Author Archive

Applying Peta’s Wagering Methodology in 2020

For those unfamiliar with Joe Peta’s groundbreaking 2013 book Trading Bases, the author is a successful financial analyst and former Wall Street trader. Seriously injured in a traffic accident, Peta’s long and painful recovery included employing his professional skills to develop a baseball wagering methodology. His book is about more than that though, including observations about the 2008 economic meltdown and sports wagering writ large. Peta’s anecdotes alone make it worth the read — imagine being hit by a NYC ambulance and then being billed by the city for the ride to the hospital.

At its highest level, the Peta methodology is based on the utilization of a team’s previous season performance adjusted for cluster luck (a regression of OBP/SLG/ISO to arrive at “hits per run”) and WAR, as well as upcoming-season projected WAR. Arriving at an estimate of a team’s season win total, it is then used to identify and capitalize on inefficiencies between the model’s estimates and wagering lines.

Peta’s work produces two products: a season-long projection of wins (the long game) and the ability to handicap individual games through adjustments to each team’s lineup, starting pitcher, and home field. While conceptually straightforward, it is time-consuming to operate, requiring familiarity with Excel (particularly the ability to link sheets). In lieu of Peta’s regression calculation of cluster luck, I utilized FanGraphs’ calculation of BaseRuns, convinced of its utility as a proxy after reading a 2019 article at arguing it was one of a number of comparable and readily available such calculations. Read the rest of this entry »