Ever seen a football match’s odds shorten dramatically based of the previous week’s results? Punters often weigh recent form far too heavily when assessing the true probability of an event.
Psychology of Punting
Ask people to choose the most important invention – the internet or the washing machine – and the majority will choose the former.
This is because, as economist Ha-Joon Chang argues, humans tend to overvalue the significance of more recent events: it feels as if the internet has revolutionised our lives, but when compared to household appliances, which helped liberate people from household work to find paid employment, the ability to poke a long-lost friend on Facebook seems less significant.
This tendency to weigh more heavily on recent information has been repeatedly demonstrated by psychologists (they refer to it as the “availability heuristic”) and it’s important to recognise this in-built bias if we are to be better punters.
Overvaluing Recent Form
For example, When Manny Pacquiao fought Juan Manuel Márquez for the third time in November 2011, Pacquiao was the overwhelming favourite: available at around 1.14 to Márquez’s 12.0. This was despite the fact that, in their previous two meetings, the pair had been closely matched, drawing in their first bout and facing a split decision in their second.
The market was clearly reacting to what they considered a recent divergence of form: after their second fight, Pacquiao went on to easily outclass his subsequent opponents, whereas Márquez battled through a number of closely-fought, drawn-out contests, including a loss to Floyd Mayweather.
Knowing what we know now – Pacquiao went on to win the third fight, but only with the help of a controversial judging decision and, a year later, was knocked-out by Márquez in a sixth-round stoppage in a fourth bout – it seems obvious that there should have never been such a discrepancy in their odds.
Horse Racing Recent Form
No matter what the sport, punters can constantly be guilty of this same crime of recency.
Horse racing provides examples of this on a daily basis. No matter what a horse’s ability or fitness level, there are numerous misfortunes that can limit its performance on a given day – ground conditions, draw, a poor break, a tactical mistake by the jockey, an illness – and yet, punters are often quick to discount an animal as in terminal decline after a bad result or two, forgetting that, not that long ago, they were able to run to a much higher level.
Fields of Omagh winning the 2006 Cox Plate at 18-1 as a nine-year old provides an apt example of this phenomenon. Despite repeatedly running well in the race in previous years, and despite winning a Group 1 only seven months previously, the market largely discounted his chances of victory after a couple of lacklustre efforts in the run-up suggested a horse past his best.
Managing Overall & Recent Form
To ensure that they are not guilty of this recency bias, many successful punters will keep two ratings for horses: a master rating that reflects the best form the horse has ever run to; and a rating that is more reflective of recent form. This allows them to be more aware of instances where, when circumstances are right, a horse might “surprisingly” outperform the form they have demonstrated of late.
Whether you keep ratings or not, though – and no matter what your sport – asking yourself the question, “Who would win this if they all performed at their very best?” will help you to ensure that you are not overvaluing the recent over the distant.
All of this is not to say that recent form is not important at all, of course, and will point you in the direction of plenty of winners. But they will usually be winners at shorter odds that every other punter has backed, and that don’t represent value.
Long-term profitability comes from having a balanced approach to analysing an event. Take more consideration into the overall form, and less about what’s just occurred and you’ll be on the way to becoming a smarter punter.
BetSmart with the Betfair Hub
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