Understanding the 80/20 principle Will revolutionise YOUR betting (WHY tipsters GET bad press)
August 15, 2014 by Jonathan
Filed under Recent Articles
This week we have a guest post from Christian Jackman at tipstersupermarket . The following article echoes my thoughts exactly regarding why so many punters fail to make a profit following a tipster service that is profitable. The core message is “you need to follow a tipster for at least 12 months”. Those subscribers who bail outat the first sign of losing month ultimately miss out on the long term returns . We also covered this situation in our article …. Are you an investor or a gambler “why some punters make a profit whilst others don’t “
I’m continually emailed by my subscribers saying they just can’t make betting pay.
And yet I know they are using some of the same services that I am, and I’m seeing good long term profits from them.
So what’s the deal?
How can we be using the same service and yet have wildly different experiences?
It’s all because I understand this (now famous) principle.
And once I did, it revolutionised the way I look at my results.
It’s called the Pareto principle (or the 80/20 law) and according to wikipedia…
…“it states that, for many events, roughly 80% of the effects come from 20% of the causes.”
It is a common rule of thumb in business; e.g., “80% of your sales come from 20% of your clients”
And it’s also prevalent in betting.
In my experience 80% of your yearly profits will come from 20% of the systems/services within your portfolio.
But much more importantly than that…
80% Of The Profits Will Come From 20% Of The Year.
By that I mean in any given year 80% of the profits will be generated in pretty much two and a half months.
More accurately I’ve found that nearly all the profits from a years’ betting are generated in just 2 months of the year.
That means that for the other ten months you’re pretty much treading water or maybe even losing money.
It sounds crazy I know but I’d like you to check right now.
Look at the past year’s results for either your own selections or those of a tipster you have followed.
I’m willing to bet the profits follow this pattern almost to the letter.
Often it can be even more extreme than 80/20 (especially if you’re betting longer priced selections).
And I want to take you through a couple of case studies now that show how extreme the profit distribution can be.
Both are services from my own portfolio that I have been a member of for a long time.
Case Study 1: BetAlchemist
BetAlchemist had an impressive 2013 and following him I made an impressive 116.49 points profit(click here to see for yourself).
Here’s the profit breakdown…
Jan -3.68
Feb 4.86
Mar 76.67
Apr 23.70
May -11.2 . Bizarrely quite a few subscribers would stop using the service at this point
Jun -12.91
Jul 8.19
Aug -11.09 more subscribers would stop using the service at this point
Sept 17.44
Oct 47.02
Nov -18.11 more subscribers would stop using the service at this point
Dec -4.4
Total 116.49
123.69 Points Profit Were Made In Just 2 Months… That Means 106% Of The Profits Were Made In Just 17% Of The Year.
So for the other ten months of the year I lost money. It was a case of one step forward and two steps back.
But I didn’t mind.
I saw good profits at the end of the year and I’m seeing good profits this year as well.
But how many punters do you think left during the lean times?
I would imagine it would have been the majority.
Case Study 2: The Gambling Don
The Gambling Don had a very profitable 2013 as well, amassing 148.75 points profit (click here to see for yourself).
Here’s the breakdown…
Jan -12.65
Feb -39.22
Mar 89.90
Apr 63.53
May -51.61
Jun 13.06
Jul 35.71
Aug -16.18
Sept 51.52
Oct -24.35
Nov 75.89
Dec -36.85
Total 148.75
165.79 Points Profit Were Made In Just 2 Months… That Means 111% Of The Profits Were Made In Just 17% Of The Year.
Again we made an overall loss during the other ten months of the year and again this wasn’t a problem for me.
But I know a lot of punters bailed during the bad months.
But I’ve stuck with him and been rewarded with an exceptional 2014 so far.
Case Study 3: Elite Ratings System 90 Day Live Trial
For the final case study I’m going to use the weekly results from the trial here.
All the selections were recorded live in front of the community so the results figures are completely transparent.
Elite Ratings System Weekly Results…..
122.12 Points profit Were Made In Just 2 Weeks… That Means over 70% Of The Profits Were Made in Just Over 15% Of The Time.
This example is a bit closer to the magic 80/20 figure.
But it still involves weeks of treading water, winning a bit then losing a bit.
As I said before I believe if you look back at systems/services in your portfolio you’ll see the same pattern as well.
And this is the main reason why only 2% of punters make money
There are plenty of tipster services and systems out there that have proven long term profitability and yet still very, very few punters actually make any money from betting.
People often talk about discipline but that only tells half the story.
In My Opinion The Reason Is Simply Because Punters Don’t Fully Grasp The Haphazard Nature Of Profits.
Unfortunately in this betting game the profits aren’t uniform.
If they were it would be easy.
If every system or service made money every day or even every week it wouldn’t require any discipline at all.
We Would All Like To See Our Betting Banks Gradually Increase Day After Day, Week After Week.
Sadly This Is A Pipe Dream.
It’s More Than Likely That You’ll Win Most Of The Yearly Profits In Just A Couple Of Months.
The rest of the time you are generally treading water.
And that’s hard to cope with.
Especially if you’re using a 3rd party service.
It’s difficult to keep paying subscriber fees if your betting bank is going nowhere or even worse is on a down turn.
It feels like you’re losing out twice.
We all know you need discipline and you don’t want to be on the tipster service merry-go-round, signing up to a different service every week.
But on the flip side there’s no point in staying on a losing service if it’s never going to win.
So How Do You Know The Difference Between A Rubbish Service That’s Never Going To Profit And A Decent Service That Has An Exceptional Month Just Around The Corner?
Well, there are a couple of things you can do.
1. Firstly make sure you join a service that has a proven track record with full results.
If it’s been profitable in the past it’s much more likely to be profitable moving forward.
2. Secondly be wary of brand new services.
Unless it comes from a trusted source or has openly been proofed to the public treat it with caution.
3. Thirdly only trust those who have earned your trust.
If you get a referral out of the blue from someone who has never contacted you before ignore it.
I get these emails all the time from unknown senders.
They send you a link to a website with lots of flashy graphics and fantastic profit claims.
It can be very tempting to try it out but I’ve found it’s best just to delete the emails.
Only trust recommendations from those sources who have earnt your trust.
If every time someone emails you they are asking for money my advice is to unsubscribe from their newsletters.
Once I began this course of action my email inbox is a lot less cluttered and I enjoy opening the betting related emails because I know I’m getting some good content from the senders.
So In Conclusion…Give Your Own Systems And Paid Services Time.
If you think you’ve developed a decent system or methodology for picking bets don’t dump it during a losing spell.
Keep paper trading to see if you’ll be rewarded in the long run.
As for 3rd party services, you simply can’t jump in and out of different ones week after week.
If you quit services time and time again it’s impossible to make money from betting long term.
You Need To Find A Profitable System/Service And Stick With It.
There are plenty out there.
It’s just very few punters ever stick with one long enough to reap the rewards.
This post went on a little longer than I had anticipated but I hope you found some value in it.
Think about how Pareto’s principle affects your own betting.
I think it will help you out in the long term. Understanding it made a world of difference to me.
I hope you’ve enjoyed this blog post. If you have any thoughts or questions please comment below.
Take care, Kristian Jackman
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