Vegas vs Wall Street
Is Betting on MLB Baseball: Safer Bet Than Wallstreet?
George Moyer began his professional career at the age of 23 where he serviced as a financial analyst for a major bank in the North East. Over the course of 29 years George has worked for several Fortune 500 companies where he has worked for banks, insurance companies, security firms and other business helping these companies or their clients make investment decisions. By 2003 George was ready for a change, George made a career adjustment and decided to help out long time friend and legendary sports handicapper Alex Meyers. George spent the next two years learning a completely different industry in sports handicapping. While a completely different industry, George quickly realized how his knowledge of wall street and big data could easily be used to make the same profit margins betting on sports. And if it could help him rekindle his life-long love of baseball, what could be better?
The result was an odyssey into the world of high-stakes sports gambling that brought George to Las Vegas to test his central theory: that risk analysis and a data-heavy model could accurately predict which Major League Baseball teams would be most successful and produce returns that match or beat the very best investment products and hedge funds.
We recently sat down with George to get his thoughts on sports gambling and opinions on sports betting as a secondary investment strategy. The following conversation has been edited for length and clarity.
VerifiedCappers: George your picks history shows pretty intriguing results [59%% in 2016 and 57% in 2017]. How do you continue to show 12–14% type returns for your players?
George Moyer: The point spreads are generated by a group of humans in Vegas, anytime humans are involved there are errors. The purpose of the point spread is to split the betting action 50/50, and this has more to do with public betting behavior than actually handicapping the matchup. If a sports bettor can identify those 2–3 games every day with value and is disciplined enough to only bet the high percentage plays then you are going to win over the long run.
VerifiedCappers: You do go into some level of detail on how you used Capfox Software Systems to project both player and team outcomes and bet on both season-long over/under win totals and individual games?
George Moyer: The CapFox Software System is the foundation for all of the Cap Fox daily selections, and is a derivative software program of StatTrak using the following statistics of value ratings and performance ratings.
VerifiedCappers: Your returns have been on par or better than even the top echelon of highly-regarded hedge funds, do you think data-based gambling on baseball could be a new alternative asset class?
George Moyer: I did it with $1 million and maybe could have done it with three or five times as much, but there isn’t a big enough market for anything more. Sports analytics as an alternative asset is appealing, but there isn’t enough capacity for it to scale right now. Vegas could expand the market, but they would need to do business a little more like Wall Street.
VerifiedCappers: What do you mean by that?
George Moyer: The analogy is poker — Vegas should just look at how much poker expanded and their role there is collecting rent. Attract these guys [sports gamblers] by matching them up with people who want to take the other side of the trade, and take a percentage for doing it.
VerifiedCappers: What do you think the attitude toward that idea is from the sportsbooks?
George Moyer: Vegas has been unbelievably unresponsive to the idea that this could be a growth business for them. One thing Wall Street does well is know your customer. With a given hedge fund client, we knew exactly what their style was and could match them with people on the other side of the trade. We’d bring customers who were smarter than us together because we knew what they wanted.
What I found in Vegas was like trading the Nasdaq when I first walked on to a trading desk at Lehman Brothers in 1995: every customer is viewed with suspicion.
I wasn’t looking for comps and free stuff, but when I bet heavy and moved the line on a game it would frustrate me when two hours later the line had moved back. That meant they found someone else to take the other side; I would have appreciated a call to let me know I could put more money to work on my side. Increasing competition — either from online gambling or other states — is all the more reason to establish the market right now.
VerifiedCappers: What have you learned from betting on baseball that you think could be applied to Wall Street?
George Moyer: Even though the entire MLB is worth less than a single investment bank [he’s right — Forbes’ 2013 valuations put the value of all 30 teams at $22.3 billion, up 22.8% from a year ago; by comparison the likes of Morgan Stanley and Goldman Sachs carry market values in the neighborhood of $40 billion and $70 billion] I think it does a better job of valuing employees than financial services.
VerifiedCappers: How so?
George Moyer: Sabermetrics in baseball allows employers to pay for skill sets and not get confused by results. You don’t pay for the pitcher with the most wins and lowest ERA last season, you pay the guy with the best strikeout-to-walk ratio because that’s more indicative of the future. Pay for skill sets and results will follow. The financial industry is focused solely on results, but it’s awash in data and should leverage it.
VerifiedCappers: That focus on results helped lead to the 2008 financial crisis. You were at Lehman when it went down, what are your memories of that time?
George Moyer: Until I ran a trading desk at Lehman I never thought about the consequences of leverage. Even at 25-to-1 — and Lehman’s was higher — a 4% underperformance of assets versus liabilities makes you insolvent.
I believe [former Lehman CEO] Dick Fuld was responsible [for the firm’s collapse] and he should take that shame to his New York Times obituary, but I also found a lot of tough-guy charm in Dick. At the time the company was spun out of American Express AXP +0.04% it needed that, but later it needed someone who would have understood the perils of that leverage.
I remember in May 2008 when Dick got on a conference call, during the time when [short seller David] Einhorn was attacking the firm, and he said “we got our leverage down to 25-to-1,” like it was a big success. That’s when I knew it was over.
VerifiedCappers: So why have you been able to be so successful betting on sports when so many fail?
George Moyer: It’s all about the numbers, and being better at understanding the numbers than the Average Joe. Over the past decade I have automated my process with a custom software I termed the Capfox Software System to help me quickly and easily zero in on a handful of daily games with the best odds.
VerifiedCappers: So how do you compare the returns of investing in funds to the returns realized by sports betting?
George Moyer: No doubt that sports betting can beat the annual returns of any investment portfolio, while some years betting on Wall Street may produce some big returns of 12–14%, I have found that year after year there is simply less volatility in sports betting and much more predictable in the terms of what you can control versus what the markets dictate.
For more information on George Moyer and his highly touted sports betting systems, you can visit http://www.Capfox.com
