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Old 01-13-2011, 06:57 PM   #11
McCarron7000
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Quote:
Originally Posted by BJennet View Post
Hi Houndog,

No offense, but I think this piece conveys the opposite of the way that Soros' intended his concepts to be used. Specifically, it's aimed at reminding his colleagues and competitors on Wall St., where people use highly sophisticated and often very effective models to predict financial performance, that their models are limited by the kind of flaws that are endemic to human judgement - reflexivity. As one of the greatest investors of our time, he's sending a message that even he makes mistakes - and thus is extremely careful and conservative in his own decision-making. Given the context, he's not saying 'the crowd is dumb, but you're smart'. He's saying, 'Realize that you're just as dumb as the rest of the crowd.' Like the brilliant Nassim Taleb, whose 'Black Swan' preaches a similar message, and might be of interest to you, he's the opposite of a motivational speaker.

Soros' point that the equilibrium model is imperfect is true, but that didn't stop William Benter from making hundereds of millions of dollars using one, nor does it hamper his proteges, or others users of databases from making huge profits today. The crucial point you seem to miss, is that one doesn't need a perfect model to win, just a better one (software of mental) than your opponents.

And as Benter pointed out, your mutuel-pool competitors may be limited as individual bettors, but as a group the 'wisdom of crowds' kicks in and makes them a very tough collective opponent. This is why 99+% of all horseplayers are losers. This is also very much Soros' point.

I agree that the term 'overlay' is basically meaningless, but the term 'value' is not, even if it's often misused. The only thing that matters, in this regard, is whether or not one is playing with a long-term edge - if not, one is never receiving value, if so, every horse is an overlay, i.e. has value.

Re practical application, you mentioning checking the final odds of the horse you guage as the most likely winner. What does this mean? If you don't care about value, what's the point of checking the odds? Why worry about how low the odds are? You contradict your whole argument.

In fact, the people who profit from this game are those who have the most precise and accurate idea of what the true odds on each horse should be, and thus know best when they have an edge, and how big that edge is. But that can only be determined through long-term research, Something you never mention.

Cheers,

B. Jennet
I'm the author of the piece in question and appreciate the comments and critcism.

To answer a few of your points, which are well taken, let me first say that the roughly 1,500 word limit doesn't allow for the type of depth necessary to adequately convey and reinforce certain concepts.

As far as the delineation between value and overlay are concerned, you have an apt point. I do believe there is a very (very) small percentage of the horseplaying world that is truly capable of creating a value line and exploiting that relationship in a meaningful way to be profitable. This is likely the result of decades of study and reserved for only the best of the best.

Please keep in mind, the article was not written for an advanced audience (say for example, members of a Sartin Methodology forum), but rather a typical horseplayer that gets force-fed terms such as value in a horribly erroneus context on a regular basis. They are rarely challenged with anything other than the same recycled concepts, many of which are utterly useless and entirely DRF and Beyer fig centric in nature. This was intended to provoke thought on a different level, whether or not the reader agrees or disagrees with the content.

My methodology as it relates to the 10:1 qualifier is based on several years of pouring over my individual results bet by bet and coming to the conclusion that is where I can optimize my play. Do I always conform to this? No. However, without setting strict guidelines based on my historical performance, I'd be much less disciplined as a horseplayer and would be much more likely to repeat past transgressions.

Last edited by McCarron7000; 01-13-2011 at 07:01 PM.
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Old 01-14-2011, 08:07 PM   #12
BJennet
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Quote:
Originally Posted by McCarron7000 View Post
I'm the author of the piece in question and appreciate the comments and critcism.

To answer a few of your points, which are well taken, let me first say that the roughly 1,500 word limit doesn't allow for the type of depth necessary to adequately convey and reinforce certain concepts.

As far as the delineation between value and overlay are concerned, you have an apt point. I do believe there is a very (very) small percentage of the horseplaying world that is truly capable of creating a value line and exploiting that relationship in a meaningful way to be profitable. This is likely the result of decades of study and reserved for only the best of the best.

