http://www.businessinsider.com/centaur-launches-new-sports-betting-hedge-fund-designed-to-exploit-amatuers-who-gamble-based-on-emotion-2010-3 I’ve always thought there is a statisitcal arbitrage.
would not invest
Diversification benefit warrants consideration.
Unless the hedge fund manager is briding the player, ref, I will not invest. I can’t think how such fund can add value. I can do my own sport betting without paying the 2/20 fee.
I’ll take Butler.
short this idea. Strategy concerns aside, there’s no way there’s enough profitable liquidity in this market to allow this fund to expand to a sustainable size.
I take it back. Check this out: 3 per cent per annum, a 30 per cent performance fee and stiff early-redemption penalties, starting at 5 per cent in the first year, then falling 1 per cent each year until it reaches zero. 3/30!!! http://www.independent.co.uk/money/spend-save/new-sports-fund-ready--for-kickoff-1929166.html
3/30 is a bit steep and liquidity would definitely be an issue. I still think there is money to be made with a decent bot though.
There is merit to an investment strategy that has no systematic risk and no exposure to inflation, oil, interest rates, etc. Given the minimal risk characteristics I would happily take a 5-6% return a year, which I think a good professional gambler could yield after reasonable (1% AUM - no performance fee) fees. Its company specific risk is minimal – sports betting is not very risky (take 10 bets blind; expect that you will lose/win 5 and simply be down the bookie fee). Nakedputs: Not sure about liquidity either. I just think it warrants consideration.
is our equity outlook _this_ bleak?
US equity market seems overvalued by historical standards (see shiller)
As an example of potential liquidity issues the largest market on Betfair at the moment is £12m on the winner of the Barclays Premier League. Other more short-term markets often go higher than that, but still for a fund with a min investment of €100k they might not find it too easy to invest it all. As an aside, Betfair talk me a lot about markets. Sadly, it is banned in the US.
joemontana Wrote: ------------------------------------------------------- Its company specific risk > is minimal – sports betting is not very risky > (take 10 bets blind; expect that you will lose/win > 5 and simply be down the bookie fee). > So is betting on red at the roulette, with the green (1/33 of your bet each time you bet) being your booky fee. Investing isn’t gambling.
Viceroy Wrote: ------------------------------------------------------- > joemontana Wrote: > -------------------------------------------------- > ----- > Its company specific risk > > is minimal – sports betting is not very risky > > (take 10 bets blind; expect that you will > lose/win > > 5 and simply be down the bookie fee). > > > So is betting on red at the roulette, with the > green (1/33 of your bet each time you bet) being > your booky fee. > > Investing isn’t gambling. There is a considerable difference between a betting exchange and a roulette wheel.
You have to realize that this fund will be conducting in-game betting. Exploiting emotions, not the random outcome of the game. For example, let’s say you and I set up a game where we flip a coin 10,000 times. Every time it lands heads I get 1 point, every time tails, you get 1 point. Now say there is a service offering in-game betting. Meaning that our friend, John, has the ability to bet the winner after the game is already underway. Let’s say after 100 tosses that I’m winning 80-20. John sees this and says “hells yeah, CF_AHHH has got this game in the bag he’s up by 60. At this rate he’s gonna win by 6,000… I’m gonna bet $100 that he wins by at least 5,000” Are you all saying it’s not smart to exploit his lack of logic and bet against him? What is the difference between this and strategies that exploit people’s behaviors with regard to equities? Investors overreact and under react to things every day. I fail to see why exploiting behavioral finance is so much more noble and safe? *Obviously my example is an oversimplification… I’m just bringing it up for argument’s sake.
TheBigBean Wrote: ------------------------------------------------------- > Viceroy Wrote: > -------------------------------------------------- > ----- > > joemontana Wrote: > > > -------------------------------------------------- > > > ----- > > Its company specific risk > > > is minimal – sports betting is not very risky > > > (take 10 bets blind; expect that you will > > lose/win > > > 5 and simply be down the bookie fee). > > > > > So is betting on red at the roulette, with the > > green (1/33 of your bet each time you bet) > being > > your booky fee. > > > > Investing isn’t gambling. > > > There is a considerable difference between a > betting exchange and a roulette wheel. That’s my point : in the blind-betting example posted by joemontana there isn’t.
This is a bad news for my frd who has already made over a million dollar in odds arbitrage trading !!! Seriously this is a good investment vehicle I dont know why they have not started this hedge fund earlier… I sit beside my friend who is a very succesful trader and he showed me how this work… it was really amazing. They don’t need to bribe the ref, but they spread rumors in the online forum, news papers, and trade with the flow… With big players joining the market, we can expect the market to be more efficient and hence his profit should reduce significantly!!
Wouldn’t touch it with a barge pole. Bit of marketing fluff. It is obviously targetting retail investors (fees/lack of liquidity). Any institutional investor who even thinks of investing shouldn’t be running money. It’s more something you would do in your own time. Who hasn’t tried sports arb (and failed miserably…). Things like betfair allow you to take bets off other amateurs who set their own miscalculated prices to bank free money (the arb part), so there is an opportunity… but they are very short lived and I wouldn’t pay someone to do it for me.
monki Wrote: ------------------------------------------------------- They don’t need to bribe > the ref, but they spread rumors in the online > forum, news papers, and trade with the flow… Not to sound totally innocent or think that this type of stuff doesn’t happen, but isn’t this your classic pump and dump technique (per se) and illegal?
monki Wrote: ------------------------------------------------------- They don’t need to bribe > the ref, but they spread rumors in the online > forum, news papers, and trade with the flow… Not to sound totally innocent or think that this type of stuff doesn’t happen, but isn’t this your classic pump and dump technique (per se) and illegal?