Useful Concepts

[traynor]

http://edition.cnn.com/2015/04/21/opinions/costello-america-fat/index.html

One might easily substitute "being a loser at horse race betting" for "being fat" and realize the basic problem is the acceptance of an essentially harmful state because it is perceived to be "normal."

Beware of those who encourage self-destructive behavior. Especially those who define it as "perfectly normal." It is a combination that many seem all too willing to embrace, thus freeing themselves from any motivation to alter or improve their self-destructive behaviors.

[thaskalos]

It is pleasant to eat anything you want, and unpleasant to follow dietary guidelines. It's as simple as that. People are fully aware of the fact that they are fat...they don't need anybody to tell them. They just lack the will-power to do anything about it.

My father was a lifelong smoker...and so were his two brothers, and his best friend and neighbor. They all knew that smoking was ruining their health, and had all made half-hearted attempts to quit, but they would all return to smoking in short order. "Smoking was the toughest thing to give up"...my father used to tell me. And then, on a lazy Wednesday afternoon, my father had a heart attack, and died before he could be transferred to a hospital. He was 65 years old, with a 9 year-old daughter still responsible for. As a result of his untimely death, not only did his two brothers and best friend quit smoking instantly, but they also started meeting regularly for jogging sessions around the block. With my memory's eye, I can still see the image of three Greeks, all in their early 60s, running around the block, with their legs completely covered up by the long tube socks which they would roll all the way up to their shorts. Final result...all three are still alive today, as they approach 90 years of age. One might say that my father had to die...in order for those three to live full lives...and fully enjoy their families.

Nothing motivates like a good scare.

[traynor]

It is pleasant to eat anything you want, and unpleasant to follow dietary guidelines. It's as simple as that. People are fully aware of the fact that they are fat...they don't need anybody to tell them. They just lack the will-power to do anything about it.

My father was a lifelong smoker...and so were his two brothers, and his best friend and neighbor. They all knew that smoking was ruining their health, and had all made half-hearted attempts to quit, but they would all return to smoking in short order. "Smoking was the toughest thing to give up"...my father used to tell me. And then, on a lazy Wednesday afternoon, my father had a heart attack, and died before he could be transferred to a hospital. He was 65 years old, with a 9 year-old daughter still responsible for. As a result of his untimely death, not only did his two brothers and best friend quit smoking instantly, but they also started meeting regularly for jogging sessions around the block. With my memory's eye, I can still see the image of three Greeks, all in their early 60s, running around the block, with their legs completely covered up by the long tube socks which they would roll all the way up to their shorts. Final result...all three are still alive today, as they approach 90 years of age. One might say that my father had to die...in order for those three to live full lives...and fully enjoy their families.

Nothing motivates like a good scare.

People are social animals. (Most of them, anyway.) "Social learning" is acquired from what those around you believe to be true (or "normal"). People with specific subsets of ideas that are generally unacceptable in society at large tend to gravitate to others of "like mind." Handicappers hang out with other "race analysts" to avoid that, "Oh ... you play the ponies, huh?" (at which point the speaker stops processing any further information because he or she has now pigeon-holed the "race analyst").

The easy/difficult reasoning doesn't fly because Scandinavia (for example) has the same generic brand of humanity, but obesity (as well as losing for years while betting on horse races) is simply unacceptable. No long, convoluted rationalizations are necessary--it is just unacceptable. Specifically, in both case (with near-zero exceptions) it is considered an inappropriate, anti-social, self-destructive behavior. On a par with "recreational drugs" and paying for sex.

Before too much time has passed, you might consider packing it in, biting the bullet, and taking your son on an extended vacation to Sweden and Denmark. LOTS of races. Lots of casinos. Pretty much guaranteed to give both of you a fresh, new perspective on how much fun one can have just being alive on this little dirt ball. Just don't try convincing anyone at a Swedish racetrack that he or she should consider losing for years as necessary "paying the dues" to enable one to win consistently. That is likely to be a VERY hard sell.

[thaskalos]

People are social animals. (Most of them, anyway.) "Social learning" is acquired from what those around you believe to be true (or "normal"). People with specific subsets of ideas that are generally unacceptable in society at large tend to gravitate to others of "like mind." Handicappers hang out with other "race analysts" to avoid that, "Oh ... you play the ponies, huh?" (at which point the speaker stops processing any further information because he or she has now pigeon-holed the "race analyst").

The easy/difficult reasoning doesn't fly because Scandinavia (for example) has the same generic brand of humanity, but obesity (as well as losing for years while betting on horse races) is simply unacceptable. No long, convoluted rationalizations are necessary--it is just unacceptable. Specifically, in both case (with near-zero exceptions) it is considered an inappropriate, anti-social, self-destructive behavior. On a par with "recreational drugs" and paying for sex.

