparently, by far the most popular reading material for the members is the sports books. About 10 of them were on sale. I bought five. Winning Points appears representive of them. It's a 12-page tabloid with best bets 83% winners, 67% top college, four-star best bets for the coming week and two more on top for Sunday, all for $7. The Compumatch section has a predicted score derived from the combined stats of prior games. It recommends you only play Compumatch plays where the predicted score is 2.5-4.5 points better than the line and 5 points is a Compumatch top play. One is warned to check the turnover ration and over-and unders. Historical trends based on matches agains the team, last year classified by the home site are given relative to the line and over-and-unders on each game are also considered relative to survival statistics. "THe Titans have scored at least 215 points four of the last five weeks, while Denver is averaging 15 poitns on the road. And the Packers have gone over 14 in their last 16 on artificial turf."

The analysis of each game is highly sophisticated, with analysis of the road game factor very prominent and the changing trends of the quarterbacks' learnings, and of course the turf, and turnovers. Nice consideration of the regression biases is given "Tese things tend to even themeselves up when you have a defense as good as Baltimore."

The incentive to win is considered and the extent of wear and tear, and the return of key players and the desire to "struggle mightily" is always noted. The duration between games and the numbers of sacks is noted, and how much the defense has given in the two last games and the incentives the coach will have to correct that is noted.

"But the fact remains that McNabb is trying to gut the season out despite suffering from ailments [a list follows], but "San Diego is a fantastic 10-0, 2 ATS {whatever that is] in ther past 12 road games, and then an adjustment for the special teams and whether the star kicker is expected back again.

Detailed box scores in a table looking like the advance-decline or most-active provided by most financial media is given but it's a little too small for an older Spec like me to read, although I can read the power play rankings, which are the personnel ratings of each of the college team's raw talent, the coaching, the field advances, "If you consdier coaching important, you'll profit from this method." (Shades of Jubak with his, "If you are bullish, you'll buy and if you are bearish you'll sell, or if you think it a growth company lu deserves a P/E of 25 but if you consider it a value company just 8."

In short, the analysis of the sports betters has many more angles and many more supporting numbers than anything that the speculator is exposed to. It is no wonder that the CBOT members flock to buy these as a relief against the mumbo so often disseminated in our field, and as a guide to the proper quantitative study of the markets in our own playing fields.

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