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Sportsbettors of Reddit, what is the best strats for online sports betting?
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What is The ZCode System, Is it The Best Online Sports Betting Tool?
Memorial Tournament Preview Blog
submitted by -elbisreverri- to barstoolsports [link] [comments]
Since Riggs, Trent, and Frankie have turned their golf positions at Barstool into less blogging and more playing with themselves and selling $50 cases of soda, I decided to take a dull, butter knife stab at a preview blog for this weekend’s Memorial Tournament. Last Week
Real quick let’s talk about how much we should all hate the PGA after Sunday’s off-air debacle, and then about some questionable feature groups this week. For weather reasons on Sunday, the Workday final round tee times were moved up so players could finish before incoming storms. Great, that all makes sense. But somehow the PGA was not able to broadcast the round on TV, and when they did have to kill the live broadcast, they didn’t even mention where to go watch the rest of the tournament. THERE ARE NO OTHER FUCKING SPORTS ON, WHAT COULD CBS HAVE MADE PRIORITY OVER THIS FINAL ROUND? No seriously, someone please tell me because I would love to know what aired on CBS from 11 am to 3 pm instead of live sports. Can we also talk about how terrible the Thursday/Friday coverage is every weekend on all networks? You usually get 2-4 featured groups you can stream online from 9-3 (even these groups you often need NBC Sports Gold to watch), and then get maybe 3 hours of full coverage in a TV broadcast. There is legitimately a channel called the Golf Channel, who are airing a shitty preview/talk show while you are missing coverage. Here’s a fucking mad idea - put live golf on the golf channel before the major networks get prime coverage.
Then we got a look yesterday at the featured groups for the Memorial. How do you fuck this up? If you are younger than 70 and even sporadically watch golf, you could do this job better than whoever does it for the PGA. Here’s the formula: Brooks Koepka makes a joke about Bryson Dechambeau using steroids one week ago = you put them in the same group. Golf has so little drama because all these guys are friends and making millions of dollars even when they aren’t winning. Fans need these storylines/rivalries to be buffed up, not ignored because they might hurt Bryson's feelings. This Week
As far as a course preview, we get a strange twist this week with the players coming back to Muirfield, who just hosted the Workday Charity Tournament. I’ve been watching golf for a long ass time and cannot remember the last time this happened, but it’s not a major headline at all so maybe this does happen on occasion. Either way the setup this weekend will look different than last weekend, with much faster greens, thicker rough, and some changes in tee box locations. I think we see some youngeinexperienced players struggle with the change in green speeds, especially since they just played these same greens and they were rolling like carpet (stimpmeter will go from 11 to 13.5). My gut tells me the winner is either a veteran or someone who didn’t play here last week. This would rule out guys like Hovland, Burns, Merritt, Niemann, etc.
Finally, we have to mention that Eldrick Tiger Woods returns to the field this week. I’m looking at his +2000 odds and hate the value because we have no idea where his game is at right now. That being said, Tiger has won the Memorial five times and placed T9 last year, and T23 the year before. I will root for Tiger to win every tournament he enters, but I won’t look at a future for him at these low odds, and for his first post-break golf since The Match.
Now let’s go over wagers this weekend and what you should look for. I am usually not a fan of betting on outright winners, before any golf has been played. The odds always look so good but you will rarely have a profitable year trying to bet winners every week. That being said, here are some of the best value picks IMO.
- Dechambeau +850
- This man is -69 (nice) in his 4 tournaments since the resumption of the season, with final results of 3rd, 8th, 6th, and 1st. Not only is he launching drives 10% further than the field consistently, but his confidence is sky high and that mental edge goes a long way. Bryson also won here 2 years and 40 pounds ago, so he does like this course. But let’s not forget what a whiny bitch he is. Give me odds on if he will punch a cameraman this week and I would hammer yes.
- Rory McIlroy/Justin Thomas +950
- Rory holds the current #1 world golf ranking, and JT holds the current #1 FedEx cup ranking. Neither golfer has won since returning from quarantine, however they each grabbed a trophy or two early in the season (pre-pandemic). Both have seen some inconsistencies in the past month, with over par rounds or missed cuts, but undeniably still playing great golf. You might want to think about JT’s state of mind after blowing a lead and then a playoff last weekend, but I still like him to show up and be in the mix.
- DJ +1500
- DJ recently daddy-dicked Brendan Todd in the final round of the Travelers, starting his final round 2 shots behind and leaving with a 1 shot victory (6 shots ahead of Todd). He might win, he might not, either way he’s going home to Paulina Gretzky and a Johnny Depp style lunch spread.
- Koepka +1750
- I’m going to choose to ignore Brooks’ round one 74 at the Workday this weekend, followed up by a missed cut. His previous two tournaments he posted 8 consecutive rounds under par, and a Sunday 65 to place 7th at the RBC Heritage. That being said, in my brief research it looks like his best finish at the Memorial was T31 in 2017, so maybe he hates this course. But Petty King’s hate for everyone besides himself is a great motivator. Can’t wait until we get a “suck on that Faldo” on a hot mic.
- Morikawa +2000
- My guy Collin is less than a year removed from his amateur status, and has now made 24/25 cuts to start his career. Three weeks ago he lipped out a 3 footer to lose in a playoff, had a rough 2 weeks at the RBC and Travelers, but then he came right back and won in a playoff this past weekend. This dude is a sniper from the fairway, but can he stay straight off the tee and hole some putts? 2 playoffs in his last 4 tournaments would indicate yes.
- Cantlay/Matsuyama/Rose/Kuchar +1250 to +6500
- All four of these guys have won the Memorial in the past, with Cantlay at the best odds trying to repeat his title from 2019. I sneaky love Justin Rose here who has been playing great golf, and reminds me of a slightly less hate-able version of Adam Scott. Always fun to root for Kuch daddy as well, but his association with Sketchers is unforgivable.
- Hovland/Simpson/Schauffele/Berger +2000 to +3000
- Three young studs who have won or come close to winning this season, and a veteran who has been playing lights out golf (Webby). I would not be surprised to see a slow start for Hovland after two disappointing Sundays in a row, but he is too good not to make a push if he makes the cut. Schauffele actually scares me, he is definitely the odds on favorite to be a serial killer after his PGA career (eh maybe Mickelson). But that focus and weird fatheson relationship has been working for him, and he’s sitting just a few spots outside the FedEx cup top 10 and playing great golf. Meanwhile Webby is sitting at #2 in the FedEx cup rankings with a win at the RBC Heritage and a top 10 at the Rocket Mortgage Classic. Side note, why is there a “t” in mortgage? Fuck that word.
My pick: once again reiterating I will likely not bet on a Sunday winner before Thursday starts, but if I was I would put my money on Justin Rose +4500 or Xander Schauffele +2500. Thursday Matchups
Easily the best way to bet on golf, and in my experience the most profitable. Here are a few picks I’ll be making before Thursday. Currently I am 4-2 betting matchups (last 4 PGA events) and I’ll track my picks moving forward. If I get to Jack Mac or Reags level of bad betting, I promise I’ll retire and not pretend I know what I’m talking about. I’m only going to pick matchups in the featured groups for Thursday. Nothing worse than betting on someone like Marc Leishman, and having to refresh the golf cast simulator thing instead of watching live play. Dechambeau (-115)
over Thomas (-105): everything is so planned out and calculated with Bryson, and his sit-out at the Workday feels like a part of his plan. Fucking hate rooting for this kid, but I see him coming in fresh against JT who blew an enormous lead last weekend. D. Johnson (even)
over Morikawa (-120): my favorite first round matchup bet. It seems counter-intuitive going against the guy who won at this course a few days ago, but don’t forget the major change this week will be how the greens roll. And Morikawa is 150th on tour in strokes gained with the putter. Lock it in. Take a flier - round 1 leader
I don’t think I’ve ever bet this prop but I’ve also never written a golf blog before so let’s take a shot here. I’ll put a half unit on it as well: Rickie Fowler +4000
Rick's finishes at the Memorial the past 3 years: T14, T8, solo 2nd. In 2017 when he placed 2nd, he shot an opening round 66. I also feel like I see him in the mix a lot in early rounds, but can’t quite put together those low weekend rounds.
That’s all I’ve got. Sorry it’s not funny but it’s better content than we’ve gotten out of Foreplay.
Let’s make some money and blow off work Thursday and Friday.
Let's talk about the mind tricks and psychological warfare being waged by cheaters, hackers, and RMT vendors in Tarkov, and what we can do about it. This is a long post, but Tarkov is worth it, and a TL;DR is provided at the top.
submitted by aerodreamz to EscapefromTarkov [link] [comments]
Edit: There's obviously big money at stake as I started receiving death threats the moment this post hit the front page on hot. Be careful with your personal info and probably best to avoid commenting here if you have doxxable details on your reddit account. Stay safe, it's just a game and not worth it. TL;DR:
- Tarkov is a crazy wild game with a bunch of people running around trying to do weird things. Remember that bizarre outcomes are just as likely (if not more) to be happenstance than suspicious behavior. Don't let others gaslight you into thinking every encounter is a hacker or cheater.
- Cheat sellers, RMT vendors, and their customers, all want to push the narrative that rule-breaking is far more common than it actually is, and that the game developers are ruining the game so you may as well just hack/cheat yourself to level the playing field. It's great for business as a seller, and it helps rationalize malicious actions as a customer. Spreading paranoia, mass outrage, and undermining the developers are CIA-level tactics to sow chaos and anarchy that benefits bad actors at the cost of everyone else.
- The best thing we can do is silence attempts by bad actors and focus on productive, positive discussions in Tarkov and let BSG (who are the only people who can do anything) do their jobs. They spend 65% of their resources on crushing bad actors and their profit margins, so this isn't an issue that's flying under their radar. As a community, the best voice we have against malicious behavior is deafening silence to starve it of attention and free publicity, minimizing the chances that they can sow enough fear and angst to radicalize players to get more customers.
First off, the point of this discussion is not to debate how prevalent cheating in Tarkov is. This sub already has more than enough speculation on that topic and as you read further along you'll see that letting fear and paranoia fester is exactly what bad faith agents in Tarkov want.
Wherever you have competition, you're going to have cheating. Whether it's Tarkov, Olympic sports, or the stock market. As long as there is competition, there will always
be someone who looks to gain an unfair edge, and it doesn't even matter if it's something as mundane and trivial as online chess, there's always going to be that guy who runs their opponents moves into a grandmaster-level AI because their enjoyment comes from that win at any cost.
However, despite the fact that bad faith competition exists in nearly every facet of life, it seems like the Tarkov community is far more paralyzed by fear, anger, and suspicion than any other competitive forum. Why is this?
- The game design makes it exceedingly difficult to discern bad faith actions from legitimate play. A naked level 1 with a TT pistol can accidentally get a lucky hipfire shot that instantly kills a fully kitted veteran who is highly skilled in the game. The incredibly punishing nature of the game also makes it so that deaths are highly impactful, which makes it difficult to "let go" of trying to figure out what went wrong. All put together, it means that players are forced to simply accept highly punishing deaths without being given any insight or explanation on how they were killed. 20 headshots with an R99 SMG in Apex Legends is incredibly obvious aimbotting. But in Tarkov, the fight is over with just 1, which leaves a lot of unanswered questions with no satisfying answers.
- Because the shared raid map system that Tarkov uses, players have a wide variety of objectives that lead to very differing goals, resulting in bizarre interactions where the original intentions of other other players is unclear. Someone who's hiding in a raid to wait for the violence to die down could be stumbled upon by some other person who is completely lost trying to find a quest objective, or wandering around exploring an obscure area trying to find easter eggs. From the vantage point of the hider, it seems suspicious they were hunted down by someone who had no reason to legitimately to hunt in the location that they were. In other words, players will frequently run into other players acting in inexplicable ways that can be easily misattributed to malice when it was just as likely to be happenstance.
- The lack of SBMM (skills-based matchmaking) means that all players are drawn from the same pool when forming raids. This means a complete new player to FPS genre entirely could be running face first into the most skilled players in the entire game. When the competition spans the entirety of the skill curve, it's incredibly difficult to know what is going on because player actions are often contrary to expectations of others. Chaos makes it easy to be suspicious about bad faith play because nobody is acting "logically" from each perspective. Naive players may charge in aggressively in silly ways that end up working by sheer luck that more experienced players will assume would only be as a result of unfair information. A very high skill player can take fights that they win with superior mechanics that most would assume you would only engage because of unfair aim.
The point is, this game is designed to breed suspicion, paranoia, and fear. Which is great in one way, because it's what makes it so exciting and fun to play. However, when channeled in the wrong way, is a serious problem because it's exactly what bad faith actors want. Let's think about various actors in Tarkov, and ask the question, "do they want people to believe that rule breaking is more or less prevalent than it actually is?"
CHEAT SELLERS: MORE
Because the narrative is, everyone is cheating, the game is unfair no matter what, every raid you load into has someone that is map-hacking, every fight you take is against someone who is aim-botting. Therefore, you should consider picking up some little helpers yourself to make it fair again, or be a naive idiot that willingly plays at a disadvantage while everyone else is using hacks. The idea that literally cheaters and hackers are infesting every single raid is probably the best possible sales pitch a cheat seller could have.
The few instances of cheating leads to fear and paranoia festering, prompting more people on the fringe to consider cheating themselves, leading to more cheating, more fear, more paranoia, more business.
RMT VENDORS: MORE
Because the narrative is, this game is filled with cheaters anyway, half the lobby is people who bought stuff with mom's credit card, and Nikita is setting out to personally reduce your happiness in life and the game is unrewarding and unplayable for a normal legitimate player that doesn't hack or make a full-time job out of Tarkov. Why bother doing all the pointless stupid grinds while you're dying 50 raids in a row to hackers or someone who bought all their gear with their credit card, when you can just buy a few little cheeki Roubles from the side and get to having fun in the game?
Negativity and toxicity toward both the existence of other bad faith players, as well as toward the game design itself, is inherently the best possible environment for a thriving RMT system. This is especially perfect for Tarkov because unlike other MMORPGs, it's much more likely that incremental changes will be more brutal rather than having power creep / loot creep / money creep, which fuels despair and more interest in RMT.