Before too much time has passed, you might consider packing it in, biting the bullet, and taking your son on an extended vacation to Sweden and Denmark. LOTS of races. Lots of casinos. Pretty much guaranteed to give both of you a fresh, new perspective on how much fun one can have just being alive on this little dirt ball. Just don't try convincing anyone at a Swedish racetrack that he or she should consider losing for years as necessary "paying the dues" to enable one to win consistently. That is likely to be a VERY hard sell.
I never try to convince anyone of anything...nor would I suggest that anyone else follow in my footsteps in this game. I was a loser for many years, yes...but for me, that's how it had to be. I was young, highly opinionated, and very stubborn when I started gambling...and those qualities do not often add up to quick gambling riches. In retrospect, a prolonged stroke of beginner's luck which came my way didn't help matters any either.

I think you got me all wrong...I don't consider years of losing to be a prerequisite to gambling success. It just works out that way for some of us...who are too stubborn for our own good. If a gambler can get to the promised land without the years of losing...then I am all for it. :ThmbUp:

[traynor]

I never try to convince anyone of anything...nor would I suggest that anyone else follow in my footsteps in this game. I was a loser for many years, yes...but for me, that's how it had to be. I was young, highly opinionated, and very stubborn when I started gambling...and those qualities do not often add up to quick gambling riches. In retrospect, a prolonged stroke of beginner's luck which came my way didn't help matters any either.

I think you got me all wrong...I don't consider years of losing to be a prerequisite to gambling success. It just works out that way for some of us...who are too stubborn for our own good. If a gambler can get to the promised land without the years of losing...then I am all for it. :ThmbUp:

I think it boils down to motivation. Winning creates motivation to win more. Losing (for most people) extinguishes any desire to repeat what should be (for most people) an unpleasant experience.

I can think of few more dismal experiences than "having sufficient assets" to continue losing--rather than being highly motivated to focus on winning because, as General Giap mentioned about the Viet Nam War, "Losing was not an option."

Betting horse races is a LOT like hunting. One needs to hunt while hungry to learn what hunting is all about. I learned to play blackjack by taking lessons from Lawrence Revere on a number of occasions--paid for with what I could scrimp together from part-time work (and save by hitchhiking a thousand or so miles to Vegas instead of taking a bus each time). I consider the experience and circumstances at least as valuable as Revere's teaching. My starting "blackjack bankroll" was an unemployment check. It was sufficient.

[thaskalos]

I think it boils down to motivation. Winning creates motivation to win more. Losing (for most people) extinguishes any desire to repeat what should be (for most people) an unpleasant experience.

I can think of few more dismal experiences than "having sufficient assets" to continue losing--rather than being highly motivated to focus on winning because, as General Giap mentioned about the Viet Nam War, "Losing was not an option."

Betting horse races is a LOT like hunting. One needs to hunt while hungry to learn what hunting is all about. I learned to play blackjack by taking lessons from Lawrence Revere on a number of occasions--paid for with what I could scrimp together from part-time work (and save by hitchhiking a thousand or so miles to Vegas instead of taking a bus each time). I consider the experience and circumstances at least as valuable as Revere's teaching. My starting "blackjack bankroll" was an unemployment check. It was sufficient.
I don't know, traynor...it all sounds contradictory to me. On the one hand, there is the advice of approaching gambling as if losing were not an option...like the Oriental general who would instruct his men to burn their boats once they arrived at the enemy's shore. But on the other hand, we have the advice of gambling only with money that we could afford to lose...which indicates that losing is indeed a very realistic option. It takes someone much wiser than I to figure out which is the better advice, but I, at this stage of my life, favor erring on the side of caution.

[traynor]

I don't know, traynor...it all sounds contradictory to me. On the one hand, there is the advice of approaching gambling as if losing were not an option...like the Oriental general who would instruct his men to burn their boats once they arrived at the enemy's shore. But on the other hand, we have the advice of gambling only with money that we could afford to lose...which indicates that losing is indeed a very realistic option. It takes someone much wiser than I to figure out which is the better advice, but I, at this stage of my life, favor erring on the side of caution.

I think burning the ships is a bit extreme. Perhaps we have different definitions of "losing." Sometimes losing a battle enables a war to be won. It is the end goal--winning the war--that matters. Individual battles, like individual bets, are simply part of a process. My premise is that becoming enamored of the individual battles as ends in themselves deteriorates one's ability to conduct one's activities--at all times--from the perspective of winning the war as the only desirable outcome.