Please keep in mind, the article was not written for an advanced audience (say for example, members of a Sartin Methodology forum), but rather a typical horseplayer that gets force-fed terms such as value in a horribly erroneus context on a regular basis. They are rarely challenged with anything other than the same recycled concepts, many of which are utterly useless and entirely DRF and Beyer fig centric in nature. This was intended to provoke thought on a different level, whether or not the reader agrees or disagrees with the content.

My methodology as it relates to the 10:1 qualifier is based on several years of pouring over my individual results bet by bet and coming to the conclusion that is where I can optimize my play. Do I always conform to this? No. However, without setting strict guidelines based on my historical performance, I'd be much less disciplined as a horseplayer and would be much more likely to repeat past transgressions.
Hi Mr. Dinkin (if I have the correct name)

I'm glad to see you were not offended by my comments. For me, the most important aspect of your piece was in revealing the concept of the 'overlay', as, in fact, chimerical. My basic criticism centered around the lack of practical application for the concept of 'reflexivity', and a certain vagueness about your own handicapping, although you're obviously very successful. However, you did clarify the latter with your comments about your research on your own hit rate for longshots, which I agree is essential.

But just to disagree somewhat with the notion of the impossibility of creating a value line you express here. First, it's certainly true that relatively few players have the understanding or willingness to put in the work to create an accurate line. However doing so requires only a month or so with a piece of handicapping software - not decades of research. Second, winning play doesn't require a line with this kind of mathematical precision. I have known long-term winners who simply have an instinctive sense of the true probability of their choices vs. the public line and can profit accordingly. It sounds like you may be this kind of player.

But regardless of whether one is using software to create an accurate line, or simply has an instinctive sense of one, every winning player, everyone playing with a long-term edge, must, by definition have the ability to find value.

Cheers,

lansdale
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Old 01-24-2011, 06:32 PM   #13
BJennet
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Quote:
Originally Posted by Ted Craven View Post
Thanks Houndog, and thanks to Jerod Dinkin for posting his article on the HTR site. (I saw it there and printed it out and have been watching some of George Soros' videos on reflexivity since). I think it definitely relates to the notion we know as 'wagercapping', and speaks a lot to what I observe as 'ambivalence' in Doc Sartin's writings on the subject of value (check his recurring remarks about 'the value boys').

Unless you are a whale operation and dutching half the field to break-even and make 8-10% ROI in rebates, the horse still has to win in order to be truly an overlay.

I want to discuss further, but I want to think more first.

Ted
Hi Ted,

I missed this post at first, but I think it's worth making a couple of points: one, that Doc Sartin had a fairly limited grasp of probability and statistics that explains the somewhat rambling and contradictory nature of his comments on the subject of 'value', and that the development of 'wagercapping' itself is an acknowledgment of the truth of what the 'value boys', most prominently Dick Mitchell, had been nudging him toward for some time - that he had to take mutuel price into consideration by providing some kind of baseline probability for the performance of his methodology. Surely Doc was right about the concept of an 'overlay' being meaningless, but it's extremely disingenuous to then describe every winner that way.

I believe that one of the most confusing aspects of handicapping and probability for the majority of players (those not using a database) is that they believe that they understand why they won or lost a race. This is never true. At best, they player can only assess probabilities based on their (or their method's) past performance. If your one-horse win rate is, say .30, this means that you're still going to lose .70 of your races. The accuracy of your assessment of the correct winning probability vs. the public is the measure of your performance.

What wagercapping has to do with 'reflexivity', which most people in the investment community have found to be a uselessly vague concept beyond the obvious notion of being cautious, is somewhat mysterious. Possibly you can clarify. I think it would be helpful if the probabilities generated by the BL/BL, which are far from accurate being set to a 130% line, were brought slightly closer to reality. For newer users, I would suggest that simply doubling the probabilities should help, although YMMV.

Hope this doesn't sound too negative, Ted, but these are very tough times for handicappers, as you know, and we can use all the help we can get.

Cheers,

B Jennet
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Old 01-26-2011, 04:22 PM   #14
Ted Craven
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I spent a fair amount of time watching videos and reading articles and transcripts by George Soros about his 'reflexivity' concept. In the end, I got as much a summation of its relevance to handicapping and wagering from a few lines in Jerod Dinkin's article as I did from Soros (no poor reflection on him: he's a well spoken philosopher/investor and not a horse-racing specialist), so thanks again, Jerod!

