As you recall, the figure below shows my results through March 1st for 2008-09 basketball season.
I used disheartening above because when I did the time series analysis I came up with this:
Type Coef SECoef T P
AR 1 0.9712 0.0158 61.46 0.000
Constant 0.0645 0.1481 0.44 0.664
Mean 2.235 5.133
Basically, what that means is that my results are a random walk. The AR1 coefficient is the coefficient of the serial correlation term with p-value 0.000 and the constant is not significant (with p-value 0.664). Note that the coefficient is near 1. If it were exactly 1, it would be a true random walk. This pattern is one that is destined to fail over time. It's even been called gambler's ruin.
And in general, we're not even playing a fair game because of juice.
This result has many names: the level-crossing phenomenon, recurrence or the gambler's ruin. The reason for the last name is as follows: if you are a gambler with a finite amount of money playing a fair game against a bank with an infinite amount of money, you will surely lose.
This graph shows the results from 2008-09 college football.
The time series analysis for this sucks even worse.
Type Coef SE Coef T P
AR 1 0.9382 0.0300 31.26 0.000
Constant -0.8430 0.1800 -4.68 0.000
Mean -13.636 2.912
In this particular example, the AR1 term is a bit farther away from 1, meaning it is likely not a random walk, but the constant term is negative. That means I am a loser when it comes to college football, at least in 2008-09. Not that I had any inclination of that from the sidebar.
The next figure shows my NCAAF results with the first two weeks left out. One of the things that I've considered is that contrarian gambling early in the season is not profitable. ML has told me stories about Squeeky cleaning up in college football early in a season, 2004 or 2005, I believe. However, I have not had any luck whatsoever. This graph doesn't necessarily support that hypothesis, but it is fair to say that I never got out of the hole I dug myself the first two weeks.
These results are much more indicative of what I want to see. With a coefficient of AR1 around 0.84 and positive constant, I am showing NCAAF to be profitable for 2008-09 after Week 2.
Type Coef SE Coef T P
AR 1 0.8451 0.0445 18.99 0.000
Constant 1.0931 0.1816 6.02 0.000
Mean 7.056 1.173
Whew. At least, debatably, I'm not completely retarded. That said, when I look at the first differences, the p-value of AR1 is not statistically significant, so it is still possible that results are a random walk.
I'm not even going to look at the last two NFL seasons, since I readily admit I have no skill in that sport.
I'm not entirely sure what to make of these results, other than I have not been gambling skillfully in 2008-09. More questions and suggestions are always welcome in the comments.
In part two of this post, which will run Friday at 6PM, I'll look into my 2007-08 results.