CHEAT/RMT USERS: MORE
This one is simple. If they can convince everyone that it's more common than it actually is, the more they can rationalize their own behavior. It's not that bad, everyone else is doing it anyway! Besides, it's not even that big of an advantage, some other cheaters cheat even harder! Some of you may have seen a recent thread where one individual texted "lmao I'm gonna turn off cheats for this group though, cuz these guys play legit."
As if playing legit was actually the minority situation for a massively mainstream FPS game.
THE AVERAGE PLAYER LIKE YOU AND ME: ?
It is human nature to rationalize defeat. When you face down failure with no explanation on why like in Tarkov, it's tempting to blame cheaters, hackers, etc. Different games often have different ways of rationalizing defeat. In team games like Overwatch or League of Legends, teammate-blaming is common to offload the burden onto random strangers. In solo matchup games like Starcraft II, race balance is often used by players who are frustrated that they lost. What's even more, these other games do an excellent job of explaining where you could have done better
, but players will still look for ways to blame someone other than themselves. It's no surprise that in Tarkov, fear and suspicion of bad faith gameplay exists.
The problem is, if we allow ourselves to be tempted to err toward the side of suspicion, to blame negative outcomes on the belief in rampant cheaters, hackers, etc., then we are aligning ourselves to the same narrative that bad faith actors like cheat sellers and RMT vendors want to push. We allow ourselves to be corrupted with the idea of "this game is bullshit, everyone else in the game is not playing fairly, why do I even bother trying?"
This is a dangerous mindset because it fuels a toxic narrative that "this game is never going to be fair to me, the devs don't care, the game is becoming less and less fun for me, I should just quit if I'm not going to cheat myself."
Let me be clear, I'm not saying that toxicity itself will convert an entire playerbase into cheaters. In fact, I think it has a minimal impact at a high level perspective because there just aren't that many people that are willing to traverse to the disreputable ends of the internet and take risks just to gain some internet points. However, even a 1% cheating rate to 3% cheating rate is a 300% proportional magnitude in the profitability of selling cheats or RMT vending.
And more importantly, it significantly damages the enjoyment and integrity of the community at large.
You can see clear evidence of bad faith actors in this subreddit. There have been several threads in this subreddit just in the past few days that have reached the front page claiming 1) false bans are rampant, Nikita should just let RMT be 2) hello I am bob, I am hacker all day, you should hack too because literally it's everywhere you don't even KNOW, btw PM me for cheap hacks 3) xyz devs are ruining the game, why stop RMT/hacks, just let it go, you're DESTROYING THE GAME, STOP DOING THAT BSG!.
I'm not going to say any individual thread (even though many examples have been debunked) are complete bullshit. I'm just going to say that the narrative of these threads is completely aligned with individuals who are lobbying to protect their interests in making a profit out of bad faith play.
What can you do to stop this? It starts with the self.
Encourage productive discussions, positive mentalities, and discourage DESTRUCTIVE SPECULATION and toxic attitudes.
- When you get an incredibly lucky clutch/kill, remember it for yourself, and use it as a reminder as to how fickle this game can be. Think about how your opponent must be so confused/suspicious about what you got away with.
- When you yourself are on the receiving end of that ridiculous death, remind yourself of all the times where you were on the other side. Make your default reaction be "damn, Tarkov is crazy" rather than "I bet that was hacking 100%." Remember how easily flukes can occur, and how easily luck could be conflated with cheating.
- Focus on learning and improving in a game where there is endless room to get better, something that is irrelevant to whether some minority of players chooses to play unfairly.
BSG has shown an exemplary degree of interaction with this community. Always wait for an official response before jumping to conclusions.
- Upvote threads that discuss legitimate aspects of the game, whether it's discussions on strategies, advice on how to get better, or general productive discussions that are within our control as regular players.
- Downvote threads that revolve around discussing cheating, hacking, or a bullshit "Reddit expert panel" of trying to speculate whether gameplay footage was legitimate or not, especially when there is a lack of context on user lag/latency, frames, system specs, server issues, date stamps, etc.
- Upvote threads that explain technical nuances known to impact Tarkov gameplay, e.g. desync bullets resulting in apparently unkillable players, etc.
- Downvote threads that attempt to sow paranoia in masses of players that have nothing to do with anti-cheating efforts. At best, they are attention-seeking threads made by users to profit infamy at the cost of community integrity. At worst, they are propagandized pieces designed to undermine faith in the developers and increase the temptation to use black market cheats/services and perpetuate a death spiral.
- Downvote threads that attempt to induct mass outrage against developers. When someone says "they nerfed X, this is bullshit, we should all just RMT now," it could be from legitimate upset players, but keep in mind that it's also perfectly aligned with exactly the type of agenda that bad faith actors have. Remember that the best thing that malicious actors can do is to pit the player base against the developers so they can create a lawless wasteland to do business undisturbed.
- Go try making a thread about cheating/hacking/boosting in Overwatch or Apex Legends and see how much official response you ever get from developers. This subreddit has been gifted with probably one of the best levels of community engagement from devs you could ask for.
- When someone tries to hit the front page with a thread like "I've been falsely banned," track that thread carefully and wait 3-4 days for the official response. If it's anything like 90% of the threads we've seen in the past few days, you're going to see the truth hammer get dropped, providing the poster doesn't delete their own threads/accounts when they're exposed to be full of lies.
- Upvote threads that make grandiose claims that are worthwhile for an official response. Then mercilessly scrutinize how events unfold, because 99% of the time, it's always liars that are hoping they can incite a riot as "punishment" for the developers interfering with them than anything else. This is a common occurrence in other communities that have high developer interaction like Old School Runescape, where banned players are known to make top-page threads about being falsely banned, before evidence is provided showing that they are completely full of shit and memes ensue when the truth hammer is dropped.
BSG spends 65% of its resources fighting cheaters and RMT and is a developer that has shown endless passion and commitment to its install base. As beta players that are trying to help them develop the best possible game, the best voice we have against bad faith actors in the Tarkov community is deafening silence. Starve them of attention, free marketing, free publicity. Demonstrate that just because they can infect one player, that will not tilt the hundreds of legitimate players into letting themselves surrender and be infected themselves.
NFL & NBA Updated Schedules and Degenerate Gambler DD
submitted by jk_cd9 to wallstreetbets [link] [comments]
Edit: I'm a POS forgot about MLB. Season starts July 23. Added link and info in schedule below.
Was posting this in the "what your moves tomorrow" thread but I got carried away. So figure post my Bullshit here.
The moves I am planning to make and the conjecture I am erroneously calling DD are detailed below.
All focused around the sport book services, online casinos etc for next couple days and weeks.
DKNG - GAN - BETZ - IGT - MGM - SGMS - PDYPY etc etc
Dates for NFL / NBA / MLB season opening and schedule info below
Like every dumbass who thinks they sound insightful loves to say, "Americans are starved for entertainment and sports."
Another obvious thing everyone here knows based on the fanatical participation in this glory hole of a sub:
Americans are going through gambling addiction withdrawal.
They need to get right.
Well the fix they need is practically here.
Tomorrow July 8:
All NBA teams will be checked into their Mickey and Minnie hotels and prowling the on-site facilities (aka the Orlando Covid Bubble) acting like the responsible gentleman that they are. I wonder if ladies of the night are on their way there now, or if they are already there incognito in Donald and Goofy costumes.
This means no more uncertainty. American sports will be back on the media radar.
News spots, YouTube assholes, woke social media posts, all will have NBA content.
DKNG and other gambling and fantasy platforms are going to start advertising hard.
DKNG promos will be on every PJ trader's/boomer's favorite cable news shows.
Daily fantasy targeted ads will be on your Reddit feed and on your wife's boyfriend's Instagram.
This will be the first time since their IPO in April that they will be pumping ads for biz so hard.
You know who else is gonna talk about the NBA, MLB, and NFL starting???
Everyone on CNBC - Jim Cramer morning and afternoon - Faber - LeBeau - Kernen - Kernen's co host babe - The young dork who pisses Kernen off every morning
They will be falling all over themselves to show us that they are cool sport guys.
And that they know about cool sport guy gambling companies.
These tickers are gonna get alot of free stonk news airtime.
1.5 Weeks from now
NBA scrimmages start NBA beer virus scrimmage schedule
Major ad buys for NBA fantasy and betting will start the week before the scrimmages and run through until the season starts.
July 23: MLB regular season starts MLB beer virus season schedule
2.5 weeks from now
NBA Season Starts NBA beer virus schedule
This leads right to the main event for all degenerate gamblers and fantasy players
🏈🏈🏈🏈🏈 NFL SEASON 🏈🏈🏈🏈🏈
3.5 weeks from now
NFL 53 man roster cut date
The NFL preseason is cancelled
That is actually good for fantasy football, don't have to worry about injuries as much so can draft as early as you want.
So fantasy will be going full force, and DKNG will keep hitting us with the ads.
Three weeks of drafts and talking heads pumping NFL.
7.5 weeks from now
First NFL game
Im going all in tomorrow, Thursday and Friday.
I cashed out all my calls and positions mid morning today. I am going to try my best to not drop all $ in one session.
Big picture - my moves:
GAN, IGT, MGM, SGMS, PDYPY
Tomorrow through early next week will pickup an irresponsible amount of Calls exp 8/21 and 11/20
Gay Stock purchases:
I am going to buy a Honda Civics worth of DKNG stock over next two - three days
Why not calls? Well I am not sure when it's going to leap and volatility is high.
DKNG was at $43.75 on June 22.
Down 30% since then.
Its going to blow by $50 and to $70 and maybe more by the time we are at the start of the week 2 of the NFL season (September 17).
I will periodically throw money at BETZ tomorrow through the end of July.
Will use it to stop myself from impulse buying something stupid like HTZ or NKLA calls or TSLA puts.
I dunno why but the BETZ ticker just seems kinda gay to me.
Note: To clarify the above. I am a tard. Smart for a tard, but still a tard.
DKNG - Fundamental DD Inside - DKNG
submitted by IAMB4TMAN to wallstreetbets [link] [comments]
This is an example of fundamental DD that takes place at ‘smart’ money institutions based on my professional experience in IBD, Private Equity & most recently at a HF (mods can message me for proof). Not thoroughly fleshed out b/c you autists have limited attention spans, but a summary. Figured I’d take the time to give back to this community that has provided many lolz, & should be a good measuring stick when evaluating other forms of fundamental DD posted here.
- DraftKings, Inc.: vertically integrated US mobile betting operator that also provides retail sports betting & back-end betting solutions through SBTech. Think of SBTech as the tech ‘market-maker’ for traditional sports betting, they do all the funny math to set the betting odds & seem to be working on back-end solutions for DKNG Casino The Big Picture
- Total annual US Gambling Revenue: ~$90Bn 
- Casinos: ~$75Bn
- Illegal Sports Betting: ~$13Bn
- Horse Racing: ~$0.8Bn
- Daily Fantasy Sports: ~$0.4Bn
Only ~2% of the ~$90Bn gambling revenues were placed online which is the lowest in the world where betting online is legal. For example, in other countries online gaming activity represents ~6% - ~52% of total gambling revenues, with ~12% being the average.
Wall Street expects online gaming revenue to be $20Bn-$40Bn within the next 10 years. For this to be achieved, the online gambling market will have to achieve a ~30% penetration rate on total country gaming revenues. There is an expectation that this is could be easily achievable given penetration trends overseas - see page 11 of this: https://s1.rationalcdn.com/vendors/stars-group/documents/presentations/TSG-Investor-Day_March-27-2019.pdf
Other catalysts include increasing adaptation of sports betting in more states. States that have both legal sports betting + online sports betting permitted: NV, NJ, WV, PA, IA. Sports betting permitted but no online: DE, MS, RI, MO, AR. Prior to COVID there was ongoing discussions across many States, especially ones with growing deficits to explore how permitting sports betting could create a fresh avenue of tax dollars. Post COVID there is an expectation that these discussions will be given extra focus as many States will be hungry for incremental tax dollars. Important to note that currently 43/50 States allow DFS, but given the small share DFS has on total Gaming Revenues, it increasingly looks like DKNG is banking on traditional sports betting for a variety of reasons, more later.
There are entire articles on Google arguing this catalyst so I’ll end this here. Digging Deeper
DKNG’s main offerings are Daily Fantasy Sports (“DFS”) products & traditional sports book products to its clients. Long story short, a metric to look for in my opinion (that is curiously not reported by management or remarked on) is the hold % in traditional gaming sector parlance or the ‘rake’ & compare it to the ‘traditional’ gaming products like sports betting & Blackjack.
For DFS: DKNG takes ~15% of the prize pool (note: used to be ~6-11% ). Curiously, their main competitor FanDuel also has moved up to a ~15% rake recently. Google searches show the smaller competitors have a rake in the ~13% range.
This ‘rake’ has grown ~2x in 6 years, but it has been a delicate move on behalf of management. Why? B/c the more ‘sophisticated’ DFS players (equal to autistic day traders on Robinhood) have noted this increase & based on some Googling, some have moved down market to the smaller players. As a side note, many live casino games have their rules altered to grow the Hold %. For example, Blackjack games with 6:5 payouts on 21 have materially higher Hold % than the traditional BJ rules that pay out 3:2. Given the findings so far, DKNG may not have much room to materially increase its hold % in DFS games in the near-term from current of 15%. More on this later.
Now why the fuck is this important? This is important b/c the typical sports book (ex-Parlays) have a ~5% hold %/rake. Parlays have up to a ~30% hold (which is why it’s commonly known as the sucker’s bet), & just for reference, the average Blackjack table clocks in 14.5%. What this means: Every dollar put into these games, the “House” or DKNG, will take 15% of your money for DFS games, for sports bets they will be pocketing ~5%, up to ~30% if you’re into parlays, & we’ll just use the standard 14.5% BJ hold for the DraftKings Casino platform.
So why the acquisition of SBTech & a foray into the traditional sports gambling market? As you can see previously, the illegal sports betting market is >30x
the size of the current daily fantasy sports market. So it’s clear that the DFS providers including DKNG are foraying into the space to capture this user base & hopefully convert them into games that have a higher hold %, such as DFS/DKNG Casino.
As of May 2020, DKNG has achieved a 30% penetration rate on its ~4mm ‘monetized’ DFS clientele to its Online Sports Book (OSB), from the OSB+DFS clientele, DKNG has converted 50% into its DraftKings Casino platform.
