In sports betting, the term ”ROI” (Return on Investment) is perhaps the most commonly used indicator of measuring performance. However, unless a number of conditions are fulfilled, this indicator is to a large extent useless in comparing relative success between tipsters. And comparing relative success is likely what you want to do when making a decision on whom to follow and whom not to.
First of all, Absolute Return is a powerful complement to ROI when measuring long term performance. Let’s have a look at an example of this:
Tipster A has a ROI of 15% over the last 6 months and has placed 800 bets. Tipster B has a ROI of 9% during the same period of time and has placed 1,400 bets. Provided that the below validators are in place, so that the performance of each of the two can be verified, Tipster B is more successful. The reason is that Tipster B would have earned more units than Tipster A while at the same time operating at a lower risk (= higher number of picks) during the same period of time. Hence, Tipster B has a higher absolute return than Tipster A while his risk profile at the same time is lower.
However, to compare two tipsters it is of the highest importance to be able to review both tipsters’ spread sheets and winning curves. By using the information in the spread sheet you can validate the quality and correctness of the picks that have been communicated on platforms such as Twitter, a home page or an app, depending on what means of communication the tipster is using to interact with his or her audience. By using the winning curve, you can get an overview of the performance and get a graphical understanding of the risk profile of the tipster. In general, if Tipster A has sharper ups and downs in the curve than Tipster B, he or she is likely taking larger risks than Tipster B. By reviewing the winning curve you will likely be able to identify severe outliers. If a tipster is normally placing bets with a stake of 0.5–2 units and all of a sudden places a bet with a stake of 20 units, such a bet may have a significant effect on the ROI. When looking at the ROI as a stand-alone number, this kind of high risk behavior cannot easily be discovered. It is likely easier to identify it by reviewing the winning curve.
- A large number of bets placed, e.g. more than 1,000 bets placed. The higher the number of picks during a specific period of time, the better the quality of the ROI.
- Few or no outliers (abnormally heavy bets – e.g. 15 times bigger than the lowest stakes)
- Access to spread sheet and winning curve (to be able to identify abnormally high stakes and sharp movements)
We would recommend that you spend a lot of time to validate a tipster carefully before deciding on whether or not to follow. In summary, make sure to validate the tipster on the following parameters:
- Check the ROI in relation to the number of bets placed (make sure that the number of bets is large, say 1,000 picks or more; fewer bets = less relevance.
- Check the tipster’s absolute return during a specific time period and, if possible, compare with others that are using similar stakes.
- Validate the data that has been publicly communicated with what is in the spread sheet.
- Check for sharp ups and downs in the winning curve. The sharper the movements, the higher the risk profile.
PinchBet’s statistics is to be found here:
Due to the large number of picks we publish, we update the spread sheet at the end of each month.
Good luck with your betting!
The PinchBet team