Summary;
from Race Selection 1 post
Although
betfair markets are highly efficient – a proven fact, there is underlying bias
which is a strong indicator of where value may lie.
- No relationship between Value and market position.
- fav-Longshot bias underpinned by backers
inclination to avoid favorites and chase long price little hopers.
- Bookmakers reinforce this with the over round of
market distributed strongly towards higher priced runners.
- Backers fail to fully discriminate between
different race types and the probabilities at the top of the market.
- Value can be buried in the top of the market as a
result. Often shifted away from the favorite when it is odds on. The weight of
money into odds on favs in these races negates the bias.
- Small anomalies in preparation and performance
change results. The single race is characterized by uncertainty rather than
cause to effect.
Although
the value perspective is essential to maintain a long term profit, in the short
term it becomes almost meaningless – in fact more often than not an excuse to
avoid presenting evidence of an edge from sufficient sized samples.
I
prefer to search long term datastreams and seek out events holding up 80% probabilities.
This drives down the volatility factor which is the killer even most pros
stumble over eventually.
No
speculation on value race to race, rather the acid test of a hard nosed edge calculation
at a high Strike rate dropping out of a large multi-season sample.
Race Selection Table:
Lets
just go back to the comparison between Novice chase returns and turf handicaps
in the previous post.
Work
through it again. Is the market fully reflecting the huge difference in the 1 /
2 / 3 return figures of 82% down to 57%
Or
the winning favorites dropping 43% down to 27%. Finally most importantly for
the Dutching bet that Uplift factor dropping from 68% to well below half at 41%
i.e.
of the races NOT won by the favorite 68 % are taken by the next two in the market in novice chases, falling away to only 41% in the turf handicaps.
Tremendous spread of probabilities?
Table of Race Types sorted High to Low on Uplift Factor
My
next step is to optimize the return equation. Again I favour target the long term Return on capital – not the time absent ROI calc.
The
equation is the trade of between velocity (no: of bets over time) and the
Expected gain on each bet placed.
How
to maximize, balance risk and reward. What’s the point of maintaining a huge
return on investment if the opportunities are filtered out and there is only
one bet placed per week/month? Velocity means re-using the same capital.
Velocity
x Ev.
There are known knowns.
These are things we know that we know.
There are known unknowns.
That is to say, there are things that we know we don't know.
But there are also unknown unknowns.
There are things we don't know we don't know.
If you're expecting to make long term money out of racing Donald's "villains epitaph" is as good a starting consideration as you could come up with when trying to balance out risk, reward and survival in the battle against probable short term outcomes from the race track.