The key observation for me is: in events comprising 'thinking participants' (e.g. people wagering on the outcome of a horse race, people trading stocks, commodities and other financial instruments) - all decisions are made with uncertain and imperfect understanding, thus stock pricing and oddslines are subjective guesses, estimates, and not facts. And these imperfect guesses cause feedback-loops by causing other individuals to respond (by placing bets or avoiding bets) which in turn cause other bettors to reassess their oddslines and their betting actions, etc, etc. It's a chaotic, noisy, messy storm of opinions, actions, counter-actions and modified opinions right up until the bell rings (and after...). And, filled with plenty of odds pricing and guessing mistakes: that's why most horses don't pay between EVEN and 3/2.

You may decide a horse is worth 5-1 and bet it at 6-1, but your own bet (what to speak of the bets of others, either independent of your actions, or in response to your actions) can cause the odds on the horse to go below 5-1, in which case you never would have bet it to start with (and neither would some others in response). Reflexivity; uncertainty; feedback loop.

I've never been able to appreciate the usefulness per-se of the Betting-Line oddsline in any of Doc Sartin's software and I believe he put it in there (the Bottom Line/Betting Line readout) as a 'get off my back' type response to those who nagged him about 'how could you omit such a fundamental aspect of wager decision making - you're not serious'. As it stands, the Betting Line is nowhere close to a 100% or even 120% oddsline because it isn't designed for that purpose (as far as I can understand).

Houndog's original post wondered about the applicability of reflexivity and uncertainty in pre race odds estimation to Sartin's concept of 'wagercapping'. Wagercapping (in my understanding, and sometimes application) involves using your key readouts (e.g. BL/BL), potentially hiding a Top 3 ranked horse having below certain cut-off odds (e.g. 5/2, 2-1) if you have to, then selecting 2 horses from among the remaining Top 3 such that the net odds (and resulting average mutuel) relative to your historical hit rate from doing so, at least breaks even (and presumably better). The keys to making a go of this approach are:

1) reliable readouts which identify horses with excellent chances to win the race (properly selected pacelines, omitted non-win-contenders due to form) - e.g. BL/BL, V/DC,
2) either acceptance of M/L odds as proxies for post-time odds, or waiting until close enough to post-time that you know the odds on your horse(s) won't drop unacceptably,
3) either, insight into when a top ranked low odds horse is the real thing, then to single it or pass that race, OR an emotional equanimity and good records to comfort you when you bet against that top ranked horse in favour of 2 of your next 3 ranked, and it wins anyway.

Wagercapping is not (in my understanding) about taking your 3rd ranked horse at 3-1 on the BL and betting it because it pays at 9/2, or your top ranked horse at 9/5 BL because it pays 5/2 (or both). It is about working with your ratings, composing a bet usually with 2 horses (or perhaps, equally, WP on 1 horse, or W on 1 horse and P on another, etc) such that your net odds (and resulting mutuel) if the lower paying one hits the percentage of the time your records shows it does, combined with the net odds of your higher paying one at its recorded hit rate - will result in a positive ROI over a number of events (e.g. a cycle of 20 bets). And everything is quite imperfect - final odds fluctuate from when you bet, your historical records on hit rate, average mutuel and factor ranking by mutuel (e.g. the traditional 'Wager Decision Form' showing mutuels by BL/BL tier) may fluctuate significantly cycle to cycle, track to track, distance structure to surface, etc - and your knowledge from bet to bet about how low a net mutuel you can accept can be imprecise (and likely a total crap-shoot and mere gambling if you have no records to consult).

I have tried to apply wagercapping (again, as I understand it) for years, and in general often had rather dissatisfying (read: emotionally trying) results. As often as I'd pat myself on the back for 'hiding' the Top BL/BL horse at 2-1 or 6/5 and cashing in on either a 9/2 or 8-1 of my 2 other bets, I would lose my entire bet when that Top ranked 'hidden' horse won. I tried to develop measurements of when to accept the Top ranked horse at face value: 2 points gap on BL, lone VDC #1, lone Early, best Late in a field of challenged Earlies, top 2 betting odds, etc. Sometimes it worked, sometimes it didn't. Maybe I missed something.