Including non-monetized users, user base totals at 12mm. Based on these unit economics: every 1mm of additional users -> 333k monetized users for DFS -> 100k users for OSB -> 50k users for DraftKings Casino. Some Numbers – Italicized/Bolded the important
Numbers that represent Risks to Long Thesis
- In total, DKNG has DFS paying clientele of ~4mm, the metric management focuses on is “Monthly Unique Payers (MUP)” which spans across DFS & online sports betting***. As of Q1’20 they reported 720,000*** MUPs, representing +16% YoY growth 
- Average revenue per monthly user (ARPU) of ~$41, +11% YoY
- Based on previous observation of Hold %, looks like ARPU growth will be limited
- Since ’17, MUP has grown at a ~11% CAGR & ARPU has grown at a ~19% CAGR
- As a side note: the ~4mm monetized user base was acquired at ~$122/user over 3 years. Total users cost them $41/user over the last 3 years .
- They are currently EBITDA negative & Wall St expects them to be positive by 2023
- I took a dive into the math driving this, here is a summary:
- Based on their current cost structure they will need to have ~1.7mm MUPs at an ARPU of ~$46 to break-even. This implies total monetized users of ~10mm from ~4mm currently
Things to look for when going Long
- DKNG’s user base of ~12mm is on the low end of the sector vs. its ‘brick & mortar’ competitor's user bases (online betting platforms with physical casino presence)
- CZR with 55mm, MGM with 33mm, ERI with 10mm (in pending merger with CZR, could have a lot of overlap), FanDuel with 8.5mm
- Is there a concern for increased marketing costs to increase user base? Let’s look at a case study of NJ, the first state to open both mobile & retail sports betting:
- FanDuel + DraftKings have held 80%+ of the OSB market share since 12/2018 which is estimated to be driven by the conversion opportunity from DFS that is unique to both companies 
- On the flipside, a case study to examine going forward is how DKNG can get OSB customers in a State that does not allow DFS. Nevada. Home to Las fucking Vegas. Prior to NV pushing FanDuel/DKNG out (highly likely due to casino lobbying), NV was a top-15 State in terms of revenue for them. NV is home to the fattest sports book in the US, & recently the gaming commission started to parse the data on sportsbook wagers done online vs. in-person, & it came out to roughly 50/50. It will be interesting to see how they try to capture market share in a state with no DFS
- Long-term EBITDA margin target of 35% requires huge growth in MUPs
- Based on their estimated '22 cost structure: Holding ARPU of ~$46, MUPs will have to be ~5.2mm, a 7x increase from current to achieve a EBITDA margin of 35%
- A focus on future earnings will be management's ability to shift to a more fixed-cost structure which would effectively lower the MUP requirement for profitability
- Progress of additional States legalizing sports betting – specifically, States with DFS already legalized
- Cost structure evolving to a more fixed mix vs. the mostly variable mix currently as this will be the forward figure that determines profitability
- Increasing User Base (Curr.: 12mm) -> Monetized Base (Curr.: 4mm) -> MUP (1Q’20: 0.7mm)
Share Price Target
- Management seems to be focused more on the first step, but one thing to note is that the 33% monetization rate is very high when compared to something like League of Legends which isn’t entirely comparable but in 2013 had a ~4% monetization rate . This, combined with the below implies that this conversion rate may be the ceiling for now
- As a side note, ~6 years ago FanDuel had ~300k monetized on an ~800k user base for a monetization rate of ~37% 
Given the cost structure of the company, I’m going to base the price targets around Enterprise Value / Revenues (driven by MUPs & ARPUs).
Bear Case MUP: 5mm -> $20.32 - $45.73 Base Case MUP: 5.5mm -> $22.27 - $50.10 Bull Case MUP: 6mm -> $24.21 - $54.47
- MUP sensitivity of 5mm - 6mm
- ARPU sensitivity from $41 - $47 for an average of $44, just a $3 increase from current of $41.
- Share Price targets based on 2.0x - 4.5x EV / Sales.
- Note: Flutter Entertainment (FanDuel ParentCo) trades at ~3.6x EV/Sales
These MUPs imply a monetized customer base of 28mm – 33mm. At the high-end, this implies that DKNG monetized customer base will equal MGM’s current total user base.
At yesterday’s close of $43.70, DKNG is trading at 3.5x – 4.5x forward Revenues on an expected >5,000 MUPs.
Share Price drivers / considerations:
- Continued multiple expansion
- Consideration: A 1x premium to FanDuel's 3.6x, implies a ~15% upside to current. They're bigger than FanDuel, do they deserve the premium?
- MUP Growth exceeding beyond targets
- Consideration: Stock currently implies that they should on average be growing at 40% QoQ – during 2018 they had on average +30% growth QoQ in MUPs, marking their best year
Jason Robins, 39 – Co-Founder & CEO. Duke BA, started DraftKings from day 1 in 2011. The 2 other buddies he started the Company with are still at DKNG. Dude navigated the Company through the scandal that rocked them in ’15 & ’16, and was the trailblazer in getting DFS labeled as a non-gambling product that enabled it to open in States without a gaming designation. This shit is the stuff that gets people in history books. His accomplishments make him seem like a very competent guy. Has 3 kids now, and only ~3% economic ownership in DKNG but has 90% of the voting power through his Class B share ownership. Also he actively participates in venture investments, sitting on 10 boards.
His comp plan performance bonus target is pretty murky, but main drivers are EPS growth, revenue growth, then a bunch of margin & return metrics, along with share price returns. Overall, very open-ended & it’s safe to say as long as shit doesn’t hit the fan, he will be eligible for his max payouts year over year. I’m assuming the lawyers tried to encompass everything possible for maximum flexibility to justify him earning his max comp as long as DKNG is still around.
Since he’s got voting control of 90%, I’ll end the specific-person overview here, but want to note that they have a very bloated C-suite. 12 folks at DKNG, 8 folks at SBTech, all with C-suite designations. Whereas their main competitor FanDuel, has 3 guys with a C-suite designations & 1 EVP, but is a sub under a larger ParentCo that has its own management team of ~5 guys.
Looking through glassdoor you can see the biggest complaint among employees giving bad reviews is based on management, all of the specific issues they point out IMO are a result of a top-heavy company. Seems like a good starting point to optimize their cost structure, but given Robins' history of sticking this entire thing through with his co-founders since '11 stuff like this doesn't seem to be a part of his playbook. They’re a public company now though, so it’s going to be interesting to see going forward.
If I were to initiate a position in DKNG, the stock would have to fall to the $35-$37 range for me to be a buyer of the stock, and based on this rough intro analysis I'll be considering Put options if it breaches $50. I would not touch Calls at this level.
 Susquehanna Research – U.S. Online Gambling 6/27/19
 Goldman Sachs Research – DKNG Initiation 5/19/20
My Introduction to a Professional Sports Betting Syndicate
submitted by bettingnetwork to sportsbetting [link] [comments]
This is part 1 of a 3 part story I recently shared within The Betting Network community. The Betting Network or TBN is a group of sports bettors that all share information with a common goal of winning more bets. I also do weekly lessons, a mentorship program, game previews and just pass along any and all information I’ve gathered over the past 15 plus years, the main goal is to help members improve their overall sports betting IQ and help them avoid the brutal trial and error I had to go through before becoming successful in the sports betting industry.
I decided to share this story because of the feedback I received within The Betting Network, hope you guys enjoy it and also gain something from it.
Before I get into the good stuff I have to explain what my job entailed at the time. The company I use to work for scraped sports betting information and data off the internet. A lot of pro bettors use “data scrapes” and what it does is it searches the internet 24/7 every second of the day for anything that has the keywords you programmed into the software. Think about how much time and effort this saves. You input “LeBron James Injury” and the second anything related to that is posted anywhere online it will be sent to you and even compiled in an organized fashion. You could put Steph Curry 3pt attempts and it will gather all that info and compile it. Data scrapes are really the only way a person could compile stats and information on entire leagues, it would take the entire season alone if you attempted to input it yourself without a scraper.
One of the most important data scrapers is for injuries and the company I worked for had it set up where it would be constantly searching the internet for injury related news and it would “ping” our computers already formatted so it could be sent out to members and social media. For example, this is what a “ping” would look like - CLE-F [LeBron James] - Calf- Questionable or GSW-G [Steph Curry] - wrist - Doubtful. Our job was to edit any errors and basically just click a button that was linked to send it out on all platforms, members text services, on twitter, everywhere we wanted. Our company's injury scrape was so good that live odds services like Don Best would simply have a scrape on our Twitter account. Pro bettors would just have notifications set for our tweets because we were breaking injury information 10 to 20 seconds before ESPN sometimes. By the way, 10 to 20 seconds is an eternity in the sports betting world. If you couldn’t tell already I’m no computer wiz, but what I believe separated our scrape from many others was how the information was formatted when we got it and how it was streamlined with all the platforms it needed to be sent out to after we got it. In other words, injury news breaks, we get the ping, hit one button and it’s sent. Other people may receive the injury information and have to type out the format and then send it out one by one to twitter or on their website. But like I said I have no fucking clue how it all works all I know is we were considered one of the best for NBA, NFL.
If you want to learn more about how to actually set up a scraper I provided a good intro to scraping link here: ⬇️⬇️⬇️⬇️ http://crowdsourcesyndicate.info/MommyWowMyFirstScraper.html
The MIT Sloan conference is one of the biggest sports analytics conferences in the world. Myself and a few co-workers were sent to the Sloan conference to represent our company. It’s a big 2 day event and everybody from the sports world is there, anyone from sports book operators to NBA head coaches and players. Link below for this years speakers at Sloan ↙️↙️↙️ http://www.sloansportsconference.com/2020-conference/2020-speakers/
Anyone that’s heavily involved in the sports betting industry is usually there because it’s a great way to network with everyone all in one place. My company had a booth there and we would just answer questions, hand out promotional fliers and point out all the famous people we saw. This is where it gets good. While sitting at the booth a guy approaches me and asks: “What do you do”? Me: I’m a data analyst Guy: ok, but what do you do?
I explained to him my job responsibilities adding in a bunch of stuff to make it sound more important because the truth was I sat at a computer for 8hrs a day waiting for pings and answering phone calls where 90% of the callers had the wrong number. He pretended to be interested in the job details and before I could get into what he did or why he was there the convo ended with him asking if I’ll be attending day 2 of the conference. I said yes and he told me he would also be back tomorrow for day 2 and that after the conference tomorrow him and a bunch of guys were going to meet for drinks at the Westin hotel across the street from the conference, “drinks on me” he said while walking away.
The next day after the conference I went across the street to the Westin and they have a restaurant. I see “George” who I met the day before and invited me, he’s sitting at one end of a table that has 2 big tables pushed together making one big table. He waves me over and I sit next to him, there’s about 7 other people there. He tells me to order anything I want, drinks, food whatever and made a point to tell me and everyone there that he’s covering the bill. The Westin is really nice and expensive, not a place I would be going to eat and drink on my own considering I think I was making $16 an hour at this time. I couldn’t help but wonder why he invited me and only me when I had 2 other co-workers. After a couple hours and 4 vodka tonics I found out.
“George” was a professional bettor and was (still is) the head of a nationwide sports betting syndicate. He knew exactly what the company I work for dos and even knew my boss. Once we got into talking about what he does he wasted no time telling me what he wanted to do. He wanted me to notify him and his team about injuries before sending it out to the public, 15 seconds after to be exact. He knew that a majority of sports books used the live odds screen Don Best and that Don Best used our company for breaking injury news and if he was able to get the injury news before Don Best he would be able to beat the line on all the books that copied lines from them.
For example: Your bookie isn’t sitting in front of the computer moving the lines when an injury happens, it’s done automatically. Most local books set up what’s called an auto-mover and this copies the feed from another sports book. Some local books may copy the feed from say pinnacle or 5dimes or any book they feel has strong accurate lines. They can’t set up a direct feed to pinnacle or 5Dimes because established books such as those can detect software. So what they do is set the auto-mover up onto a live odds service like Don Best. Once the line moves on don best all the books that are copying lines will then move their lines.
George had software of his own that allowed him to bet games on thousands of accounts with a few clicks of a button. He explained to me how this would all work - I get the ping - CLE-F [LeBron James] - Rest - Out, I would copy and paste that onto the telegram messenger app and press send, he said sing happy birthday and when finished then I could post it to the world like I normally would. With his automated bet software he could pick off all the books that didn’t move the line yet based on Lebron being OUT. Of course not every single book was reliant on Don Best to move lines, many of the bigger well known offshore books had their own data scrapes and injury software, but more than enough books did rely on Don Best, who relied on my company. So the potential for this was through the roof.
I had some serious thinking to do, as much as I wanted to say yes on the spot my instincts held me back. I told him I had to weigh the pros and cons. After all I basically would be tanking my job duties and going from a committed employee to what seemed like a sneaky spy. It does our company and it’s members no good if I’m sending out information late or at the same time as every other company. Also, without getting too detailed regarding the financial arrangement I felt I needed to counter his offer. The biggest upside for me besides the money was my strong desire to get involved with a real sports betting syndicate but the negotiations quickly let me know that there is a dark side to the industry and I had one foot in.
To Be Continued....
PS I’ll likely share part 2 and 3 in the coming days.
I'm finalizing my portfolio for this year.
submitted by CapitalC5 to stocks [link] [comments]
It's been a while since I made a big post. Lots of people are still messaging me about the energy sector post, especially for the ENPH tip, so I'm here to show my portfolio. I don't own all companies yet, this is partially hypothetical. I'm holding on to a reasonable cash position for a possible new downturn, but I have starting positions in most companies and will DCA.
I will try to keep it summarized, as I have done quite a lot of analysis on each of them. I'll draw the main picture and give the most important arguments for my choices, but I'm not expanding too much. If you're interested, you can DM me to talk about them more.
Let me start by saying I'm a growth investor. I always look for a combination of growth with a great track record, if possible at a reasonable price. There are exceptions as you will see below, but the main balance stays the same. I'm not a defensive investor, but no aggressive one either. My timeline is 2-5 years at least (due to a possible start of a small business), but I would gladly hold on to these companies 10+ years.
