Newbury Gold Cup Metting
The Newbury Gold Cup is one of my favourite horse races of the year.
This particular horse race is just up the road from me in Newbury and it often trades well.
I have fond memories of this time of year for two reasons. The first reason is the Gold Cup meeting has always been interesting meeting for me is that I’ve always enjoyed it and I’ve been long-term profitable in this market. It’s often just about the correct type of race for me to trade.
But the second reason is because of what I did with Betfair many years ago. Back in 2006 and 2007, Betfair actually went around financial market exhibitions and pitched the Betfair concept to people, and it worked beautifully well.
My first public talk about Betfair trading
To understand how it happened, this was a period when I was still in the early part of my career as a full-time professional Betfair trader.
Back then, I still did a weekly column for Shares magazine. Part of the reason for doing that was when I first started trading on Betfair, I had no idea if it would work or now or for how long. So, excuse the pun; I was hedging my bets a bit by writing a weekly column and getting paid for it.
That led to me going out and doing some of the talks that Shares magazine would do. Now and again, they would go out and do an event where they’d invite loads of people in and people like me would stand up and talk to everybody about our specialist subject. There were exhibits and so on, you get the picture.
Eventually, I went up to them and said to them, why don’t I talk about trading on betting exchanges? Because it’s new, it’s exciting and it will fall right into the mix of this. Because I’d come from the writing or all about financial markets and I was now trading on sports, I could join the two together.
Bet Angel didn’t exist when I started trading
I was slightly nervous because the concept was so alien.
I’ve always faced scepticism throughout my entire career, even now when I’ve done so much work and have a really long well-documented track record. But back then nobody even knew about the Betfair betting exchange, let alone traded sports markets. So I had to have a one-liner that would grab people’s attention.
I would generally say to people, you know, this is this stock market for sports. The first time I talked about the trading opportunity on betting exchanges was in 2004. The very first one I did was, curiously, in Clitheroe, Lancashire.
People from financial markets got it straight away, especially when you’re talking to existing day traders. They understood precisely what was going on, and they’d ask all sorts of questions about volatility, risk and time to expiry and all those things. I could actually dovetail it really nicely into that.
When I first started doing this back in 2004, the interesting thing was that I would actually demonstrate using the Betfair web site and other rudimentary software, because Bet Angel did not exist at that time.
Bet Angel only came out of my frustration at not being able to do the things that I wanted to do and eventually I started to integrate that into my presentations. The person I chose to work with to create Bet Angel came out of one of those early talks. It’s funny how things like that happen, isn’t it?
When Betfair had an education team
Back then Betfair had a marketing budget, and part of that was an education team. I suggested that they could actually go to a fully-fledged investor / financial market trade show to demonstrate the concept of trading on the exchange.
So they took the opportunity to take their show on the road!
If I remember correctly. We did Active Investor, IX Investor the World Money Show, Active Investor and the Invest shows. I was even invited to Barcelona to do a talk, where I met up and struck up an ongoing dialogue with the then-unknown, Paulo Rebelo.
It was funny to go to these shows because everybody was expecting stock or equity derivative trading services and stuff like that. And they’re in the middle of these stands was Betfair. It just didn’t look right.
Generally speaking, that’s the response that we would get.
You are not welcome here; it’s just Gambling
I remember the first show that we did. People would come along and ask, what are you doing here? You know, you’re just gambling. We don’t want you here. Or words to that effect.
I would say, “Well actually, it’s not gambling but yes, it is. If you back a horse…….” Why don’t you stop and listen for a few seconds and just let me explain what I’m talking about?
But it was clear that people didn’t really get the concept at that particular time. Lots of people still don’t!
Why I started trading live
After a few exhibitions, we figured out that the stand would fill up if we talked about the concept during one of the speaker slots. Before the speaker slot, it was tumbleweed. No speaker slot meant all-day tumbleweed.
So when we had this opportunity to do a speaker pitch on a Saturday and at a decent exhibition, my thoughts were mixed. I’d love to do that, but there is no economic payoff. Saturdays have always been where I make most of my money each week and giving one up was sacrilege. I’d never get enough from new business to cover a Saturday off.
I was in turmoil because I really wanted to trade the Hennessy Gold Cup. But obviously, it would be a great opportunity to talk to those people and support Betfair. So we devised a plan. I would do the speaker slot but then return to the stand and trade while somebody else could field the questions.
Doing a speaker slot and trading live turned out to be a very potent mix.
This was because if you sat there actually doing it, people can say. “I recognise that it looks very familiar to me” and the penny started to drop. Hold on, that’s not the dollar or oil or an equity. It can’t be because it’s a Saturday? So what market you’re trading? I just said, it’s the quarter past three at Newbury.
Suddenly people are sort of going, oh, wow, you know, what’s this? How does this work? So it actually worked really well. I’ll never forget that Saturday when we had those big races on because I actually managed to get the best of both worlds.
The problem with trading live
I managed to talk about the concept and go through various things with people in terms of how it was similar to financial markets. But it was tough to shoehorn that into a trade every ten minutes, so I actually ended up dropping the minor races to do a show and tell on the concept.
You also had this problem that when people saw you ‘printing money’ in front of their eyes, the questions start coming in thick and fast. Therefore it was difficult to do a full-blooded session because, as you will know, if you have traded these markets, it can be really intense sometimes. Trying to talk over a trade, slows you down, and sometimes you’d break away and then suddenly get swamped.
But the satisfaction of pulling off an excellent trade in front of all these people in that environment was just one of the best feelings I ever had.
In these early years, I’d envisaged that Betfair would be just like any other financial market and that, in fact, we would be heading in that direction and not, you know, back towards bookmaker and sportsbooks and stuff like that.
It was just like such a leap forward and one that could be embraced by a whole number of people.
I was keen to do more of these types of events. But in the following years, no budget was allocated to any events. Eventually, the education team was dismantled, and all events just halted.
I can look back now and reflect on those times as invigorating and exciting, but they only really lasted for a couple of years. Since then, nothing similar has happened, and in reality, my activity is so much bigger now that Saturdays would be even more of a strain than before.
The financial market sector was ripe for education and was full of people who would pump liquidity into the markets and know how to trade. You didn’t need to tell these people how they should be trading; they knew already.
The premium charge pretty much ultimately killed off that entire customer base. No such charge exists in financial markets, and this, along with the push to the punter end of the scale, killed any realistic chance of reaching these people.
I think that’s a shame because our message came across so loud and clear when we actually did a talk about it.
But when it comes to this time of year, I always remember it because it was great fun. It’s very difficult to trade the feature race today without remembering about doing it live in front of a whole range of people.
So that’s why this race is special to me.