Avoid pratfalls in the betting comedy of errors by copying serious actors

Oliver Hardy said: “Nobody is dumber than a dumb man who thinks he is smart.”

He was talking about his screen persona as half of the comedy double act with Stan Laurel. He could have been speaking about what he did when he left the film set. He spent afternoons at racetracks, where he lost heavily.

Nearly everyone thinks they are smart when they are gambling, and nearly everyone must be wrong. Between April 2016 and March 2017 bettors in Britain lost about £3.5 billion betting on horses, dogs and sports.

If nobody is dumber than a dumb man who thinks he is smart perhaps we dumb men and women are smartest when we recognise that we are dumb.

I remember Bruce Springsteen giving a speech when accepting an award. It was a delightful speech in which he spoke among many other things about the importance for all of us of trying not to be stupid.

A good place to start, I feel, is by accepting that we can be stupid and often are.

If bettors lost £3.5bn in 12 months bookmakers must have won £3.5bn. They are all good, but some are even better than others at certain things. One way of trying not to be dumb when betting is by following people we know to be outstandingly smart.

I bet mostly in minor markets on football matches. I have noticed that some bookmakers are especially good at particular things. I am reluctant to oppose them, though I will after a careful consideration if I still think this is one of those unusually rare occasions when they are wrong. But when they agree with me that another bookmaker is wrong my confidence rises. I add their expertise to whatever I know.

More from Kevin Pullein

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If there is one bookmaker that keeps beating you there are two possible reasons: either they have been luckier than other bookmakers or they are better than them in the markets in which they have been beating you.

Consider both, and dig a bit deeper. Does that bookmaker consistently take a slightly different view from other bookmakers? Are they sweeter on the favourites? In all games or only some?

Perhaps the beginning of wisdom is recognising that we are not wise. Socrates in my estimation was the best of the ancient Greek philosophers. He did not think he knew much, which is why he asked innocent questions like a child who keeps saying: "why?".

When somebody said Socrates was the wisest man in Athens he did not believe them. He spoke to people he thought were wiser. Then he discovered that they did not know any more than he knew, but unlike him they did not realise how little they knew. So, Socrates decided, he probably was the wisest man in Athens.

Another way in which we can try not to be dumb when betting is by accepting that things change.

Nassim Nicholas Taleb is a financier turned philosopher. He says he does not know how or when things will change, only that they will. In his book Antifragile he said that wherever possible we should organise our lives so that change, however or whenever it happens, will help us rather than hurt us.

Taleb bets on large changes in share prices. He takes options on large rises and large falls. He loses money almost every day but believes that every few years there will be a moment of turmoil in financial markets, which will shoot up or down, and he will get back all of his losses and make a handsome profit on top. He does not know how or when these moments will occur but believes they occur more often than most other investors recognise.

After the financial crisis of 2008 and 2009 Taleb said: “We have billions under management now, and we still know nothing.”

Taleb bets on things moving from the centre to an extreme. He says the economy is not like sport. He is withering in his scorn of researchers who model the economy as though it were a sport.

I agree with Taleb and think that for sport it is generally a good idea to do things the other way round. Any modest success I have enjoyed up until now betting on football has come mostly from betting on things moving from an extreme back toward the middle.

Teams at a given level usually score and concede a certain number of goals, win and lose a certain number of corners, free kicks, throw-ins and goal kicks. If for a short time one team do something very different there are two possibilities: either they genuinely play in a dramatically different way from other teams who get similar results, or else something weird has happened that will probably not continue.

Most gamblers bet on the first. Bookmakers know that nearly always the second is more likely. That is why on their websites they will highlight something unusual that has just happened and invite you to bet on it happening again. This is another situation in which we can try not to be silly by swapping sides and betting like people that we know to be clever.

We do not want to end up like Oliver Hardy twiddling his bow tie and complaining: “Here’s another nice mess you’ve gotten me into.”

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