TLDR; For you guys not interested in my portfolio, I've added a short list of interesting smaller cap companies at the end, most of them trading at decent values.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- ADVANCED MICRO DEVICES - $AMD
This one is becoming a blue chip, but has more than enough growth potential to live up to those high valuations. Preferred by gamers and beating their biggest competitor in the CPU market hard. While AMD and INTC were close competitors at the beginning of the 21st century, INTC took the lead by a lot. Since 2017, they introduced 7nm CPU's and GPU's and they are closing the gap fast. Not only are their chips more performant, they are also cheaper. Market cap $60B vs $261b.
Those next generation chips lead them to new partnerships, often beating INTC. Microsoft, a long time Intel customer, began using AMD chips in their Surface laptops. Lenovo using AMD for their new servers. Nvidia started using the chips in their AI products. AMD is also used by Apple's high-end laptops, while Intel (used in the budget range) will probably get replaced by Apple chips made in-house. Apart from laptops, AMD has government contracts to deliver supercomputers in 2021/2023 and they are used in both PS and XBOX consoles, to give a few examples.
For the CPU market, AMD is destined to take over, but they're also taking on NVDA for their GPU's. They have been catching up for years and in 2019 they finally made a better performing GPU in the $350-400 price range. There is a possibility to gain GPU market cap since NVDA has been pushing their prices due to the lack of competition. Therefore, with AMD stepping up their game, they need to give up market share or lower their margins. Financial
Assets over liabilities are x1.88. Cash to debt ratio well above industry average, debt to EBITDA well below IA. ROE 17.12% and ROIC 28.06%. Earnings were growing fast before Covid (125% in Q3, 78% in Q4). Yes they're overvalued, but with their future outlook, I would always buy below $49. Doubts
Now that they are done catching up, the question is, will they outperform in the future. To gain more market share of Nvidia, they need to be better, not equally good. AMD also needs to control the heating better, as it is one of their long term problems.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- MASTERCARD - $MA
Fintech companies like SQ and PYPL are a great investment. However, a lot of big companies will (and already did) implement online financial services. MA is able to easily work with multiple of those companies and they're using their global presence pretty well, that's why they're my pick for the fintech industry.
They launched Mastercard Accelerate last year, implementing those online paying platforms and letting start-ups take advantage of their global presence to grow and transform very fast. Last year they acquired Ethoca (managing e-commerce fraud) and Vyze (platform to connect merchants with multiple renders, giving them the opportunity to get those financial needs for start-ups). MA is basically helping start-ups to grow faster, which will result in more financial transactions in the future.
Last but not least, they like to focus on expanding to countries where there isn't much competition yet. They are expanding their exposure to Middle East and Africa, working with local networks and e-commerce platforms. They are in a strong position to capitalize those regions in the future and take on market leader Visa even more.
They get compared a lot to Visa, so I'll expand on that subject a bit as well. While V is focussing on performance and speed, MA plays the cyber security card. They are already working on ways to implement cryptocurrency and Mastercard tend to have more growth potential vs stability from market leader Visa. While V is in the lead, MA is more widely used by fintech companies, which shows potential take-over in the future. Next to their credit services, they also own debit service Maestro, which is widely used in Europe. Financial
Returns as high as 150% (ROE) and 60% (ROIC). Very large margins and perfectly stable balance sheet. High EPS growth YoY, 53% and 42% in the last two years. Quick ratio 1.87. V has more assets and even bigger margins, however MA wins in returns and cash. In terms of more growth, I like to focus on those last numbers more. Doubts
It's a blue chip at a $300B market cap. Their growth potential might be limited, although I see them as one of the better picks between blue chips.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- ENPHASE ENERGY - $ENPH
I already talked about solar energy in another post, so I'm gonna skip the explanation. As some of you know my choices were ENPH and SEDG, so I'll explain a bit about why I choose ENPH here. Mainly it's because of their financials, so I'll dive that straight away.
Quick ratio - 2.35 vs 1.74
ROE - 142.94% vs 21.51%
ROIC - 85.51% vs 25.81%
Net margin - 25.81% vs 10.28%
However I think SEDG balance sheet is a lot better and safer, ENPH is working on their future more efficient. They are paving the way smoothly with bigger margins and return on investments. Although SEDG might be the better pick right now, ENPH will be the better one in a short while. ENPH is also a bit less overvalued and their PEG ratio is lower, which makes them the better pick to get in right now.
Diving into the products as well, ENPH just has the better and more efficient product. Their micro inverters are more durable (20 vs 12 years) and give the chance to increase or decrease the amount of solar panels easily, depending on your personal situation.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- GALAPAGOS - $GLPG
I'm not a big fan of biotech companies, but these guys have my attention. Not because they're working on Covid vaccines, but because of two reasons. First one is them getting back-up from Gilead Sciences. That's the push they needed to start operating worldwide, increasing their potential market cap. Now that they have the cash from GILD, they can keep on buying interesting divisions and increase their growth. While having almost no long term debt, they are set pretty well with about $4 billion extra in cash.
Second, they have multiple medicines in later trial phases, with Filgotinib as their biggest one. They had a setback on those results, but the company is very confident, giving an opportunity to get them at a decent price. I wouldn't be surprised if they partner up with another big pharmaceutical company in the metabolic disease section. Financial
High PE (84 vs 44 average), but PEG ratio is 1.2. Quick ratio 9.28. ROIC 75.91% and ROE 7%. Became profitable this year with 16.25% net margin. 38.7% YoY EPS growth. Doubts
Like all biotech players, there's a lot depending on medicines getting through phase trials and being commercialized. If Filgotinib will fail, their stock will obviously fall. However since they are backed by a big US giant, they can commercialize the product faster and on a bigger global scale if trials succeed. That's what gives them the advantage in comparison to other biotech companies for me.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- WALT DISNEY - $DIS
This one has got me doubting a lot. I've taken them off and put them back on my list multiple times, but eventually I decided to keep them at least 2 years to see how they will evolve into streaming.
Biggest advantage they have on their competitors is they basically have a monopoly on kids entertainment. Kids are growing up with electronic devices and content, so they're creating customers at a very young age. That's how Coca Cola used to work. They targeted 14-16 year olds, dumping loads of money into advertising which resulted in life long customers, as people didn't change cola brands often.
Disney+ is a big hit and they won't get so much competition from other streaming services as Netflix and Roku will. They have one of the strongest defined brands out there and they know perfectly how to build and maintain their company. It's also still unclear how sports with public will evolve, but it's certain streaming will become even bigger after Covid. Therefore their money-losing ESPN acquisition could even turn into a moneymaker. Financial
I can't really say great things about their financials. ROE is 12.67%, above 10% is decent. Assets over liabilities are x1.85 and debt to equity is 0.61. You could apply the saying "too big to fail' here, but that's about it. The bad financials are mainly caused by their big investment to streaming of course and they're working on it hard. They doubled their cash position, increasing their quick ratio from 0.75 to 0.89. Doubts
I would say financials are their weak point here. They still have to go through some bad weather this and next year I would say. Them doubling their cash position in Q1 was soothing, as I see it being the biggest issue for the future. It might be better to wait it out and keep an eye on them for next year, but I wanted to take a position already. Not higher than 8% of my portfolio though.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- MICROSOFT - $MSFT
They don't really an introduction I guess. 2nd biggest player for cloud services with Azure. Naming Satya Nadella as CEO and making the transition from hardware to software in 2014 were the best decisions they could've made. Acquired the government contract with Pentagon, however there's still uncertainty about it. In short, Amazon is claiming they were about to win the contract, but Trump criticizing the company would've lead to calling off the deal. For me, that's probably the main reason why MSFT didn't fly as high as their fellow cloud competitors yet. Financial
Assets over liabilities x1.67. ROE and ROIC respectively at 43.82% and 28.88%. Quick ratio of 2.88, 0.65 debt to equity and 1.86 cash to debt. Decent financials, great returns. Talking about blue chips, I would say MSFT is still fairly valued with a PEG ratio just below industry average. Also paying a small dividend. Doubts
The Pentagon contract allegations could be pretty negative for the company. They will probably not come back on their decision, cause if they do, MSFT will claim they already made big investments towards them and things will just keep on dragging on. Even without the contract, MSFT should be a 10 year hold while buying on dips.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- INNOVATIVE INDUSTRIAL PROPERTIES - $IIPR
Haven't read a lot about them here on Reddit, but they're a very decent investment. Basically, they buy properties from cannabis companies and leases them back to the sellers, giving them the cash they need to grow faster and IIPR keeps the long term advantage of renting out those properties. They need to buy about 6-8 properties a year to keep their growth rate going and they already bought 7 this year. They still have a lot of cash ready to take advantage of the crisis.
Not only are they 20% undervalued right now, they have a lot more growth potential after that and on top of it, they pay close to 5% dividend. I'm not a big fan of betting on the best cannabis company for the future, but IIPR is a great buy to have exposure in that industry. It doesn't happen very often I come across a company that combines growth potential with a high dividend, but IIPR does. Financial
Quick ratio 6.75, cash to debt 2.8 (while REITs have an 0.07 average). Net margins 13% above average. Assets over liabilities x4.88. Annual EPS growing by more than 150% and about 41% in the last quarter before Covid. They just missed Q1 estimates, but it was only an 8% drop from Q4, performing way better than other REITs. Doubts
IIPR has held a lot of new investment rounds, diluting shares. Of course extra capital will result in higher growth and will eventually be positive in the long run. There has been a drop in these last few days due to the announcement of selling 1 million more shares soon. I would look at it as an opportunity to get an even better price on them.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- TELADOC HEALTH - $TDOC
It's the only company I don't own yet. I can't force myself to invest more than $140 per share for them, although I really like their business model. A lot of people are skipping doctors visits these days, going straight away to get medicines and counting on the advice of pharmacists. A lot of times, there's more examination needed.
Not only do I see them succeeding in their field, I see them as an essential part of the automation of the pharmacy industry. It's a useful tool in emergencies, giving advice and deciding how serious the condition is, if (fast) medical care is needed. Teladoc will also play a role in insurance and giving the employers a checking tool. 98.9% of their shares are owned by institutions. Financial
In terms of profitability and returns, not great of course. They are estimated to get profitable in 2023. Great balance sheet, assets over liabilities x2.66. Quick ratio 6.14, cash to debt 1.06, debt to equity 0.48. Doubts
It's hard to see if a company is well managed before they are profitable. Their moat isn't very narrow, however I feel being one of the first ones gives you a big advantage in this field.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- DRAFTKINGS - $DKNG
Gonna keep this one pretty short, there has been enough posts about Donkey Kong. For me, the most important factor for choosing them in this industry is their fantasy sports section. They are widely popular and that division will only get more interesting while online gambling, and especially in-game betting, gets more and more legalized in the US.
Although they realized major revenue growth in 2019, they almost doubled their earnings loss. Main reason of course having to develop their platform and system. Good thing is, their technology is highly scalable, meaning they margin will grow massively while expanding in to more states and countries. Not many ratios available yet, so that's about the only financial information I own atm.
The only negative I see is their pretty wide moat, so this one should be monitored more closely in the future. But for now, they have the momentum and are one of the most popular choices, great investment.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- RAYTHEON TECHNOLOGIES - $RTX
As many of you know, two great companies (UTC and RTN) merged together in April. While United focussed on aircraft engines (Pratt & Whitney), Raytheon manufactured weapons, military and commercial electronics. They always delivered advanced technologies and them gaining multiple government contracts in the last decade is confirmation of their performant products.
Raytheon will continue to grow their leadership in different segments. Because of their diversity, they seem perfectly in place to grow even more into an aerospace & defense giant. Engines, aerostructures, avionics, sensors, cybersecurity and other software solutions are just a few examples of their working fields. Financial
With a PE ratio of 13.58 and PB ratio of 1.41, this is probably the most undervalued stock in my portfolio. Assets over liabilities x1.43. The rest of their financials isn't that great. UTC was carrying a lot of debt, but because of the merger, it will be better balanced as RTN was only carrying $2 billion net debt. If they can decrease their debt and optimize their merger, they are set to be the new number one in defense. Doubts
It's still unclear how the merger will work out financially and logistically. In theory, they should be very well armed (pun intended) to take on LMT as market leader. Their exposure to commercial aircrafts is also a big threat, but it's less of an issue because they can make up with their other practices.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
As you can see, I've tried to get the best blue chips with still some growth potential and stable growth companies together. Since a lot of companies already got mentioned on this forum, I'll include a bonus round of interesting companies I came across during my search for the best companies. I didn't include them in my portfolio mainly because I feel the chance of them succeeding and living up to their future potential is more risky than others. For you looking for higher risk, higher reward, check out these companies below.
- $INMD. They offer minimally-invasive aesthetic medical products for various procedures, such as liposuction with simultaneous skin tightening, body and face contouring. They are actually the only company in my watchlist that scored maximum on my financial checklist. I love to watch their financials. While we're in an overvalued market, INMD has only 18.73 PE and 0.6 PEG. They certainly got hit by Covid, but I would be very surprised if they don't multiply their market share over the next years.
- $SMCI. Based mainly on servers and storage solutions. They are the supplier for cloud computing and AI based companies. They were ranked 18th fastest growing company by Fortune Magazine in 2016, but they still have a long way possible to grow. I see them stagnating a bit for a few years, but they definitely have potential in the long run. Financially very stable, big on cash to make some acquisitions and trading at only 14.84 PE.
- $CDLX. Great business model. They basically turn financial transaction data into valuable information for advertising. They show returns as high as 30:1 for advertising spent. Not only is the online payment industry growing fast, but after Covid companies will need to work their advertising budgets even more efficiently. CDLX has momentum and will increase that market cap massively. That future outlook has a price unfortunately and I feel they're too expensive right now.
- $OLED. They hold patents on ultra high definition OLED screen technology. There's still a large transition going on from LED to OLED screens. They are estimated to increase their manufacturing with 50% by the end of 2021. Unfortunately most of that growth is already priced in right now. It doesn't take away the longer term potential, but it doesn't make it that sexy of a buy right now.
- $OMCL. Omnicell provides pharmacy automation solutions and other tools for healthcare systems. Big on cash, low on debt. They have an interesting business and the automation of healthcare will continue to grow, however they are also trading a bit above value.
