3 ms·

Bob Stoll: the man who shook up Vegas (2007)

37 points by Rod 17y ago

deleted 17y ago
[deleted]
nsoonhui 17y ago
Is this survivor bias? I mean, there are thousands of handicappers, or bettors, who employ "scientific methods" and "mathematical models" to try to win at betting. But only a few succeed. And the successful ones will get featured in wsj and news media. Why we should attribute Bob's success to skills, rather then luck?
- Rod 17y ago
  I think you should stop reading Taleb and Gladwell's pseudo-deep books. The difference between luck and skill is consistency. If one is "lucky" for 20 years straight, then it's not luck, it's actual skill. Sure, if you have enough monkeys typing, one will type a Shakespeare's play, but that is just an academic example. Probability is just a way of modeling uncertainty...
  - wglb 17y ago
    I agree that Gladwell is pseudo, but Taleb is quite on the money and to me is deeply thoughtful.
  - TrevorJ 17y ago
    Or at least the likelihood that it is luck goes way down. There is still a small statistical chance that somebody could have a crazy winning streak by chance. Really good point though.
    - Rod 17y ago
      I agree with your analysis, but I disagree with your assumptions. For starters, I don't see any difference between Bob Stoll's publishing his handicapping analyses and Wall Street analysts publishing their analyses. Well, I actually see one difference: Bob Stoll is probably more trustworthy than a Wall Street analyst. It's tempting to think of investing as tossing coins, i.e., as random experiments. If that were the case, then, yes, after 20 years of consistent results there would still be a small chance that such success were due to luck. However, investing is not tossing coins. The market changes all the time, so, in fact, one is not playing the same random experiment over and over again. One is playing different random experiments each day, and each day is pretty much unique. Let us not get carried away by probability and statistics here. Probability is a way of dealing with uncertainty. Lacking information, one assumes a priori that the probability that the coin toss will he heads / tails is 0.5, but that's just a model, it's not the real world. If you toss the coin using a mechanical device that applies always the same force to the coin, and that is rigidly attached to a table, for instance, then you don't have a random experiment. You have a reproducible experiment. Knowing the force applied to the coin, and the geometry of the problem, you can solve Newton's equations and fluid dynamics equations to predict how the coin will land. There's still uncertainty and error, but I doubt the probabilities will still be 50% heads and 50% tails if you toss the coin always the same way using the mechanical device. Stanford professor Persi Diaconis wrote a beautiful paper on it years ago... So, if coin tossing in the real world is not even a true random experiment, how can investing be????? I used to be a trader. Let me tell you. Trading is not coin tossing. Trading is basically legalized piracy. It requires skill. So does investing.
  - nkurz 17y ago
    The difference between luck and skill is consistency. Well, that and the ability to predict future performance. It seems like Bob has around a 55% success rate. How large would the pool of 'advisors' need to be before we expect at least one person to achieve this rate by luck? I don't know, but it seems like a reasonable question. Note also that the article mentions that he has had consecutive 'off years', which is quite counter to '20 years straight'. The variance seems like it would be a good indication of the relative strength of luck and skill. Any ideas on how to model this mathematically?
- TriinT 17y ago
  Did you check his performance? It's rather consistent. The real world is very complex. However, there are "patterns", and spotting these patterns can be very profitable. I used to do that all the time when I was working for a hedge fund. Luck plays a part, but skill exists. Only losers attribute the success of others solely to luck.
miracle 17y ago
When I was studying in Zurich, I also met someone who created a similar program: http://www.rogerkaufmann.ch/dsa.htm http://www.rogerkaufmann.ch/dsa.htm He never tried to make any money out of it though, and never shared the informations with anyone.
blang 17y ago
One thing I get from this article is that the US is missing out on a lot of tax revenue by keeping online sports betting illegal.
- TriinT 17y ago
  That's how powerful the casino lobby is...
xenophanes 17y ago
Stoll's website says he's 56% lifetime record on football "best bets" and 54% accuracy on "strong opinions". (The article omits this and just shows a chart with some unusually strong years.) The article says: > Gamblers wagering against a point spread must win more than half their bets (about 53%) to make a profit and must be closer to 55% to make a comfortable living. So even if we accept everything we're being told, he's only barely ahead.

