By Kevin Pullein
Once, I signed over half my house to a girlfriend the day before she left me. Obviously, I didn’t know it was the day before she was going to leave me. Looking back, I can see lots of red flags being waved furiously. On the day I just smiled and wrote my name. If I could misread that situation, I told myself, I could misread any situation. Accept reality, Kevin.
UK bookmakers win more than £3 billion a year in bets on horses, dogs and sports. This means their customers lose more than £3bn a year. You and I belong to a group that collectively loses more than £3bn a year. Our only reasonable hope of winning money over time is to bet on things that are more likely than the odds imply.
If I see a bet and think the odds are too big, there are two possibilities. Either the bookmaker has made a mistake or I have. Which is more likely? Accept reality, Kevin.
Science in practice can be different from science in theory, but scientific theory says that when you get an idea you should try to prove it wrong, and only if you cannot prove it wrong should you accept the possibility that it might be right. Scientific theory is good theory.
Before taking a bet I try to understand why the bookmaker is offering those odds. Unless I know why they are offering 11-10 about something I think should be even money I cannot know if they have picked up on something important I have overlooked.
And when I feel that I understand why the bookmaker is offering those odds I go through the reasons one by one, with as fresh and open a mind as I can, and ask myself whether they are right. If I start off thinking a bet is good and I am wrong, there are two times I can find out: before I give the bookmaker my money or when the result comes in; before is better.
There is a lot of well-conducted research showing that flexible thinkers make better predictions than rigid thinkers. It started with academic Philip Tetlock’s study between 1984 and 2005 into expert political and economic judgements. He found that experts with dogmatic beliefs made worse predictions than experts without dogmatic beliefs.
There was no difference between dogmas, only between having any dogma and having no dogma. The more convinced someone was that they were right the more likely they were to be wrong.
You will not be surprised, therefore, to hear that there was an inverse relationship between how often someone appeared on television and the accuracy of their predictions. The more often someone appeared on television the less likely they were, on each occasion, to give accurate predictions. The 18th century writer Voltaire said: “Doubt is uncomfortable, but certainty is absurd.”
You should only bet with money you can afford to lose
One of the oldest and soundest pieces of gambling advice is that you should only bet with money you can afford to lose. Open a bank account you will use purely for betting. Use this and only this. How much should you deposit? It will vary from person to person, but it should satisfy this condition: if you lose it all, neither you nor anyone who depends on you will be inconvenienced in the slightest.
Even that 0.1 per cent of bettors who win money over time have losing runs; long losing runs. They are inevitable for everyone in any game that involves skill and chance. Stake each bet so that you could withstand an extraordinarily long losing run. Your priority should be that whatever happens today you will be able to play again tomorrow. And the next day, and the next day.
And I am not saying that if your balance dwindles to zero you should never deposit any more. The reality is that 99.9 per cent of bettors will lose money over time. But use such a moment to reflect. You would know what sort of questions to ask. On decisions with a financial cost I am not someone who wants to preach.