The past year or so, I have arrived at a betting practice which respects some things I have observed about myself, and which fits with my longer term goals:

1) I hate to lose money,
2) I feel worse about losing money than I feel great about winning money (see point #1),
3) I want to bet a lot of races and significant money (always relative to my bankroll size, hit rate and advantage - i.e. some flavour of Kelly) and earn good rebates for every bet.

To that end, and perhaps accepting that times have changed since Doc penned his immortal studies and theories, I now never 'hide' any horse from my screen, and consider a 2 horse bet if I can get 3/2 on the low side (i.e. minimum $5 payout for $4 bet, or 25% ROI on that event) and at least 3-1 on the high side (i.e. minimum $8 payout for $4 bet, or 100%). In this, I find myself focusing on the horse and its ranks first, and on odds second. My betting records tell me my choice of 2 horses to win-bet result in a winning wager about 50% of the time on average (though including some wild swings), which is the end result of paceline selection, recency and condition requirements, class of competition, performance in the paceline selected, a few factor readouts, odds ranks from the tote board, and to a certain extent a factor decision model. Most of the time, my odds focus is knowing whether I'll get my 3/2 minimum (and that, for a buffer against sometimes dropping below EVEN after I bet) or more specifically what my low to high range of payouts might be, then passing when I don't like the components of the range. I am now more happy betting a 3/2 and a 3-1, or a 2-1 and a 5-1, and never say no when offered a pair of 3's. Around 8-1 or so, I like to split my wager WP on one of the horses (again, I hate to lose money, and I want to bet frequently and collect rebates). Occasionally I will single my top horse at EVEN odds. Quite simply put, there are many more horses below 3-1 than there used to be, so either we have to get accurate enough to play with this distribution of odds, or play less, waiting for higher odds events. The difference between these two stances is a psychological/emotional one and depends on one's objectives in participating in racing (i.e. casual enjoyment/stimulation versus significant return on capital deployed, requiring betting either more events or higher units - not saying the latter objective cannot also be both enjoyable and stimulating).

But I never spend any time worrying whether I got my oddsline right on my top 3 or 4 horses. I worry about whether my paceline selection is consistent, whether I have reasonably assessed a horse's current form, whether there is too much unknown or unknowable about a given race. I appreciate that when anyone waits for 10-1 (on presumably their top few horses) they buy a lot of room for error but presumably bet less (in the straight pools). And you don't have to worry overly about an accurate oddsline, whatever that is, given how much is subjective and unknowable in race analysis: most horses win at less than 10-1, so it's an easy way of betting 'overlays' - though I appreciate that the skill required to both find them and wait for them is considerable and to be applauded.

Here's a relevant and interesting recent thought by Dick Schmidt (http://www.paceadvantage.com/forum/s...1&postcount=11)

Quote:
Originally Posted by Dick Schmidt
I have a solution to this problem that is extremely effective and extremely unpopular: don't look. Make your bets without reference to the odds or morning line, then go on to work the next race. Don't watch the odds move, don't watch the race, don't check the results or payoffs until you are done for the day. Spend your time handicapping and then entering the outcome into a good record keeping program when the day is done. So long as your bankroll is larger at the end of the day, no single race, or any group of races matters. Put your time and mental effort where it actually pays off, not watching dumb animals run around or listening to the opinions of other dumb animals betting on them.

I told you that you wouldn't like it, but it is how most professionals play.
So reflexivity = uncertainty = feedback influence when thinking (including crowd/herd responsive) participants are involved. Markets are not efficient, pricing errors (odds mis-estimations) happen EVERY day. That's as much as I understand about reflexivity and wagercapping so far. But always ready to learn more! If anyone has alternate interpretations of what Doc Sartin meant by 'wagercapping', I'm all eyes and ears.