- $PCOM. A technology company based on e-commerce and services through loyalty programs. Most of their partners are airlines, which explains their difficulties of getting back up since the drop. At the moment it's unsure how this will work out. There will barely be room for bargains or rewards, however while the industry has to build up again, there's an opportunity to take away long time customers from competitors. Although they have enough cash to weather this crisis, they are depending on the industry. At PE below 10 and having a decent cash position, it's worth a gamble.
- $APPS. Digital Turbine offers a mobile platform mainly for new apps. They have a very high future revenue forecast of 202.2% over the next 3 years. Big on cash and no debt as well. They already acquired Mobile Posse in March, diversifying their platform. Analysts are putting an average price target of $9.88 on them, giving it a 61% potential return.
- $NVMI. They develop and produce process control systems used in the manufacturing of semiconductors, mainly focussing on industrializing X-ray and optical technologies like holographic images. Cash to debt 6.1, debt to equity 0.1, quick ratio 5.75, ROE 12.83% and ROIC 20.26%. Their financials are great. The only thing you could say is they are slightly overvalued, but still a very nice buy in comparison to the overvalued tech industry.
- $INS. Active in the fintech sector, they provide tech solutions and processing services. Very similar financials to NVMI. Big on cash, almost no long term debt, great returns (ROE 29.7% / ROIC 85.95%) and steady growing EPS. They are also slightly overvalued, but should easily get back to $45 range after the crisis is over.
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So, that's about all I have to share. This will also be my last big post a while. Analyzing stocks has been my main occupation for the last three months, but it's time to work on opening up the hotel and bar again. I hope some of you get something out of this. I'm not a professional so always check again for yourself. I'm gonna hold on to these companies for a while now. Will add some extra capital at the beginning of 2021, so you could expect another big post about my newest findings then. For now, I'm gonna take a break from following the market day in day out and enjoy the weather a bit more.
Have a good one!
Will the Green Bay Packers win OVER/UNDER 9 games? By University Stats Prof!
submitted by David-MJ to sportsbook [link] [comments]
Matt LaFleur’s first season as Green Bay’s head coach has to be considered a success. He led the team to a 13-3 record, which secured the NFC North title.
The Packers held off the Seahawks to a 28-23 home win in the first round of the playoffs, but were ousted by the Niners in a brutal 37-20 thumping (a game in which the Packers dugged themselves into an early 27-0 hole).
2. Offensive Position-by-Position Breakdown 2.1 Quarterbacks (QBs)
Aaron Rodgers will be entering his 16th NFL season. He had another excellent year with a 26-to-4 TD-to-INT ratio and over 4,000 passing yards. He finished as the 7th-best QB in the league according to PFF ratings.
At 36 years old, he is likely to have a few good years left. After all, Drew Brees and Tom Brady posted nice statistics in their late thirties.
Rodgers has been very durable throughout his career, but he’s not invincible either. Tim Boyle was the backup plan last year, and the team needed to upgrade the position while starting to think about the post-Rodgers era.
Still, drafting Jordan Love was the most questionable and talked-about pick in this year’s draft. People expected the Packers to go with a veteran backup QB. Rodgers has mentioned several times he wants to play in his forties; he can still offer a good five years of solid play in the frozen tundra.
Love has possesses great size, throws with velocity and he’s very mobile. The main knock on him is the decision-making and inconsistency.
As a sophomore, he threw 32 TD passes versus 6 interceptions. He regressed a lot last year by posting a mediocre 20:17 TD:INT mark. Granted, his surrounding cast was very weak and he had to go through a coaching change.
Love can throw from many different arm angles; he reminds people of Patrick Mahomes in this regard. He can throw a fastball or a soft touch pass.
Quick note: he almost quit football when he was 14 years old after his dad committed suicide. However, he knew his dad would want him to keep playing, so he did just that.
2.2 Running Backs (RBs)
Aaron Jones is a top running back in this league. Along with Jamaal Williams, they form a lethal duo.
Including the playoffs, Jones ended up scoring 23 touchdowns in 18 games. His 19 regular season scores were the second most in Packers history. His numbers have increased in each of his first three years as a pro. He is also excellent as a pass catcher.
Despite playing in the shadow of Aaron Jones, Jamaal Williams still finished as the 17th-best RB based on PFF rankings. He does not seem like a lead back, but he’s a perfect change-of-pace guy. Much like Jones, he can do some damage as a receiver as well.
Williams has been a steady performer thus far in his career. He has rushed for 450-550 yards in each of his three seasons, while catching a minimum of 25 balls. He has 15 total TDs over this three-year span.
If you thought GM Brian Gutekunst made a strange move by drafting QB Jordan Love in the first round, he doubled down with another head scratcher in the 2nd round when he took A.J. Dillon.
Message to Mr. Gutekunst: Aaron Rodgers needed pass catchers, not a third running back! I really don’t get this pick either. I’m not saying Dillon won’t be good in the NFL; only time will tell. However, it clearly wasn’t a position of need for the Packers.
Dillon is a power back who rarely breaks off huge runs. He racked up big numbers in three seasons in Boston College. He’s unlikely to become a three-down starter, especially since he’s not a good pass catcher. He will likely be used sporadically as a rookie.
2.3 Wide Receivers (WRs)
Davante Adams is one of the best at his position. He had a streak of three straight seasons with at least 10 TD receptions snapped last year, but he still caught 83 passes for 997 yards in 12 games (he missed four games because of a toe injury).
Outside of Adams, all pass catchers appeared lost on the field. None of them developed a good chemistry with Rodgers.
Marquez Valdes-Scantling was a huge disappointment last year. He showed promise as a rookie with over 500 receiving yards. Here’s a jaw-dropping statistic: after Week #7, MVS did not get more than 19 receiving yards in any meeting. That’s awful.
One of the guys benefiting from Valdes-Scantling’s poor play was Jake Kumerow. He got more playing time than expected, but still only caught 12 passes. He is closing in on 30 years of age and is limited as an athlete, so he’s not a long-term answer for sure.
Allen Lazard was also thrown into action far more than expected. He finished second in terms of receiving yards for Green Bay, but let’s face the reality: the undrafted guy remains more of a #3 or #4 WR for any team.
Geronimo Allison was another bust last year. His top performance over the last 12 games (including the playoffs) was a meager 33 receiving yards. He left for another NFC North team, the Detroit Lions.
In other words, the #2 role is wide open. The team hopes newly acquired Devin Funchess can step into that role. The former second rounder had his best season in 2017 with the Panthers with a 63-840-8 stat line. He signed with the Colts last year, but played just one game before breaking a collarbone. He will be 26 years old this season and provides an interesting prospect for the Packers.
2.4 Tight Ends (TEs)
We’re not done talking about 2019 busts. Jimmy Graham was one of them. He clearly looks washed. He received the lowest grades of his 10-year career, and deservedly so. The Packers released him and he signed a few days later with the Bears (a horrible mind-boggling two-year, $16 million contract).
Marcedes Lewis received surprisingly good marks from PFF. If you look into the numbers, the good grade occurred mainly because of efficient run and pass blocking. He’s not much of a pass catcher and he will be 36 years old when the season begins.
Robert Tonyan will also be in the mix, but the guy that has the best chance to break out as a receiver in 2020 only caught three passes last year (all in the playoffs): Jace Sternberger. Taken in the third round of the 2019 draft, Sternberger was a threat at Texas A&M in college. He missed most of the regular season because of injuries, but the door is wide open with Graham’s departure.
We might also see third-round rookie Josiah Deguara. He has a great motor and plays extremely hard. He’s undersized as a tight end, though.
2.5 Offensive Line (OL)
The Packers had a pretty solid offensive line in 2019. All five starters managed to play at least 84% of the offensive snaps. And they all finished above-average according to PFF ratings!
The bad news, however, is the Bryan Bulaga left for the Chargers. Despite turning over 30 years old, he still played at a high level.
The Packers decided to replace him by signing Rick Wagner, formerly of the Lions. Wagner’s PFF grades from 2016 to 2018 were as follows: 74.0, 75.2 and 71.4. Last year, his play deteriorated a lot and he was tagged with a 59.0 grade. He finished as the #61 tackle among 81 guys.
I like the fact that the team is returning four out of five guys, but replacing Bulaga with Wagner has to be viewed as a downgrade.
2020 VS 2019 OFFENSE
The Packers offense finished in the middle of the pack in points scored per game. Barring major injuries, I expect about the same production in 2020.
The QB and RB situations remain the same.
Adding Funchess is not a huge move, but it won’t hurt. The team clearly needs someone to step up opposite of Davante Adams. At tight end, losing Jimmy Graham means close to nothing since he was so ineffective. Sternberger might bring a nice contribution, but we can hardly expect him to be a game-breaker.
Finally, the OL will take a dip with the loss of Bulaga. I don’t believe Rick Wagner can do better than him.
All in all, I view the additions/departures as a slight negative for Green Bay, but having so many starters returning to the lineup for a second straight season is always a good thing in the NFL. For these reasons, I expect a similar output as 2019 from this unit.
Final call (2020 vs 2019): Stable
3. Defensive Position-by-Position Breakdown 3.1 Defensive Linemen (DLs)
Kenny Clark had a fantastic season! He is one of the best interior rushers in the NFL. He recorded six sacks for the second straight year, and PFF ranked him as the 13th-best interior linemen out of 114 qualifiers.
The same nice comments cannot be made about Dean Lowry. He had the worst season of his four-year career as a pro. He did not post a single sack and wasn’t great against the run either.
Reserve Tyler Lancaster is only there to provide some depth. He isn’t particularly good in any aspect of the game.
The team did not make any move regarding this position during the offseason.
3.2 Defensive Ends (DEs) / Edge Rushers (ED)
During the last offseason, the Packers acquired two Smiths: Za’Darius and Preston. They burst onto the scene and got 13.5 and 12 sacks, respectively.
Obviously, both received high marks for their pass rushing abilities, but Preston finished as an average linebacker overall because of mediocre run defense and poor coverage.
Kyler Fackrell was a huge disappointment in 2019. After racking up 10.5 sacks in 2018, he only got one in 2019! He signed a one-year deal with the Giants.
First-round pick Rashan Gary wasn’t necessarily impressive during his rookie season. He played 23% of the snaps, while obtaining two sacks but very pedestrian marks from PFF (an overall 55.8 grade, which is near the bottom among edge defenders).
3.3 Linebackers (LBs)
Green Bay lost its leader in tackles from the past three years, Blake Martinez. After starting 61 of the last 64 Packers games, Martinez decided to join the New York Giants. He had the second-most tackles in the league last year, but don’t be misled by that number. Martinez still finished slight below-average (52nd out of 89 LBs) because of poor play against the run.
The Packers also lost some depth at the position when B.J. Goodson left for Cleveland.
Green Bay picked up a linebacker from the Browns roster: Christian Kirksey. He was picked in the 3rd round of the 2014 before being involved in all 16 games from his first four seasons in the NFL. However, he has been plagued with injuries over the most recent two years; he played 7 games in 2018 and only 2 games in 2019.
He is also capable of racking up tackles, as shown by his 2016 and 2017 seasons where he obtained 146 and 138. His PFF grades during his first four seasons varied between 61.9 and 69.3. Just to give you a rough idea, a 65.0 rating would have been good for 29th place out of 89 LBs.
3.4 Cornerbacks (CBs)
Jaire Alexander has done the job as the #1 corner. He has obtained 72.4 and 71.2 marks from PFF during his first two seasons, which is well-above average. He’s so-so defending the run, but his coverage skills are very good.
The number two corner, Kevin King had five interceptions last year after getting just one over his first two years as a pro. He did show some improvement after two rocky years. He finished 2019 as a middle-of-the-pack corner.
Tramon Williams played 74% of the snaps and had a surprisingly good season despite his age. He will be 37 when the 2020 season begins. He is currently a free agent and it remains to be seen if the Packers bring him back or not.
In summary, Alexander and King are both pretty young and could still be improving, but Tramon Williams provided quality play and it’s uncertain if someone else can pick up the slack.
3.5 Safeties (S)
Adrian Amos and Darnell Savage were the top two guys here.
Along with Za’Darius and Preston Smith, the Adrian Amos was another excellent signing by the Packers during the 2019 offseason. Amos had been a reliable guy in Chicago for four seasons, and he continued to excel in the frozen tundra.
After being selected as the #21 overall pick in the 2019 draft, Darnell Savage did show some flashes as a rookie last year. He finished as the #47 safety among 87 qualifiers, which is very satisfying for a rookie. He earned nice marks in coverage (77.4), but horrible ones against the run (37.7).
Will Redmond will be back as the number three safety. He’s not starter material for sure.
2020 VS 2019 DEFENSE
Most of the starters are returning in 2020. That’s the good news.
The team lost their leader in tackles, Blake Martinez, as well as pass rusher Kyler Fackrell and CB Tramon Williams.
The only acquisition worth of note is Christian Kirksey. Him not having played very much during the last two seasons brings some question marks.
The Packers defense struggled against the run last year, and there’s no reason to believe that will change in 2020. Green Bay still finished 9th in points allowed, which was a very acceptable result.
Unfortunately, a decrease in effectiveness is expected and I predict this unit will end 2020 as a middle-of-pack defense (12th – 19th in points allowed).
Final call (2020 vs 2019): Small downgrade
4. Regular Season Wins
According to sportsbooks, the Green Bay Packers are expected to win 9 games this season. Should we bet the “over” or the “under”?
Here is the methodology I used in order to answer this vital question:
- Use BetOnline.ag’s point spreads on all 256 regular season games.
- Convert those point spreads into win probabilities.
- Simulate each of the 256 games, according to those win probabilities, via the R statistical software.
- Repeat the previous step one million times (you get 1M simulated seasons).
- Count the proportion of seasons where the Packers won more or less than 9 games.
Here are the results (excluding the simulated years where the Pack won exactly 9 games, since in those cases your bet would have tied):
Tip: Bet OVER 9 wins
| ||Estimated Probability ||Sportsbook ||Odds ||ROI |
|OVER 9 WINS ||51.4% ||bwin ||+115 ||+10.5% |
|UNDER 9 WINS ||48.6% ||Heritage Sports ||+100 ||-2.8% |
Return On Investment (ROI): +10.5%
Rank: 25th-highest ROI out of 32 teams
Minimum odds required to bet (i.e. ROI = 0%): -106
Here are BetOnline’s point spreads for the Packers’ 16 regular season games:
HOME: -6 vs ATL, -10 vs CAR, -4.5 vs CHI, -6.5 vs DET, -11.5 vs JAX, -3 vs MIN, -2.5 vs PHI, -3.5 vs TEN.
