Understanding this principle revolutionised my betting.

By on June 12, 2014

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
Jun -12.91
Jul 8.19
Aug -11.09
Sept 17.44
Oct 47.02
Nov -18.11
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.

Here’s the weekly profit chart…

 

[show-rjqc id=”7″]

 

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,
Kris

 
 

10 Comments

  1. Pedro Sousa

    July 11, 2014 at 5:12 pm

    Hello Kris,

    Follow this post and thinking…

    Imagine i subscribe your service this month, and the most profit months where april and May…

    And now it will be red’s almost of the months??

    Do i have to wait 6 or 7 months to be in Profit?

    I think a service that you pay and in the end of the month can’t be paid by the profits isn’t a good service…
    Because you will lost money 2 times, by the betting and by the subscrition.

    Concluding:

    I subscribe your service 3 days ago, in the end (and following the poor results ), i will be without money, and no money too to pay the weekly subscrition…That’s not a good service…

    But let me see and wait until the end…

    Pedro Sousa

  2. AAdamu

    June 13, 2014 at 1:08 pm

    Hi Kris, I have known about the Pareto law(c. 1908, and tried to identify the 20% parameters that yield 80% winners.
    In reality, tipsters operate on the 20% factors just like ourselves.

    So to help us, tell us the 20% parameters and not the tipsters that have achieved 20% in their services. For instance you pay for the services as much as your bets, implying that the value of your bets have an added cost(i.e. the rates of the tipster you pay).

    I hope you discover the 20% parameters and share it with us your followers!

    Regards!
    AAdamu

  3. mick

    June 12, 2014 at 1:15 pm

    well i joined your service a couple of weeks ago kris and thought you had all the answers to my problems according to your presentation but alas!! ..no good ..and then you reccomend me to chris oakly who recomends hes got all the winners covered with his “predict the winners” software ..well a give that ago to but that wasnt any good because his “predict the winners ” software wasnt predicting winners, ..if the soft ware was any good surely it must get more than 3/4 winners a day than , ..non or 1/2 …so i had to jib that aswell ..so am still out there ..looking !!!

    • Kristian Jackman

      June 12, 2014 at 2:24 pm

      Ah Mick you sound like the classic example of a punter stuck on the tipster service merry-go-round.

      Signing up for a few weeks and then quitting and moving on to the next one.

      You’re never going to find that Holy Grail I fear you’re looking for.

      I wish you all the best.

  4. Roger

    June 12, 2014 at 12:06 pm

    This is one of the best articles on betting that I have seen for many a while. It shows that people should not be betting at all if they have insufficient funds to weather the inevitable losing periods. The reason people bail out of services is because they are betting with money they cannot afford to lose and fear encroaches into their mind set. The old adage “only bet with money you can afford to lose” is in my opinion very true. Being prepared to lose your entire bank should ensure you have the confidence to stick it out and then take advantage of the profitable periods.

  5. harry

    June 12, 2014 at 11:05 am

    all we need to do now is to ascertain which 2 months are going to be profitable then we can save ourselves a lot of trouble,over to you mystic meg

  6. chris

    June 12, 2014 at 10:51 am

    Fri 22-1, 11-1
    Sat, Sun, Mon – zilch
    Tues 16-1, 8-1 7-1(from bigger) plus 3 big 2nds
    Weds 25-1 11-2 so I thought I had it made at Hamilton last night with 3 longshots – well wrong again!
    Just to illustrate the short term fluctuations one faces, rather than monthly/annual ones.
    I shall give your careful reflection in the days ahead.

  7. Tony GrantTony Grant

    June 12, 2014 at 10:30 am

    Hey Kris, your post is a superb analysis and guidance for system subscribers.
    The confidence to stick with a system is of course one issue that is hard to sustain, which is why I personally always look towards services where I feel a connection with the tipster.
    Of course, in the real world, where discipline is often sidelined by those major adversaries, Sod’s Law and Mindset, isn’t it always the case that the winning bet was on the day your internet went down, visitors arrived just as you were about to place the bets, or any number of other such factors.
    Only the other day, I was looking at one of my systems draining my Betfair balance, the day was poor and the money was slowly going down the pan.
    I was so very close to just shutting the system down for the day or at very least, reducing the odds but then thought, let it roll. The last race of the day pulled in a very high priced winner of around 40/1 which not only sorted out the deficit but put me so very clearly into a nice profit on the day.
    I firmly believe that the day you walk away is the day you would have won.
    Not that Im trapped in this game, but I do choose to make my living from it and the words you mention above are very definitely a good lesson for others who also would wish to win over the longer term rather than seeking the quick fix of a daily winner.

  8. DAVE

    June 12, 2014 at 10:11 am

    Kris, you are spot on here. I have been as guilty of this as the next man or woman, over the past 12 years. The trouble is, of course, those of us that have been determined to make a living out of gambling need to see a monthly income, and you can only do that if you have (a) enough money to live on for a year, as well as a sizable bank to gamble with, and (b) a system which is proven over many years. I have long since come round to the view that for those of us not wealthy enough to take this risk, the ONLY way to make a living from gambling is not to rely on the OUTCOME of events, but to become adept at TRADING the price movements of events.

    • Kristian Jackman

      June 12, 2014 at 2:21 pm

      You’re absolutely right Dave. Professionals are professionals because they have massive betting banks and can bet thousands on a horse.

      Trading is the key. The majority of professionals nowadays are traders on Betfair.

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