As a guy who writes a column about horseracing, I suppose this means I should be waxing poetic about 2011 Kentucky Derby winner Animal Kingdom, or singing the praises of Breeders’ Cup Classic champ Drosselymeyer, or getting misty-eyed over the accomplishments of claimer extraordinaire Rapid Redux.
Well, sorry, but I’m not a look-in-the-rear-view-mirror kind of guy… which could explain the honking horns and screeching tires I hear on a regular basis while driving.
Honestly, though, I just don’t see the point of contemplating what was when what is holds so much promise and intrigue. Hence, today’s column will focus on what lies ahead, not what lies behind.
Personally, I think 2012 is going to be a fantastic year.
One of the reasons — perhaps the biggest reason — I say this is because, in 2012, I will make a serious attempt to become a better bettor… and I hope some of you will join me in this quest.
It hardly takes the insight of Nostradamus to realize that many people lose money at the races not because they’re lousy handicappers, but rather, because they’re lousy bettors. And this phenomenon is not confined to the Sport of Kings. In “Trade Your Way to Financial Freedom,” Dr. Van Tharp, the book’s author, references a study that stock trader Ralph Vince conducted with forty doctorates.
“They started with $1,000 and were given 100 trials in a game in which they would win 60 percent of the time,” Tharp explained. “When they won, they won the amount of money they risked in that trial. When they lost, they lost the amount of money they risked for that trial.
“Guess how many of the Ph.Ds had made money at the end of 100 trials?” Tharp asked.
The answer was two.
Two… that’s fewer winners than one would expect to see at a taping of the “Jerry Springer Show.” True, none of the doctors chosen had a background in math or statistics (for shame) and I’m not sure exactly how the trials were conducted, but the results are still pretty eye-opening.
Keep in mind: Vince’s game had a positive expectation of 20 percent. Yet, 38 highly-educated people managed to turn black ink into red ink. So what do you think the results would have been in a game like horseracing that has a negative expectation of 15-20 percent?
Naturally, Tharp, being a doctor himself, felt compelled to name this tendency to turn a positive expectation into a negative outcome in speculative endeavors. He called it the “gambler’s fallacy,” which he defined as the belief (shared by many, I'm afraid) that one is “due” for good or bad fortune based on previous results.
Of course, the goofiness of this belief should be evident to anyone who is not a cast member of the “Jersey Shore.” If I flip a fair coin six times and get six heads in a row, it does not mean that my chances of getting tails will improve on the next flip. In fact, the percentage of getting either a heads or a tails stays the same — 50 percent — regardless of the prior results.
Still, even though most people know this, psychologically there is a tendency to get more conservative during lucky streaks and more aggressive during losing streaks. In both cases the logic is the same: this can’t go on. Unfortunately for those who think that way — and I shamefully plead guilty — the streak can and often does go on… and on… and on.
Thus, the real key to sound money management is to treat every investment opportunity the same way. This doesn’t mean that one can’t stake different amounts depending on the odds/expected return — provided there is data to support such a strategy, go for it — but it does mean that one “good” bet is the same as the next.
There is no such thing as being “due,” no mortal locks, no lucky/unlucky breaks that are destined to “even out.”
With that said, I present my betting/investment plan for 2012:
1) Flat 5-10 percent win wager on every play that meets my fair odds, including qualified Win Factor Report “Prime Overlays” and “Key Selections.”
2) 5-10 percent show wagers on alternate contenders when there is a negative show pool and a dubious favorite.
3) An option to use 1-2 percent of the allotted win money to play exactas (provided the odds are well above what I deem fair).
So, with renewed vigor and optimism thanks to a solid wagering strategy, let’s take a look at some races this weekend…
Weekend Win Factor Plays
COMMENTS: I wanted to highlight this race because it illustrates the difference between playing cheap claiming races and other, more prestigious affairs. Simply put, MINED is the best horse. What’s more, new trainer Samuel Breaux is three-of-four with horses dropping in class immediately after being claimed… but that’s where the positives end. Mined has dropped in class in each of his last four starts, yet hasn’t won any of them. Worse, he’s hung in each of his last two tries — finishing third at even odds on Nov. 2 and second as the 3-5 choice on Nov. 25.
He hasn’t worked since that last race and figures to be a prohibitive favorite again today; could be worth playing against. I’ll be using him on top of exactas with 2, 3, 4 and 10 and I’ll bet the 2, 3, 4 and 10 to win at odds of 9-1 or greater (whichever ones qualify).
COMMENTS: This is another race featuring a morning line favorite that could be an underlay. Sure, NOBLE GRACE looks good in this spot, but: A) She’s never raced beyond seven furlongs and is bred to sprint; and B) Since 2005, trainer Gary DeLong is 0-for-12 with horses making their route debut. Hence, I’ll be boxing 5 with 1, 6, 7 and 8 in an exacta — or two — and I’ll bet the 1, 6, 7 and 8 to win at their fair odds or greater (I’m using 9-2 as the adjusted fair price for 1-Oh Golly Ms Molly).
COMMENTS: Tough race, but I think ALSVID deserves to be favored.
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