Race Selection 2

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.

Donald Rumsfeld

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.