Any and all feedback appreciated.

cheers,

Ted
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Last edited by Ted Craven; 01-27-2011 at 02:12 PM. Reason: spelling, clarity
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Old 01-26-2011, 06:44 PM   #15
alydar_ David
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Well written, Ted. You've provided some gristle to chew on.
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Old 02-07-2011, 03:05 PM   #16
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Hi,
New to this forum
Was a member of the old DRF community and posted selections for a few years until they closed it - but enjoying the PAIHL contest on Paceadvantage ( some real good handicappers from all over the net competing for about 4 months )
- the scorer and contest organizer is super duper

on the first day of the contest there was a 30-1 at GP that won; and i believe 10 out of the 50 teams had it, my team fluked the x

i am definitely a longshot player - how i find value is learn how to pick them

probably my best angle is an adjusted speed fig - you guys know "key-race" theory?
"key-race" tabulating is alot of work and somehow I developed a very accurate speed fig on the shoulders of key race theory - which freed up alot of work

w/ these speed figs there are alot of overlays cuz alot of published figs don't acknowledge how a horse got from point A to point B; they just measure how long it took

being a fig player i've also learned alot of their weaknesses, and alot about the Universiality of the game; it's amazing how trainers do the same things over and over, for the last 70 years!

form, not as tactile as a speed fig, but just as important

OK, so now U know I'm a value player; and I love the originator of this thread: I too have never understood the need for a value/odds line

if u see a horse is by far the best aren't you going to use him?
why do u need a value line to determine if a bet is worthy?
it makes it seem value-line betting is more about economics than handicapping - it's intelligent, but how relevant

sometimes U have to take 3-1 if it looks like all systems go

the most important aspect of value-line handicapping is the amount of work that goes into creating a line; i have so much work to do evaluating competiton i'm not really concerned w/ "i'm getting fair value" - in this game we try and find niches where we create our own value, through horizontal exotics for example

anyways, i'm sure someone will take me to task

fffastt
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Old 02-17-2011, 06:26 PM   #17
Whosonfirst
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Quote:
Originally Posted by RAMON201 View Post
I agree with you 100%. I never bet on any favorite. I never make an 'odds line' or even think about the 'take out' . This I view as a 'TOTAL WASTE OF MY TIME' , finding a horse that I think can win the race and pay me what I consider is a 'fair price' ( over 4/1 at the post ) is all I think about. I could care less that others get caught up in thinking about ' making an odds-line' and looking for 'value' as if they can 'by magic' bet the 'overlay' and it will produce a positive ROI. There are enough distractions in handicapping let alone 'creating more' because some 'misguided ' people tell you so. I also love the double digit horses and for me its worth the wait. My top payoff in win betting was $126.00 and thats extreme but it happens. The $30-$40 horses are out there if you look. So make your 'odds-line and bitch about the take-out' and I'll be looking for the ' money in my pocket' horses.
Ramon, I agree with everything you're saying. You have to pick a winner and then get a fair price. Too much mental masturbation for me to make some artificial odds line to get value. My problem doing this professionally is developing the patience and discipline to only accept odds that will pay double digits. At this moment, I'll still take 5/2 minimum, even though I know the probability that I can't make a long term profit at these odds. Self discipline is the hardest thing about betting the horses, IMO. My first step in honing that skill has been to pass races.
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Old 02-18-2011, 07:50 PM   #18
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Self discipline is the hardest thing about betting the horses, IMO. My first step in honing that skill has been to pass races.
FWIW, I have found it easier to pass races in the simulcasting era and play from home era, as I usually download 2-3 tracks I intend to review and cherry pick amongst them. If there is a lull of a couple of hours or so, since I am playing from home I can easily find other things to do. For me, it is harder to pass races when at the track or otb and very hard if I am only considering one track.

Jim
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Old 02-19-2011, 12:34 PM   #19
Whosonfirst
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FWIW, I have found it easier to pass races in the simulcasting era and play from home era, as I usually download 2-3 tracks I intend to review and cherry pick amongst them. If there is a lull of a couple of hours or so, since I am playing from home I can easily find other things to do. For me, it is harder to pass races when at the track or otb and very hard if I am only considering one track.

Jim
I agree totally. Sometimes I go to OTB for a change, or just to get away from the computer.
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Old 02-19-2011, 02:47 PM   #20
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Hi

I have to say with the environment we are all subjected to daily it certainly hard to say no or pass or what ever. I 've passed and wished I didn't but hey this is what it's all about picking your strengths and weaknesses.

I am very new to this and have learned a lot and made notes for my self and it has helped my therapy a lot.
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