What do you do when the available action doesn't offer positive expected value? Sometimes staying in the black means sitting it out.
The outlook for the smart sports investor isn't exactly promising as we review the odds and lines for NFL Week 8, which makes this a perfect time to talk about something no one really likes to discuss: having the discipline to lay off when the numbers don't support a positive expected value.
I can already hear the sound of hundreds of mouse clicks, browser tabs being closed, and I get it. You want action. You wait all week for the next slate of NFL games, and you'll be damned if you're just going to sit on the sidelines and wait an entire extra week to get money on the table and sweat the scores.
Stay with me here! I'll give you a halfway decent tip on a coin-flip parlay at the end of this.A Better Bettor Mindset
The sports investor who comes out ahead on a regular basis, over the long haul, is the person who sticks with the +EV plays. One of the most difficult things to do in this business is to adopt the mentality that making +EV plays is actually "winning," even when a specific bet doesn't cash, and even when no action is taken. It's been proven time and again that +EV plays lead to sustained profit over a long period of time, so as long as you stick with a consistent string of +EV choices, you're making money.
Making bad bets costs money. It doesn't provide long-term profit. Here's a real-world example from this coming week's games.
The Houston Texans are projected at 60 percent true odds, but the current moneyline at 5Dimes.com is -340, which converts to a 29 percent payout. Put $100 on this game, and you'll get $29 in return. Sounds like a great deal! It's not. At only 60 percent true odds, the Texans will win six out of 10 such matchups, and those six wins each pay $29 on a $100 bet, so let's calculate it out:
- Matchup 1, Win $29
- Matchup 2, Win $29
- Matchup 3, Win $29
- Matchup 4, Win $29
- Matchup 5, Win $29
- Matchup 6, Win $29
- Total wins: $174
- Matchup 7, Lose $100
- Matchup 8, Lose $100
- Matchup 9, Lose $100
- Matchup 10, Lose $100
- Total losses: $400
Taking that bet over the long haul leads to losses of $226 ($174 - $400), so in reality, placing that bet even once is a loss because you're playing for sub-zero return on investment.
Keep that $100 in your pocket, and you've won.
If you use my expected value formula from last week's column (and the week before that), you'll see that action on the Texans comes out to a -23 percent EV. Do the smart thing and always avoid bets like that, even if it means not taking any action at all on a given weekend.Parlay Up!
Now that I've said all that, there is one promising game on the docket this Sunday. The Panthers have true odds of 57 percent and the current 5Dimes moneyline is +110, which equates to a 20 percent expected value. By the numbers, that's a +EV play and worth taking a look at.
There is also a three-team parlay that might make sense, if you don't mind taking action on true odds that are less than 50 percent. The Rams, Steelers, and Eagles have total true odds of 47percent at a 152 percent payout* (again, using 5Dimes.com moneylines), which is an expected value of 17 percent. That beats the juice, so it's something to consider. (See my column from last week for details on calculating expected value on parlays.)
*Rams -440, Steelers -360, Eagles -165; if those lines have changed by the time you take the action, you'll want to recalculate the EV
I typically prefer to take action on true odds no lower than 48 percent, but with a long-term return on investment at 17 percent, it's tough to turn it down. Flip a coin, because that's basically what this parlay is.
(How many of you took my suggestion on that Chiefs/Falcons parlay? If you did, I hope you're enjoying that payout!)
So there it is. One straight-up bet and one possible parlay bet. It's not a ton of action, but at least it's all +EV, and that's how we sustain profits!
As always, good luck out there this weekend, and if you have questions or comments you can find me on Twitter @HookSlide23!