"Gambling only with money we can afford to lose" is an absolute masterpiece of conditioning. Especially disguised as "sound advice." It helps to frame all gambling as "play" or "recreation." It is not. Gambling--approached with profit as the end goal--is considerably more like war than "play."

Consider the 1967 Six-Day War: Egypt was apparently playing (and that only half-heartedly), believing it's own propaganda. Israel apparently decided that losing was not an option. (I think that may have been the origin of the phrase, "Denial is more than a river in Egypt.") I also think a serious bettor would be better advised to study the Israeli approach to warfare in that situation than that of Egypt. And apply that approach to wagering, rather than, "gambling only with resources (and lives) they can afford to lose."

[Robert Goren]

Gambling is not the same as fighting a war.

[LottaKash]

It is somewhat axiomatic in the field of psychology, that basically, there are two main things that motivate the actions, or the inactions, of most people...

And they are: Pain & Pleasure...

In the scheme & grind of life, very loosely put, most people spend their time either running to the Pleasurable things, or away from the Painful things...

And so it is with gamblers as well, or should I rather say players here....

Once a person comes to grips with the reality of the pain & pleasure thing, he will, or at least should have, a much better understanding of why he plays the game to begin with....For most, that takes a whole bunch of soul-searching tho...

[Robert Fischer]

In these markets you have the house, a bunch of sheep, a few gamblers who will be lucky in the short-term, and a few wolves.

The house starts by taking 15-25% of all the money each bet. That leaves a few lucky people and a few wolves to try to take the 75-85% that is left from the sheep.

That's how it looks on a relatively macro scale.


On the micro scale you have an individual, and he sees the game and he's been to Scandinavia, and he's seen the skinny blonde women, and he thinks he can bet into these pools and be one of the wolves and take some of that 75-85%. He perhaps plays on paper to try it out, and almost certainly he assesses the situation and decides that the amount of skill and study needed is not proportional to the difficulty level, or maybe he himself is lucky enough to encounter an elite teacher who shows him how to make a living. Then he sends for Ingrid.


Then there's the paradox If everyone was a rational thinking individual as in our micro scale example, the market itself would cease to exist.
The market needs some sheep, and it needs some guys who derive their excitement from the psychological effects of the market itself, and some guys who treat the game as a form of costly entertainment, and some guys who are into the full-figured women.

[traynor]

"Not all data are created equally, and it turns out we constantly decide which bits of information are better than other bits. We gravitate to the point of view that fits what we’re thinking already, and ignore evidence that might challenge our assumptions about what makes sense and what doesn’t.
CEOs aren’t the only ones subject to this way of thinking. That old expression that people hear and see what they want to believe is truer than you might think."
http://www.bbc.com/capital/story/20150422-why-we-only-see-what-we-want-to

Limited (restricted) cognition is one of the greatest hindrances to wagering profitably. The tendency is to trade "comfortable thinking" for "uncomfortable thinking"--the state in which one both realizes and accepts that he or she is nowhere near as clever and knowledgeable as she or he believes himself or herself to be.

[traynor]

It is somewhat axiomatic in the field of psychology, that basically, there are two main things that motivate the actions, or the inactions, of most people...

And they are: Pain & Pleasure...

In the scheme & grind of life, very loosely put, most people spend their time either running to the Pleasurable things, or away from the Painful things...

And so it is with gamblers as well, or should I rather say players here....

Once a person comes to grips with the reality of the pain & pleasure thing, he will, or at least should have, a much better understanding of why he plays the game to begin with....For most, that takes a whole bunch of soul-searching tho...

As Festinger and others have established, the greatest "pain" for many is cognitive dissonance--the avoidance of which is most readily achieved by a fictitious "interpretation" of external reality. That is, by convincing one's self that the world is the way it is convenient for them to believe it is, rather than the way it actually is.

The same mindset (and subjective interpretation of reality) creates the "pleasure" of being right--even when they are wrong.

[traynor]

In these markets you have the house, a bunch of sheep, a few gamblers who will be lucky in the short-term, and a few wolves.

The house starts by taking 15-25% of all the money each bet. That leaves a few lucky people and a few wolves to try to take the 75-85% that is left from the sheep.

That's how it looks on a relatively macro scale.


On the micro scale you have an individual, and he sees the game and he's been to Scandinavia, and he's seen the skinny blonde women, and he thinks he can bet into these pools and be one of the wolves and take some of that 75-85%. He perhaps plays on paper to try it out, and almost certainly he assesses the situation and decides that the amount of skill and study needed is not proportional to the difficulty level, or maybe he himself is lucky enough to encounter an elite teacher who shows him how to make a living. Then he sends for Ingrid.