ROAD: 0 @ CHI, -2 @ DET, 0 @ HOU, +2.5 @ IND, +3 @ MIN, +5.5 @ NO, +6.5 @ SF, +2.5 @ TB.
Note: The “Best odds” from the table above were obtained after looking at 13 well-known online sportsbooks on May 18th, 2020.
TOMORROW: I'll talk about the team whose ROI is the 24th-highest in the league, the Pittsburgh Steelers!
Did you like this write-up? If so, comment below! I'd like to know YOUR opinion on what to expect from the Packers' 2020 season!
Algos move the market in the short term, not retail/institutional/pension funds
submitted by Randomness898 to investing [link] [comments]
My title of my post is the statement I stuck too from the very moment this selloff started. I've stayed consistent with this belief the entire time, whether we go up or down. If you just wanted any more proof, take a look at the Twitter link, as an additional piece of evidence. It's the same case in the recent up moves (the futures are contributing to the majority of the recent up move). https://mobile.twitter.com/bespokeinvest/status/1248368169091239937
Retail, institutional investors, pension funds, etc. - they don't trade overnight futures. However you know who does? Stat arb algos as well as option trading firms/hedge funds/prop trading firms/bank risk-mitigation algos. For example if a hedge fund was put into a dicey risk situation, they turn on these algos to offload risk overnight. If they can't sell credit risk, they have to do it elsewhere like in ES futures. If an option market maker is short gamma and realizes oh crap, this is gonna cause me to be super long tomorrow with this move in ES, I've gotta hedge and turn on my overnight algo to sell first so I get less long deltas overnight.
So when you guys want to ask "who in the world is even selling" as we sold off and now "who in the world is even buying" as we go up, it's the algos. You are right, not many actual people are buying these days. It's the algos, and when I say algos, I mean the risk/liquidity algos.
Do you want to know why the algos are buying now? It's simple. Jerome Powell said he's buying credit ETFs. If you are a market maker, you have to sell these ETFs to them. Now you have to find a beta hedge. What's the best way to find that beta hedge? Buy ES futures. This then causes SPY to open higher. Now, if your algo was fast enough, you could have front ran the FED by buying HYG and JNK (this is why their NAV is trading at a massive premium), but if you weren't, well you get desperate as you get picked off from being short credit, so now you have to buy ES, SPY, and anything else you can. You might have to then buy SPX/SPY puts with it since you then have to protect your now new ES/SPY longs (which you didn't actually want to buy but were "forced" to buy),, which is why VIX hasn't dropped that much relative to how much SPY has gone up. It's all an algorithmically driven market.
This is why the entire market, on BOTH the down move and the now up move, has decoupled from the economy. So no, you guys may think people are FOMOing in. That's not true. Most investors aren't FOMOing in right now. The algos have just gone out of control on both the down and up moves and it's all technical.
Correlation (with other assets like credit and bonds), positioning (short squeeze and forced liquidations), option gamma (short gamma makes moves bigger), and short term stat arb strategies dominate the market short term. Retail and even big firms like Blackrock or Berkshire do not. Fundamentals win out long term. It may be months for SPY, and it is years for individual companies. No short term movement is ever controlled for by actual people wanting to put on a position.
As I said a month ago when we were selling off, if Citadel and Renaissance Technologies wanted to hold up the entire market for a day, they easily could. They may not want to if it's not in their favor, but they easily could. Two firms. That's enough. That about sums up this market. (EDIT: this part may have been extremely confusing due to my bad wording, but if you read some of the posts below with like me, MasterCookSwag, and ArseneWankerer, I try to clear up my meaning)
Another interesting and true fact? If options trading was ELIMINATED, the market would NEVER have sold off to 220 and it would have never skyrocketed back to almost 280 now. You may ask it's the same fundamentals right? Yes it is, the fundamentals of the economy and virus are the same, but elimiate options, and actually the entire market changes.
Finally, to add one more thing, if this wasn't clear, there needs to be a catalyst for the first wave of selling and buying, but everything after that is purely technical. For example, the catalysts would have been the virus and the oil shock in the wave of selling. The catalyst would have been the Fed in the wave of buying. However, the catalyst in itself shouldn't have produced a very large move. For example, imagine we go from 290 -> 270 as an example. The catalyst, if only traded by itself, should have moved it from 290 -> 285. However, the algos, with all the technical details I described above, then moves it from 285 -> 270. This is what I call "forced selling" or "fake selling," and I've alluded to this in my other posts. There is also "fake buying" in the reverse. However, "fake selling" is usually more powerful because on average people leverage up to be more bullish than bearish in an average market environment. So yes, the initial catalyst is important, but it's not the reason for the majority of short term moves.
I worked in the industry so I know this. You can call it a dirty secret, but hopefully if you see some actual statistics (see the above link on Twitter), you'll understand too. Fundamentals eventually will win longer term, but you know that saying about how the market can stay irrational before you stay solvent, well that's literally true because the market is algo driven. And as we progress into a state of better technology and even more options volume (think about how many people just recently started trading options) and other assets, this will be more and more true. One of these days, which could be like in 20+ years, if some black swan catalyst happens in conjunction with all of these technical factors I mentioned, you literally can see a 20% triple circuit breaker day immediately and like 90%+ of that drop would be all technical.
I'll try to answer any questions to the best of my ability.
EDIT: So for the people who are pointing out I don't understand what a MM is, let's do a easier example with NFL betting lines. Vegas acts like a MM in this regard. When an NFL line closes, is it 50/50 on both sides of the line? Nope. Vegas is still subject to risk. That's why sometimes they win or lose a lot of money depending on the outcome of an event, even though they are a "MM" too. Yes, Vegas will adjust a line based on some order flow, but it has their OWN MODELS TOO to determine what is fair, so they will adjust accordingly to the toxicity of the order flow. They will not just completely change their line so much so simply based pure order flow to keep on capturing 50/50. If you really think an options MM for example goes home every night flat every Greek, you are kidding yourself.
The point I was making above is a firm such as Citadel does so much volume that they have a huge impact on the market, whereas if you take them out of the market for say a month, the entire market microstructure changes in options and equities. Notice in my original post, I clearly said that these firms may not actually want to do this in their favor, but I am using them as an example saying they do so much volume they can IF they wanted to (in options you are more likely to do so than equities). I was emphasizing this point to show you guys how algos play such a large role in the market. It's similar to Vegas when they act as a MM to betting lines. They control the betting line at the end of the day. They aren't always 50/50 on both sides with no risk. Of course, Citadel and SIG in options will adjust their vol curves based on some order flow, but at the end of the day, they control most of the options vol pricing, which indirectly also affects equities in a big way when we have massive short gamma moves.
Similarily, apply it to sports betting. Let's say we shut down Vegas for a month and let only DraftKings price all the betting lines. I bet you the lines would be different and the volume would be different. Would they be completely different (like a -3 to a +3 line)? No, it wouldn't be that extreme, but it would be different and volume would be different and reaction to order flow would be different. Just think about it like this and apply it to trading.
EDIT2: this was also my post like ~3 weeks ago when we were like ~230. Too bad investing
deleted my context of my post (since it relates to a lot of what I said below), but you can still see my title and my comments, so you know what I was calling. Yea sure, you can say I got lucky, but I wasn't wrong. https://www.reddit.com/investing/comments/fjtkzh/we_are_very_close_to_the_bottom/
Addressing the above link, it's the type of logic that I am using in my below posts to probabilistically call bottoms like this. I'm never 100% sure (it's impossible to even be like 70%+ sure imo), but if you put some of this together (like when does the forced selling for the risk/liquidty algos stop?), you can actually call bottoms a bit easier than just winging it 50/50. Notice that this also coincided with March options expirations, as I mention, options are a big part. It also conincided with Jay Powell saying he's going to "alleviate the risks" (this is the forced selling from algos risk) he sees in the repo and now credit market.
posted this, if you want a real professional talking about it https://www.realvision.com/market-makers-and-coronavirus-the-mechanics-of-a-market-sell-off?utm_source=contributor&utm_medium=referral&utm_campaign=43900_HK_GH_CONT_W1_LINK
EDIT4: ok last edit but https://www.investopedia.com/terms/p/pinningthestrike.asp
is just a quick example of one phenomenon that happens due to options and market makers. There's not going to be many articles you can find online on about what I'm talking about, but this pinning the strike phenomenon is a well-observed effect that's actually writen about of what market makers can do in terms of controlling price action due to their risk. Interestingly, what we have in our case the last month is the opposite of this in which rather than strikes getting pinned, strikes get blown through to cause the huge moves (since we've been in short gamma the last month). The article isn't super detailed, but can give you a general idea of one effect.
EDIT5: sorry I'll add one last edit...I do realize maybe my wording was not the greatest in my post, and after reading it again, it does sound a bit "forceful" at times, so I apologize for that. This was meant to be more informative, but please don't take it as I am trying to force any one opinion on anyone. Apologize for that!
$DKNG Makes No Sense to Me - Lots of Thoughts
DKNG has seen huge gains this week, mostly focused on Tuesday and today, Thursday. Both days saw intraday spikes on sports-world news: on Tuesday afternoon a presser with Gary Bettman was announced and on Thursday it was announced that the Premier League would return in June. Oddly, the stock did not move back down at all after Bettman’s announcement turned out to just be an expanded playoff format, and nothing about a return to the ice. The Premier League news didn’t seem to have much impact on other sports betting stocks either. submitted by TheGlove2ReignMan to investing [link] [comments]
Both of these events point towards something that seems obviously clear: DraftKings’ stock is hugely overpriced, but seems to keep being driven up just by trading. I think there are cases to be made for short term bull or bear, and for long term bear. I’m already in on the long term bear case with Nov ‘20, Dec ‘20 and Jan ‘21 Puts that have all taken a beating, but debating what the profitable short term play is.
For some context, I used to trade bonds on one of the biggest desks in NY, but moved to be closer to family a while ago and run my own business. My state is not supported by DraftKings, so keep in mind when reading that I am a bit salty towards the company and their ability to sniff out VPNs. Been a long time lurker here, but this is my first post.
The company’s Q1 earnings was pretty enlightening and quite the spin job. I was shocked to see the stock rise that day after what I read to be a pretty poor outcome. Growth in marketing expenses can be written off as entering new states, but seeing no growth in net revenue despite 30% growth in gross revenue means that the company has a growth problem, in other words almost all the revenue growth was driven by giving away free bets and reducing vig. Let’s look further at revenue growth though.
I found it very interesting that the company led with “30% revenue growth” when, in fact, that was only at Old DraftKings, which makes up about 75% of New DraftKings revenue. SBTech makes up the rest and grew at only 3%, giving the public company a 23% growth rate for the quarter, not 30% - spin job.
The company also gave us an interesting insight into coronavirus’ impact on their business, maybe unintentionally. At Old DraftKings, they noted 60% growth through March 10th. If we assume each day through the quarter is equal, that means the last 21 days of the quarter would have been down 70% vs Q1 ‘19, that’s big. However, we know not all days are created equal in the world of sports, and Q1 included 5 NFL playoff days and the Super Bowl. If we assume NFL betting days are 3x a normal day and the Super Bowl is 3x a normal NFL day, you can see your way to revenue post-March 10th being down 95%. A similar look at SBTech’s drop from +19% to only +3% means revenue post-coronavirus is down at least by half.
Another interesting lens to use in looking at the company is how they pitched themselves when the merger was announced five months ago in December. On slide 22 they compare their valuation to a variety of comps, trying to show that the valuation is fair, probably trying to alleviate the fact that the valuation for DraftKings was about 4x what Paddy Power paid for FanDuel 18 months earlier. I’m going to ignore the “EV / 2021E Revenue – Growth Adjusted” multiple that they highlight, because adjusting a forward looking multiple based on your own forward looking growth projections is absolute garbage, and instead look at EV / TTM 3/31 Revenue for those same comps.
At $39 per share, DraftKings has a market cap a bit over $15 billion on TTM revenue of $451 million, giving them a revenue multiple of 33.7x. For those of you that haven’t been around the block a few times, that is outrageously high. The “High Growth Consumer Internet” category that they selected is at 8.1x and “EU Sportsbook Operators” at 3.6x. Their best comp is probably Flutter, which is Paddy Power + Fanduel + Stars, trades at 7.8x. DraftKings deserves a higher multiple than Flutter given that they are pure-play USA vs Flutter which has a lot of retail european revenue that isn’t high growth, but the two companies currently have the same market cap, despite FanDuel being a direct comp to DraftKings with more market share in the fast growing business segments. Even if you said DraftKings should trade at a 50% premium to Flutter, which is being very generous, that implies a share price of only $13.50.
I know what you’re going to say: “this is all about more states allowing sports betting.” Fine, let’s look at what would need to happen at the state-level to get DraftKings’ current valuation to be reasonable. Going back to the December investor presentation, DraftKings estimates their sports book net revenue at $2.3 billion given 25% market share and 65% of the US having online betting, with a 22% allowance for promos from Gross to Net. That let’s us back into $4.5 billion of gross revenue at 100% of the population. Let’s then give them a 30% bump on that for iGaming. Using the company’s current $15 billion valuation and the same 50% premium to Flutter’s revenue multiple above (11.7x) that means they need $1.28 billion of revenue, or $831 million more than they currently have. $831 million more revenue needed means they need 14% more of the population to legalize in the very short term. Of the big five states, CA, TX, FL, NY and PA, none are going to add any population, with PA already online, NY choosing retail-only and the other three being no where close to legalization and widely considered by researchers and lobbyists to be years away. The remaining 46 states, including DC, average 1.3% of the population each, meaning you need a windfall of states to add 14% of the population.
Don’t get started on nationally legalized sports betting, no one is even pushing for that and it is never going to happen. The SCOTUS repeal of PASPA was as much about taking away the Federal Government’s ability to make national decisions like allowing or disallowing sports betting as it was about sports betting itself. Sports betting will roll out throughout the US, but it is going to be a state-by-state slog.