37 points by Rod 17y ago

deleted 17y ago

[deleted]

Is this survivor bias? I mean, there are thousands of handicappers, or bettors, who employ "scientific methods" and "mathematical models" to try to win at betting. But only a few succeed. And the successful ones will get featured in wsj and news media. Why we should attribute Bob's success to skills, rather then luck?

Rod 17y ago
I think you should stop reading Taleb and Gladwell's pseudo-deep books. The difference between luck and skill is consistency. If one is "lucky" for 20 years straight, then it's not luck, it's actual skill. Sure, if you have enough monkeys typing, one will type a Shakespeare's play, but that is just an academic example. Probability is just a way of modeling uncertainty...
- wglb 17y ago
  I agree that Gladwell is pseudo, but Taleb is quite on the money and to me is deeply thoughtful.
- TrevorJ 17y ago
  Or at least the likelihood that it is luck goes way down. There is still a small statistical chance that somebody could have a crazy winning streak by chance. Really good point though.
  - Rod 17y ago
    I agree with your analysis, but I disagree with your assumptions. For starters, I don't see any difference between Bob Stoll's publishing his handicapping analyses and Wall Street analysts publishing their analyses. Well, I actually see one difference: Bob Stoll is probably more trustworthy than a Wall Street analyst. It's tempting to think of investing as tossing coins, i.e., as random experiments. If that were the case, then, yes, after 20 years of consistent results there would still be a small chance that such success were due to luck. However, investing is not tossing coins. The market changes all the time, so, in fact, one is not playing the same random experiment over and over again. One is playing different random experiments each day, and each day is pretty much unique. Let us not get carried away by probability and statistics here. Probability is a way of dealing with uncertainty. Lacking information, one assumes a priori that the probability that the coin toss will he heads / tails is 0.5, but that's just a model, it's not the real world. If you toss the coin using a mechanical device that applies always the same force to the coin, and that is rigidly attached to a table, for instance, then you don't have a random experiment. You have a reproducible experiment. Knowing the force applied to the coin, and the geometry of the problem, you can solve Newton's equations and fluid dynamics equations to predict how the coin will land. There's still uncertainty and error, but I doubt the probabilities will still be 50% heads and 50% tails if you toss the coin always the same way using the mechanical device. Stanford professor Persi Diaconis wrote a beautiful paper on it years ago... So, if coin tossing in the real world is not even a true random experiment, how can investing be????? I used to be a trader. Let me tell you. Trading is not coin tossing. Trading is basically legalized piracy. It requires skill. So does investing.
- nkurz 17y ago
  The difference between luck and skill is consistency. Well, that and the ability to predict future performance. It seems like Bob has around a 55% success rate. How large would the pool of 'advisors' need to be before we expect at least one person to achieve this rate by luck? I don't know, but it seems like a reasonable question. Note also that the article mentions that he has had consecutive 'off years', which is quite counter to '20 years straight'. The variance seems like it would be a good indication of the relative strength of luck and skill. Any ideas on how to model this mathematically?
TriinT 17y ago
Did you check his performance? It's rather consistent. The real world is very complex. However, there are "patterns", and spotting these patterns can be very profitable. I used to do that all the time when I was working for a hedge fund. Luck plays a part, but skill exists. Only losers attribute the success of others solely to luck.

miracle 17y ago

When I was studying in Zurich, I also met someone who created a similar program: http://www.rogerkaufmann.ch/dsa.htm http://www.rogerkaufmann.ch/dsa.htm He never tried to make any money out of it though, and never shared the informations with anyone.

blang 17y ago

One thing I get from this article is that the US is missing out on a lot of tax revenue by keeping online sports betting illegal.

TriinT 17y ago
That's how powerful the casino lobby is...

xenophanes 17y ago

Stoll's website says he's 56% lifetime record on football "best bets" and 54% accuracy on "strong opinions". (The article omits this and just shows a chart with some unusually strong years.) The article says: > Gamblers wagering against a point spread must win more than half their bets (about 53%) to make a profit and must be closer to 55% to make a comfortable living. So even if we accept everything we're being told, he's only barely ahead.