Then there's the paradox If everyone was a rational thinking individual as in our micro scale example, the market itself would cease to exist.
The market needs some sheep, and it needs some guys who derive their excitement from the psychological effects of the market itself, and some guys who treat the game as a form of costly entertainment, and some guys who are into the full-figured women.

Reality is that most bettors in Scandinavia--like most bettors in the US and Canada, and to a lesser extent, most bettors in the UK and Australia--are betting based on a limited set of basically flawed premises. There is a long way between the demarcation lines of "available profit" and "onerous takeout."

The easiest way to avoid acknowledgement of one's own inadequacies is by declaring some activity so incredibly difficult and complex that no one (except possibly "well-funded whales" with a staff of quants and a PhD manager) can earn a profit.

Just like any other business, the idea is not to emulate what those who flood the field are already doing--it is to find a profitable niche that is underexploited by the existing participants.

BTW, skinny blonde women are not the majority in Scandinavia. I don't know the percentages offhand, but most I have seen tend toward dark brown as the most prevalent hair color. And "athletic" as the most prevalent body type, rather than "skinny."

[traynor]

Gambling is not the same as fighting a war.

That depends on the stakes. Similarly, the "competition" in martial arts (or business) cannot be equated to fighting a war (or even serious individual conflict), yet many believe it to be so.

[Robert Fischer]

Reality is that most bettors in Scandinavia--like most bettors in the US and Canada, and to a lesser extent, most bettors in the UK and Australia--are betting based on a limited set of basically flawed premises. There is a long way between the demarcation lines of "available profit" and "onerous takeout."

The easiest way to avoid acknowledgement of one's own inadequacies is by declaring some activity so incredibly difficult and complex that no one (except possibly "well-funded whales" with a staff of quants and a PhD manager) can earn a profit.

Just like any other business, the idea is not to emulate what those who flood the field are already doing--it is to find a profitable niche that is underexploited by the existing participants.

BTW, skinny blonde women are not the majority in Scandinavia. I don't know the percentages offhand, but most I have seen tend toward dark brown as the most prevalent hair color. And "athletic" as the most prevalent body type, rather than "skinny."

I'm trying to lighten up the topic w/ a bit of humor (and apparently haven't been doing a very good job of it). ;)



The easiest way to avoid acknowledgement of one's own inadequacies is by declaring some activity so incredibly difficult and complex that no one (except possibly "well-funded whales" with a staff of quants and a PhD manager) can earn a profit.

While this is certainly true, and is also a common coping mechanism within the horseplaying population, I am speaking of the game as seen by a potential investor. An outsider with no commitment bias.

If you are able to obtain the insight, there is some money to be made. I would think that other markets would be more fruitful, and demand a less dominant market position from an investor.

[traynor]

Side note: Anyone seriously considering idyllic retirement (or extended vacationing) in Scandinavia had better have ample resources already, or be adroit enough at handicapping/wagering to fund major expenses. The upside is that if one is wagering on a professional basis (IRS definition), at least a portion may be considered "business-related expenses."

The advantage is that many bettors believe (to their detriment) that all the information they need to win spews out of computers. In western Europe, as well as in South America and Australia, the edge goes to the trip handicappers and people handicappers. Computers are nice for bookkeeping and note keeping, but expecting an endless stream of winners to be produced by massaging a few simple numbers with a computer is a peculiar belief prevalent primarily in North America.

[traynor]

Do not misinterpret what I write as simplistic bad-mouthing of current "knowledge" of handicapping strategies and tactics. What I suggest is that other areas, other processes, other ways of thinking about the available data and information, offer ample opportunities for bettors seeking profit.

The difficulties of profitable wagering are largely interwoven with convention--as long as one insists on doing what everyone else is doing, his or her results will be similar to what everyone else is getting. And almost everyone else is losing.

[thaskalos]

Do not misinterpret what I write as simplistic bad-mouthing of current "knowledge" of handicapping strategies and tactics. What I suggest is that other areas, other processes, other ways of thinking about the available data and information, offer ample opportunities for bettors seeking profit.

The difficulties of profitable wagering are largely interwoven with convention--as long as one insists on doing what everyone else is doing, his or her results will be similar to what everyone else is getting. And almost everyone else is losing.
I had a feeling that this would end up being a handicapping discussion, and wondered why you posted it in the off-topics.

We may know what the majority of the players in this game are doing, but the tote board represents dollars and not players...and we don't know what type of thinking drives the majority of the betting. It could be that the archaic handicapping methods of the past, which are still embraced by the majority of the bettors, only account for a minority of the betting action generated...while the "enlightened" thinking of the present, although shared by the small minority, is responsible for the majority of the betting action that we see.

If this is indeed the case...then how are we to interpret your advice to not do what "everybody else is doing"?