Another thing to consider is what the company might do with its highly valued stock. As we saw with Tesla a few months ago, a big run up in stock price is a great time to do some financial maneuvering. I think there are two very good options for management right now. The first is obvious: follow-on equity offering. In going public via a reverse merger with a SPAC, DraftKings barely tapped the big institutional investors. A follow-on would be a great way to load up the coffers further - anyone that watched TV in 2015 knows they love to spend money on ads - at a very attractive valuation for the company. The problem with this is that new shares coming in, or the follow-on pricing poorly, could be a big drag on the current share price.
Another option might be a little less obvious, but I think could make a lot of sense for the company: Buy William Hill. William Hill currently has a market cap of about $1.5 billion. They have a huge footprint in Europe, a market that DraftKings previously tried and (largely) failed to enter, are a big threat to DraftKings’ DTC approach in the US and have the tech that powers much of the land-based casinos’ sportsbook operations in the US. DraftKings could buy them with their cheap stock, or issue new equity to raise money for the acquisition. DraftKings would add a ton of revenue, could cut lots of duplicated costs, diversify across geographies and sports to temper their seasonality, and replace WillHill’s outdated tech with their much better apps. The big downside is that the CEOs of the two companies seem to really dislike each other.
One reason that I think the stock could be up so much since the “IPO” is that there are a very small number of liquid shares. Remember that this wasn’t an IPO at all, it was a reverse merger with a SPAC, meaning that a much higher percentage of outstanding shares are currently locked up than would be in a typical IPO. That constraint on supply with big retail demand could be a huge driver in the stock gain.
Circling back to be three cases for what I think could happen: - Short term bull: Sports come back, stock (irrationally) trades up on it - Short term bear: Correction to a more realistic valuation, bulls taking gains, any of NHL, NBA, MLB announce they won’t play again in 2020, financial maneuvering by the company - Long term bear: Correction to a more realistic valuation, bulls taking gains, any of NHL, NBA, MLB announce they won’t play again in 2020, financial maneuvering by the company, Q2 or Q3 earnings disappoint/are eye opening, any blip to the NFL cash cow, NBA or NHL ‘20-’21 season delays, lockup ending in October
Just giving my two cents on how I’m looking at this and trading it, and curious to hear any other thoughts or theories on real reasons why the stock is moving and where it is going.
Last thought: for those of you that like DraftKings at this price, you should LOVE Flutter at this price.
Bankroll Management Part I
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Bankroll management is arguably the most important concept to understand to maximize your chances of success (or rather, minimize your chances of failure).
Consider this scenario: You magically become a world-class handicapper and can win 55% of your bets on -110 lines. Did you know that with a $1,000 bankroll and flat betting $100 per game at -110 lines, you would go broke ~14.0% of the time after 100 bets? After 1,000 bets the chances of you going broke are a more staggering ~31.0%.
Why does this happen? Despite a positive expected value, you’re betting too much. And this gives you a high risk of ruin.
With a 55% win rate on -110 lines, the Kelly Criterion states that 5.5% of your bankroll is the ideal wager size to maximize the median return of your portfolio. So, what if we flat bet $55 instead, which represents 5.5% of our bankroll. What’s our risk of ruin then? After 100 bets? ~2.0% After 1,000 bets? ~13.0%.
Better, but still significant risk of ruin.
Some might be surprised to see any risk of ruin at a 5.5% bankroll allocation. One of the assumptions, however, that the Kelly Criterion relies on is that bet sizes are a percentage allocation of your portfolio and not a fixed amount. Among sports bettors, a fixed bet amount is frequently referred to as a bet “unit”.
Bet Units vs Bet Allocation Record: 72-53 +13.7 units Patriots -7.5 2 units
Sports bettors love to measure their performance or display their picks as a function of “units”. Most people use it and because of its widespread adoption, it’s easy to communicate between parties. Since it’s become the de facto unit of measurement for sports bettors, it is widely accepted that the best way to practice bankroll management is to 1) determine your wager size and 2) never deviate from that bet size.
Let me explain the risks behind that strategy and why Cleat Street doesn’t recommend it.
Flat Betting $55: Expected Value of 1,000 Bets
We all know how to calculate the expected value, or EV, of a single bet. All you need is three inputs:
1) Payoff of a win (Pw): $50
2) Payoff of a loss (PL): -$55
3) Probability of winning (p): 55.0% EV Equation
So - if we want to determine the EV of 1,000 bets, can we just multiply $2.75 x 1,000 and get an EV of $2,750?
If you had unlimited funds, then yes. While there is variance around our expected win percentage, our ending bankroll would be normally distributed with a median of $3,750 ($1,000 starting bankroll + $2,750 EV)
. Without the constraint of going broke, the distribution of the ending bankroll looks as follows: Bankroll distribution
However, most of us don’t have unlimited funds. We are constrained by our bankroll, so we must account for the possibility that we lose our entire bankroll at some point between Bet #1 and Bet #1,000. As a result, we might not get the chance to finish making all of the bets. Monte Carlo Simulation – Flat Betting
To determine the likelihood and impact of going broke at some point between Bet #1 and Bet #1,000, we can use a Monte Carlo simulation. We simulated the 1,000 bet opportunities 10,000 times resulting in the following risk-return profile:
Risk of Ruin: ~13.0%
Expected Return: ~4.8%
Median Return: ~ $2,645
Expected Portfolio ROI: ~265% Without the benefit of an unlimited bankroll, the risk of ruin decreases our EV by nearly 5%, decreasing from $2,750 to ~$2,645.
Starting with a bankroll of $1,000, our median ending bankroll is ~$3,645 but has a distribution as displayed below: Ending Bankroll Distribution Bet Allocation of 5.5%: Expected Value of 1,000 Bets
When you bet a percentage of your bankroll, the expected value calculation changes a bit. Your payoff outcomes are now framed as a percentage:
1) Payoff of a win (Pw): 5.0%
2) Payoff of a loss (PL): -5.5%
3) Probability of winning (p): 55.0% EV Equation
To determine the EV of 1,000 bets, however, we cannot just multiply 0.275% x 1,000 and get an EV of 275%. This is because each bet compounds on one another when you are betting a percentage of your bankroll.
Ok – so instead we determine the expected value by saying that you expect to win 550 bets (55% x 1,000) and lose 450 bets (45% x 1,000) and calculate by compounding the returns as follows: Median Calculation
The above computation reflects the median of the distribution of outcomes as well as the most likely outcome
. Yes, the most likely outcome is that you win exactly 550 games, which would generate returns of $2,967. However, this scenario happens only 2.54% of the time.  The rest of the time, you either win more than 550 games or less than 550 games.
 Binomial probability inputs: Prob (Success): 55%, Num. Trials 1,000, Num. Successes, 550. Binomial Probability Calculator We get the following risk-return profile:
Risk of Ruin: 0.0%
Expected Return: 5.0%
Median Return: $2,967
Expected Portfolio ROI: ~297% “So you’re telling me, I have no chance of losing my entire bankroll, and I can increase my EV? That sounds too good to be true.”
You’re right – the above metrics are true, but they don’t tell the whole story. Although the risk of ruin is zero, there are many scenarios where you could still walk away a loser. To properly assess, we need to take a closer look at the distribution of outcomes.
The returns generated by using a bet allocation bankroll management strategy follow a lognormal distribution. A lognormal distribution is frequently used to describe the price of financial assets and effectively states that 1) the lowest that your bankroll can go is zero, and 2) your returns have a long-tail to the right.
Visually, the distribution of the ending bankroll after 1,000 bets looks odd when plotted on a linear scale: 5.5% Bet Allocation - Linear Scale
When plotted on a logarithmic scale, however the distribution appears normal (hence the name “lognormal”): 5.5% Bet Allocation - Logarithmic Scale
As you can see in the distribution above, there are scenarios where you still walk away a loser after 1,000 bets. In fact, betting 5.5% of your bankroll in this scenario will lead you to losing money approximately 20 percent of the time. To properly assess the risk-return profile, we’ll have to take a deeper look at the full distribution of outcomes in Part II.
What we’ll find is that although the Kelly Criterion is a betting strategy that maximizes median wealth in the long run, there are still considerable risks that may not make it ideal for most bettors. An underlying assumption is that it requires you to know your true win probability, which is impossible. In Part II, we explore Kelly Criterion in further depth and show how you can use the same principles to tailor a bankroll management strategy that better fits your risk appetite. Bankroll Management Part II will be posted tomorrow
Easy reading breakdown of DKNG as it soars
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Disclosure: This is not a comprehensive breakdown, and it's not meant to be. Just some key points and context that I thought you'd find interesting. DraftKings is technology stock meets gambling
Three main products: Daily fantasy sports or DFS, Sportsbook, iGaming
DFS is OG DraftKings. Fantasy sports are where players make fantasy teams and battle each other to win money. However, sportsbook is where the money is: betting actual money on actual sports against the house. iGaming is basically an online casino with some online games you can gamble on, in addition to the classics like blackjack and Russian roulette.
In addition to DraftKings, there’s also SBTech, the online gambling technology company that had an arranged marriage as part of the DKNG merger. Landmark Case
In 2018, the Supreme Court knocks down the federal law prohibiting sports gambling throughout the United States. Pandora’s box is open. Each state has to decide what it wants to do with gambling on its own. The Path to Legalization Map of Sportsbook legality
DFS legality is more widespread
Currently, 36% of the USA population lives in a state with some form of legal gambling and 24% in a state with legal online gambling. The population living where DraftKings is live or going live is only 13% of the country. There’s a lot of ground to cover.
NJ is the posterchild for sports betting legalization at the moment, and it’s DraftKings promised land. Generating 30% of DraftKings total revenue, it is a testament to the money waiting to be made if sports betting is made fully legal. The Risks for DraftKings
Regulation: Gambling is a money-maker, but it’s also a social disease. States will want to cash in with taxes of 6.8 to 36% but it will be a tough battle to make it happen. And that battle will unfold state by state. Just like with the marijuana industry, the fate of the market is undeniably shaped by how legalization unfolds. It could end up being a niche hobby in select states, or it could end up like gambling in the United Kingdom, where there’s a gambling shop on every corner. Or there could be a huge gambling market, but one that is monopolized by the States exclusively. If they’re going to allow gambling, why not take all the profits, right?
Competition: FanDuel and DraftKings once considered a merger before the FTC played tough. Now, together they own 95% of the DFS market in the USA with a slight majority going to DraftKings. However, there will be fierce competition as new states open up, and missteps could be stifling for either company in the early stages. The lifeblood fueling this battle? Cold hard cash burned up in advertising and incentivizing dollars. Maybe it’s not as bad as Uber since gambling has a chance at being profitable, but if you don’t like to see money burning, think twice about entering the online sports betting market over this coming decade.
Technology: The hardware of gambling is a liability. Paying for the bandwidth needed at the exact moment of a match when everybody checks their bet is expensive. Payment processing, user validation, server hosting, sports data, app store placement: these are all areas of vulnerability and cost that you can minimize but can’t eliminate. With SBTech in the fold, having complete vertical integration is the aim and strength of DraftKings.
The House Always Wins…Usually: Writing bets means risk. Thankfully, the DFS is player versus player, so DraftKings always wins, taking something like EDIT: up to 15% of what players put in. It's a bookkeeper's wet dream. But Sportsbook and iGaming have classic gambling risks which should be fine over the long-term. The Good Side (and Oh God They’re Beautiful)
Growth Potential: It’s a technology stock. The PE Ratio is over 600. When you buy DraftKings, you’re buying the dream of an America where gambling is as American as the Ford F150. A matured Sportsbook market in the USA would be around $20 billion, about $85 per adult. It’s a beautiful untapped (and non-existent) market with lots of money waiting to be taken. With Coronavirus, the slice of the sports betting pie that goes digital is bound to be more than ever before, if the sports happen
COVID19: The only thing that can stop a sports betting company from making money is getting rid of sports. Thankfully, new sports like Table Tennis, eSports, and a host of other betting topics have allowed DraftKings to get by. With lots of cash on hand ($450 million plus) and a monthly burn of $15 million, there’s enough to weather the storm. And if sports reopen with empty stadiums, fans may turn to online gambling to get their authentic sport experience.
Turnaround Time: The largest expense that DraftKings has is conquering new markets. Every time a state opens up, it’s a massive investment. That’s why analysts and executives don’t think DraftKings will run net positive for years to come. However, DraftKings experience in New Jersey has shown an average turnaround time of about two years is all it takes to recoup their initial investment when entering a new market. Some pretty tasty data to have coming in. The Numbers
Revenue was up to $323 million in 2019 from $226 million and $191 million the years prior. NJ made up $86 million of that, growing by 8.5x after sports betting legalization in late 2018 to make up over a quarter of revenue in 2019.
Net loss however was $146 million in 2019 from $76 million and $73 million the years prior. Cost of Revenue was $103 million, Sales and Marketing was $185 million, Product and Tech was $55 million, and General and Administrative was $124 million of that. DraftKings has never been in the green. They attribute the accelerated burn in 2019 to growth in new markets so whether its aggressive or reckless is up to you. To be fair, if you’re investing in this stock, you should be expecting them to burn every single dollar they get at this point.
Average monthly unique players was up to 684k in 2019 from 601k and 574k with the average revenue per monthly unique player up to $39 from $31 and $28. As of March 31st 2020, there were 720k monthly unique players with average revenue of $41 per. So continued growths in the midst of the early Coronavirus pandemic. Q2 will be revealing for certain.
The stock just skyrocketed to $34+ yesterday meaning a market cap of over $10 billion and a PE ratio of over 600. Take it for what it’s worth to you. Some Quirks
DraftKings revenue is seasonal. Q4 is the best when the NFL and NBA coincide, with Q3 and Q1 being roughly equivalent, and Q2 basically being garbage. With COVID mainly taking out Q2, perhaps there’s hope for sports by Q3 and Q4 to hit those high-earning months?
Controlled Structure: You get 1 vote for 1 stock, but CEO and Founder Jason Robins gets 10 votes for each stock. So whatever you do, he has 90% of the voting power. Good for long-term growth in a highly reactive landscape, but being powerless is never a fun feeling.
SBTech offers B2B solutions for other gambling companies looking to offer online sports betting and iGaming, so there’s that added benefit. In fact, the share of B2B has been growing from 1% in 2018 to 5% in 2019, so some diversification is happening.
DraftKings’s ticker symbol DKNG reminds me of Donkey Kong
Will the Los Angeles Chargers win OVER/UNDER 8 games? By University Stats Prof!
