The Wiseguy Weekly: Hedging

Hedging is a term that stock brokers and mutual fund managers throw around like candy at a parade. When you hedge you focus on the absolute return and being profitable overall.

Serious sports betters incorporate hedging strategies when wagering on occasion also. The goal is to cut losses and guarantee at least minimum winnings. In the long run, math always wins, so hedging is a very smart tactical maneuver. Now little Beavers, gather around the campfire and I'll tell you a story and give you some scenarios on when and why you should hedge.

It was 1997 and I was in Las Vegas for March Madness. Watching four basketball games at the same time while having action on all of the large television screens is a rush that cannot be explained in words. Myself and a buddy known as "Short" played the sportsbook for the first and second rounds of the college basketball tournament like it was heaven in hell. We gazed at the numbers on the big board at 3:00 a.m. just to kill time and save a night's lodging.

The Stardust was the venue that hosted jokers from South Carolina, Oregon, California, and wherever else. We read the magazines and newspapers, talked to the locals, and broke down every game over and over. One guy will always stick in my head. I recall asking him what he did for a living and his answer was, "I'm in the accounting business." Upon further investigation of his "accounting business" he divulged that he never bet on WAZZU because he was an alumni and knew the program too well.  Plus, if he lost he would be heartbroken.

We talked more about our plays and I told him I only needed one more game to win a three game parlay. He instantly said, "you should hedge and bet a little bit on the third team to lose. You see, that way you are a guaranteed winner, though minimal."  I just was frozen in thought thinking that maybe I wanted to do this full time. Was it my calling?!  I am still working on that part...

The hedge tactic is versatile and can be used on future bets as well. Let's say you had Texas at the start of the season to win the National Championship at 6-1 odds, with a $100 wager. The Longhorms make it to the championship game and you have a chance to win $600.  Instead of risking the loss of $100, you bet on their opponent to cover the spread in the game, $330 to win $300. If Texas wins you are still up $270, if their opponent (USC?) wins you are still up $200. It's a no lose situation in this case with the hedge. You just guaranteed yourself a profit.

Like I said last week, it's all about money management. I like to call gaming "high risk investments." Why should sports bettor be scum, while Mr. Stockbroker in New York City, who is also hedging, be called a businessman? Anyways, the key is to treat the endeavor as entertainment. Do not make plays without a thought process. Never bet on a team from Eugene. And never play for the sake of playing. If you don't feel like working, do you work?

Next week, Bleeda will give you his week one "locks," in Pac-10, Top 20, and random play. The best part of it all, it's free!  My blood is orange, my beliefs are eccentric, and my passion has ration...you just have to trust me. :-)  You can bleed dat!

You can read "The Wiseguy Weekly" every Thursday on BeaverFootball.com.  BeavaBleeda can reached at beavableeda@beaverfootball.com.


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