Two of my biggest passions are sports and the stock market.  Growing up playing sports taught me a number of life lessons and many that I apply to investing in the markets.  Competitiveness is important, such a strong desire to win that you are willing to work long hard hours with the aim of perfecting your craft.  In sports your competition is well defined while in markets you are not only competing with millions of participants that include computer algorithms with extreme speed, precisions and power, but also against your own personal emotional/mental challenges that make trading/investing a “sport” where very few are victorious, in the sense of outperforming the average market returns.  If you define success as simply having positive returns on your investment there is less work required and a much easier task to accomplish, but some of us have a determination to not just be ordinary, but to me extraordinary.

My passions for sports has transitioned from playing competitively to now betting on sports.  I mainly stick to Football betting because it is the sport I know the best, I consume the most, enjoy the most, and put the most time into.  This can segue quickly into investing where owning what you know tends to outperform simply due to the advantage of knowledge and familiarity.  Similar to trading, not many succeed in sports betting where a 55% win percentage is considered very good.  In trading I have historically been a 67-72% win percentage on trades while in sports betting I tend to be 60-63%.  In both you must employ risk management to survive as well as knowing proper capital allocation based on confidence levels.  In both you also can improve your odds of success by utilizing systematic approaches to take emotions out of the equation, each industry has seen rapid growth in tools & analytics to improve results.

In both sports betting and investing there are many strategies that can be used and individual need to come up with a suitable plan.  With investing some like to use technical analysis, others use fundamental analysis, and some (the ones I consider the best) utilize a hybrid approach.  With sports betting the fundamental approach would involve researching teams, watching film, and really understanding matchups to be the basis of your bet, and is considered the most difficult approach to really gain an edge.  A technical approach to football betting would be utilizing team momentum and things like ATS (Against the Spread) trends.

I think the reason I do well in both of these markets is due to my hybrid style. With investing I not only spend countless hours researching companies, looking at fundamental metrics, developing screeners, reading management commentaries and company presentations, and so much more, but I also use technical analysis with entry/exit decisions.  I also utilize sentiment from a broader view to identify inflection points for markets and individual stocks. Even further I follow institutional ownerships and option flows, the latter has long been the main pillar of my approach as a method to follow the “smart money.”  In Football betting I not only watch a lot of games, look at analytics and box scores, but also study ATS trends and situational trends.  Furthermore I apply a smart money approach to betting by utilizing the betting lines looking at movements, bet % versus $ percentage, and look for outliers in sentiment.  Sentiment can be very useful in sports betting as well looking at percentage of bets on a team with 25% and 75% the outer ranges when identifying potential overly pessimistic and overly optimistic public betting.

I can draw countless connections between the two and likely the reason I enjoy both so much even if they are emotional rollercoasters. Even down to a sillier connection like an injury to a key sports player impacting a team like a stock getting a downgrade, both likely temporary set-backs that do not change the fundamental story.  A coaching change in sports can have a major impact on a team, and similarly a top management change at a company can have a major impact for a stock.

If you put in the time & effort both sports betting and financial markets can be very lucrative.  Discipline is essential in both, yes you will have times you make degenerate trades in both, say taking some weekly call options into an earnings report in trading, or in sports betting throwing on that 5 team parlay.  The key is to offset these losers with many more winners, keep losses small, know when to not bet/trade, and scale properly when your research leads you to the highest degree of confidence conclusion.

Thanks for Reading

Joe