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Anthony Lynn’s first two seasons as the Chargers head coach were successful with 9-7 and 12-4 records. However, last year was a clear disappointment as the team finished dead last in their division with a 5-11 record. That included losing six of the final seven matchups.
Obviously, the team is entering a new era with a big QB change. They hope the 10-year drought without a division title is going to get snapped sooner than later.
2. Offensive Position-by-Position Breakdown 2.1 Quarterbacks (QBs)
After spending 16 seasons with the Chargers, Philip Rivers signed with the Colts. His 23-to-20 TD-to-INT ratio last year was the worst of his whole career. He still racked up 4,615 passing yards, though, but his arm looked weaker than ever. He also struggled as soon as he felt the rush coming.
Before the draft, head coach Anthony Lynn kept repeating that Tyrod Taylor was in the driver’s seat to get the starting nod under center. Does that still hold true after drafting Justin Herbert with the No. 6 overall pick? I doubt it.
Herbert is one of the most polarizing prospects. Some experts believe he’ll have a great career, while others see bust written all over him.
He is physically gifted with good size, an elite arm strength and mobility that allows him to elude the rush and pick up first downs with his legs. He is also known for being able to make all types of throws.
The knocks on him are as follows. First, some people question his leadership ability because he’s an introvert. Also, his decision-making isn’t always the best, he fumbles way too many times and a 64% college career completion rate isn’t all that impressive.
Tyrod Taylor might still have a shot to start under center, but his chances have clearly diminished with Herbert on the team. He has 54 career TD passes versus 20 interceptions, while adding 16 rushing TDs to his resume.
Taylor’s best years were with the Bills from 2015 to 2017. Over that time span, he completed 774-of-1236 passes (62.6%) with 51 TD passes and 16 picks. He helped Buffalo reach the playoffs for the first time in 18 years.
He tends to get blamed for being too conservative. He does limit the turnovers, but throwing 51 touchdown passes in 44 games in Buffalo was far from breathtaking.
After a bad experience in Cleveland in 2018 and not playing in 2019, can Taylor revive his career? It seems pretty doubtful. He makes for a great backup QB, though.
2.2 Running Backs (RBs)
Melvin Gordon left for Denver, which leaves the door wide open for Austin Ekeler to take over as the clear-cut #1 back.
Ekeler was excellent in both facets of the game: as a runner and as a receiver. For the second straight year, he rushed for about 550 yards with 3 TDs on the ground. However, he did a lot more damage through the air by catching a jaw-dropping 92 balls out of 108 targets, which included 8 receiving TDs and an extremely good 10.8 yards-per-catch average.
The undrafted runner from Western State has averaged 4.8 yards per carry thus far in his three years in the big league. This figure is likely to go down now that he’ll be the workhorse back, but he’s expected to get a lot more rushing attempts.
Gordon’s departure inserts Justin Jackson into the #2 RB role. He was picked in the 7th round of the 2018 draft and his main problem has been staying healthy. He missed three games in his rookie season and nine more the following year. In both cases, he rushed for close to 200 yards.
It’s unclear what Jackson can bring to the table due to his limited time on the field. Based on his draft status it’s hard to expect great things, but the jury is still out about his future.
2.3 Wide Receivers (WRs)
This position was dominated by two players: Keenan Allen and Mike Williams. All other guys caught less than 10 passes.
You can’t say enough about Keenan Allen. He’s just a super reliable target.
He was often the victim of the injury bug in the past, but he’s now played all 16 games in each of the last three years. During this time period, he has been extremely consistent by averaging 101 receptions for 1,263 yards and 6 TDs. He will be entering his age-28 campaign, so he still has plenty of gas left in the tank.
Mike Williams was the #7 overall selection in the 2017 draft out of Clemson. His numbers have increased each year, except the TD output which inexplicably dropped from 10 to 2 last year.
Williams had a whopping 20.4 yards-per-catch average, second-best in the league behind Mecole Hardman. He battled through knee injuries throughout the year.
The depth at the position is worrisome. The team drafted a couple of guys in later rounds: Joe Reed from Virginia and K.J. Hill from Ohio State.
2.4 Tight Ends (TEs)
Hunter Henry is one of the top tight ends in the league when healthy. The problem has been just that: staying healthy.
He tore his ACL during OTAs in 2018, which caused him to miss the entire regular season.
Last year, he missed four additional games due to a knee injury but he still set career-highs in receptions (55) and receiving yards (652). He has scored 17 TDs in 41 career games, which amounts to 6.6 per 16 games.
Virgil Green is the projected backup TE. He couldn’t get anything going even during Henry’s absence last year. It does not bode well for him. The former seventh-rounder has never caught more than 22 passes since joining the league nine years ago.
2.5 Offensive Line (OL)
Mike Pouncey’s first five years in the league were pretty good after being selected in the 1st round by the Dolphins nine years ago. Then, his PFF grades started to decline steadily. Things got worse last year when he suffered a career-threatening neck injury. He is on track to return in 2020, but his play has been below-average of late.
Right tackle Bryan Bulaga is now on the wrong side of 30, but that didn’t scare the Chargers off. They signed him to a three-year deal worth $30 million. He will solidify the line without a doubt. He played very well last year in Green Bay; he secured the #15 spot out of 81 tackles based on PFF rankings.
With Michael Schofield about to hit the free agent market, the Chargers acquired Trai Turner from the Panthers. Both received very identical PFF marks, but Turner is three years younger. He’s set to play left guard.
Dan Feeney won the preseason battle for the left guard position during preseason, and he ended up starting all 16 games for the second year in a row. However, once again the quality of his play left a lot to be desired. He rated as the 64th-best guard out of 81 qualifiers.
The Trent Scott experiment on Philip Rivers’ blind side was a huge failure last year. He was atrocious.
Can Trey Pipkins be the answer at left tackle? The third-round pick from last year didn’t play many snaps last year, so it’s hard to evaluate.
Or will it be Sam Tevi taking over at this key position? He did play left tackle as a junior with the Utah Utes. The 6th rounder has never received a PFF grade above 60 in his three-year career, so it’s hard to get excited about him.
2020 VS 2019 OFFENSE
Despite all the criticism around Philip Rivers, he still threw for more than 4,600 yards. Can Justin Herbert and/or Tyrod Taylor do better? I doubt it.
Also, am I the only one worrying about the depth at many positions on offense?
Instead of having a nice Gordon-Ekeler duo at running back, the team must now rely on unproven Justin Jackson as the backup runner. At wide receiver, what happens if either Keenan Allen or Mike Williams gets hurt? If Hunter Henry misses time at tight end, the team must turn to Virgil Green. We’re talking about HUGE talent dropoff between the starters and the backups at those positions.
At least the team upgraded its offensive line, but not that much. I like the additions of Bulaga and Turner, but Okung and Schofield left. To me, that represents a small net gain for the team.
Overall, I believe this unit suffers a small downgrade over 2019.
Final call (2020 vs 2019): Small downgrade
3. Defensive Position-by-Position Breakdown 3.1 Defensive Linemen (DLs)
All four guys receiving the most playing time on the interior of the line last year received poor PFF grades. Justin Jones finished 93rd, Brandon Mebane 112th, Damion Square 73rd and Jerry Tillery 114th out of 114 qualifiers. That’s awful.
Two of those players are now off the team: Mebane (who turned 35) and Square. Neither of those losses represent a blow to the defense.
Justin Jones improved slightly from his rookie to his sophomore year, but he’ll need to take a bigger leap in his third year. The former third-round pick out of N.C. State has not been very impressive thus far.
As for Tillery, he was the #28 overall pick from the 2019 draft. It’s too early to call him a bust, but ranking dead last among all DLs can hardly be viewed as a successful season. He posted two sacks, but was awful against the run.
The Chargers hope to boost the position with the acquisition of Linval Joseph. The 10-year veteran received high marks from 2015 to 2017, but his play deteriorated a little bit in the past two years. Granted, he still ranked as the 42nd-best interior defenders out of 114 guys last year. He’ll be playing his age-32 campaign, so hopefully his play won’t drop even further.
3.2 Defensive Ends (DEs) / Edge Rushers (ED)
Joey Bosa and Melvin Ingram are the team’s clear-cut sack leaders. They recorded 11.5 and 7 sacks respectively last year, while the third-best turned out to be just 2.5 by Desmond King. Ouch.
Bosa is a beast. Plain and simple. Bosa had 10.5, 12.5, 5.5 and 11.5 sacks during his first four years in the NFL. The 5.5 sacks picked up in 2018 were obtained in seven games; if you project those numbers into a full 16-game season, that equates to 12.5. As can be seen, he’s been very consistent.
Ingram’s sack output has decreased a little bit recently. After posting 10.5, 8.0 and 10.5 from 2015 to 2017, he got exactly 7 sacks in each of the last two years. He remains clearly an above-average edge rusher and likely has a gas left in the tank at 31 years old.
Uchenna Nwosu will continue to be a rotational player in this defense. He played 37% of the snaps and the former second-rounder has 5.5 sacks in two years.
3.3 Linebackers (LBs)
Thomas Davis provided quality play, especially coming from a 36-year-old linebacker. The team still decided to cut ties with him in order to create cap space and to get younger at the position.
The team has three guys who all played between 37% and 39% of the snaps last year: Drue Tranquill, Kyzir White and Denzel Perryman.
Tranquill was picked in the 4th round of last year’s draft and he enjoyed a very respectable rookie season. He ended up as the #25 LB out of 89 players, based on PFF marks. He is a good candidate to improve his game since he converted from safety to linebacker just three years ago.
White is another former fourth-rounder, but he was taken a year earlier. He has earned 65.6 and 66.6 PFF grades in his first two seasons. His 2019 grade is actually identical to Tranquill’s.
Perryman is unlikely to become a full-time starter in the NFL. He has yet to establish himself as a true starter in five years, so all signs point towards the former second-rounder to end up no more than a reserve player.
The Chargers have added two pieces to the group: free agent Nick Vigil and Kenneth Murray via the draft.
Vigil is no better than what the Chargers already had. As a matter of fact, he has earned weaker marks. He will still get a shot at the starting lineup considering his experience.
With the 23rd overall selection, the Chargers drafted Kenneth Murray out of Oklahoma. The kid plays with great passion and he started at middle linebacker with the Sooners at 17 years old, which is quite impressive!
Murray can literally fly on the field; he’s a playmakers who’s willing to take some risks. His style leads to many tackles for a loss. He needs to get better at reading plays and shedding blockers, however.
3.4 Cornerbacks (CBs)
Casey Hayward is among the league’s top cover corners. He graded as the third-best CB in the NFL last season, according to PFF rankings. He has 22 interceptions in eight years and figures to have another productive season in 2020. He hasn’t missed a single game in six years!
Desmond King is most effective in the middle of the field as a slot corner. Strangely enough, the Chargers signed Chris Harris, formerly of the Broncos, who also butters his bread in that position. It remains to be seen how to team juggles with these two guys. Both received above-average grades despite subpar years compared to previous seasons.
How does Michael Davis fit in the mix? He could be the odd man out. He did pick up his first two interceptions of his young career after signing as an undrafted free agent in 2017, but he wasn’t particularly good.
3.5 Safeties (S)
Derwin James missed the first 11 games last season. His presence was sorely missed on the field. The #17 overall pick from the 2018 draft enjoyed a spectacular rookie season with 105 tackles, 3 interceptions and 3.5 sacks. Now with a clean bill of health, James projects to play a big role in 2020.
The other starting safety is Rayshawn Jenkins. He’s not nearly as good as his fellow teammate. He racked up the first three picks of his career last year, but he only managed to obtain the 60th spot among 87 safeties, according to PFF grades. He has yet to have a big impact, and he’s unlikely to do.
The team lost some nice depth when Adrian Phillips left for New England. The #3 safety will likely be either Roderic Teamer or sixth-round pick Alohi Gilman. You don’t want either of them to start, so the Chargers must cross their fingers that neither James nor Jenkins gets hurt.
2020 VS 2019 DEFENSE
How will the 2020 Chargers defense fare compared to the 2019’s group?
The team upgraded the interior of the line a little bit with the addition of Linval Joseph.
Tackle leader Thomas Davis is gone, while the organization acquired Nick Vigil and drafted Kenneth Murray. Vigil isn’t a solid linebacker, so Chargers fans must hope for Murray to develop quickly, or perhaps see Drue Tranquill elevate his game.
Getting Chris Harris at corner is another good, albeit not spectacular, addition to the team. However, losing Adrian Phillips will put the Chargers in trouble if one of their two starting safeties get hurt.
Los Angeles allowed the 14th fewest points in the league last year. I expect them to remain around this spot in 2020.
Final call (2020 vs 2019): Stable
4. Regular Season Wins
According to sportsbooks, the Los Angeles Chargers are expected to win 8 games this season. Should we bet the “over” or the “under”?
Here is the methodology I used in order to answer this vital question:
- Use BetOnline.ag’s point spreads on all 256 regular season games.
- Convert those point spreads into win probabilities.
- Simulate each of the 256 games, according to those win probabilities, via the R statistical software.
- Repeat the previous step one million times (you get 1M simulated seasons).
- Count the proportion of seasons where the Chargers won more or less than 8 games.
Here are the results:
Tip: Bet UNDER 8 wins Return On Investment (ROI)
| ||Estimated Probability ||Sportsbook ||Odds ||ROI |
|OVER 8 WINS ||42.6% ||Bookmaker.eu ||-107 ||-17.6% |
|UNDER 8 WINS ||57.4% ||Heritage Sports ||-105 ||+12.1% |
: +12.1% Rank
: 23rd-highest ROI out of 32 teams Minimum odds required to bet (i.e. ROI = 0%)
Here are BetOnline’s point spreads for the Chargers’ 16 regular season games:
- HOME: -2.5 vs ATL, -6.5 vs CAR, -5 vs DEN, -7 vs JAX, +7 vs KC, +4.5 vs LV, 0 vs NE, -4 vs NYJ.
- ROAD: +5 @ BUF, -3 @ CIN, +2 @ DEN, +11 @ KC, +2 @ LV, 0 @ MIA, +9 @ NO, +6.5 @ TB.
Note: The “Best odds” from the table above were obtained after looking at 13 well-known online sportsbooks on May 18th, 2020.
Thank you for reading!
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