Why aren't there racing "investment" funds?

[Cesario!]

As the subject says, why hasn't the mutual fund industry developed this sort of product? Is it for ethical reasons, or does it say something about the long-term profitability of playing the races?

I don't necessarily want start a debate on whether it's possible to beat the races. Instead, I'm just wondering why guys on Wall Street aren't looking for racing overlays for customers.

[Overlay]

That reminds me of an old Bob and Ray routine where Ray is playing a financial analyst answering questions sent in by listeners. One question asks what the best investments are to stay ahead of inflation. Ray says, "I've done a good deal of research into the subject, and I've found that the best investments are a straight flush or four-of-a-kind. Either of those would yield a return of 400% in ten minutes, which is considerably more than most banks pay."

[Ponyplayr]

I found this a few weeks ago..Haven't had time to fully check it out.


http://finance.yahoo.com/q?s=GACFX

[K9Pup]

I found this a few weeks ago..Haven't had time to fully check it out.


http://finance.yahoo.com/q?s=GACFX

I believe this is a mutual fund that invests in gaming industry stocks. I think what Cesario is talking about is an "investment" group that actually plays races.

As for the later I don't think because a firm is good at investments means it would also be good at wagering races. In the old days there used to be syndicates that played pick 6s, etc. I assume some of them still exist.

[ryesteve]

I believe this is a mutual fund that invests in gaming industry stocks.
You're correct (even though their YTD performance looks like they've been investing at the craps table :D )

[ryesteve]

As the subject says, why hasn't the mutual fund industry developed this sort of product? Is it for ethical reasons, or does it say something about the long-term profitability of playing the races?

I don't necessarily want start a debate on whether it's possible to beat the races. Instead, I'm just wondering why guys on Wall Street aren't looking for racing overlays for customers.
The math doesn't work. If a mutual fund had, say $100 million in assets, how could they "invest" enough money to satisfy investors without completely killing the pools they bet into?

[Dave Schwartz]

Actually, there are a couple of investment funds that I am aware of. In fact, one of them has a poster on this board (which I shall not divulge).

The few that exist are all high-end funds - put in a lot of money (at least what most of us would call "a lot") and someone at the top makes the plays for a significant piece of the profit.

However, the majority of the offers for funds like this would make me want to put my money under a mattress.


Regards,
Dave Schwartz

[Valuist]

Fezzik has done the equivalent of this with sports betting.

http://www.answers.com/topic/steve-fezzik

If you scroll down, you can see how the "Fezzdaq" has performed relative to the Dow and Nasdaq.

[pic6vic]

How about trust. The person making the bets has cash and there is no paper trail. lets say he has a big hit and decides that wasn't the funds bet that was mine. No accountability and I believe no one would invest

[betovernetcapper]

I've heard about this kind of investment firm from time to time and it's always seemed to be a scam. The most recent I've heard of is

http://www.empowerisv.co.uk/EmpowerISV-Stolen_Money.htm

[Dave Schwartz]

This is from my very limited knowledge on the subject.


The catch-22 here is that the only ones anyone ever hears about are the scams.

The guys that are succeeding at it (at least the ones that I know of) are very quiet about it. The only way you get into such a group is to know someone who is in such a group. (Please do not take this as a lead-in to any referrals on my part because that isn't going to happen.)

Dave

[ryesteve]

The guys that are succeeding at it (at least the ones that I know of) are very quiet about it. The only way you get into such a group is to know someone who is in such a group.
I have to ask though, what's in it for them? If they're betting successfully, why get tangled up with the bankrolls of "investors"?

[Dave Schwartz]

I asked that question once of the one guy whom I am close enough to ask. (Please note that he plays out of a low six-figure bankroll.)

His response was something like I get ?? percent with no risk or tax exposure. It works for me.


Dave

[JustRalph]

ever think that the takeout might be so much that you can make more by just plain investing in the S and P ?

[Dave Schwartz]

Nope. Not as long as you can turn your BR 50+ times per year.

[shanta]

I have to ask though, what's in it for them? If they're betting successfully, why get tangled up with the bankrolls of "investors"?

I agree 100% Steve.

Why the heck would you deal with ANYONE and the accompanying headaches if you are a success. Makes absolutely no sense.

A real close friend put out " The Ohio Turf Report" for years. Also had a group of clients he "advised". He stopped a few years back and told me it wasn't worth the bullcrap involved dealing with personalities and egos.

He bets his own loot and goes about his business

Rich

[Cesario!]

ever think that the takeout might be so much that you can make more by just plain investing in the S and P ?


Nope. Not as long as you can turn your BR 50+ times per year.

The question, of course, is the risk/reward curve for churning the bankroll so much. Can you consistently make a profit or a small loss on such a large amount of money to get the rebate in an amount that will make the return that much greater than the S & P? And, is the added return worth this increased risk?

[Turfday]

Is the group you are aware of investing in various pools around the country or are they essentially a syndicate that plays large Pick Six carryovers?

If they invest in various pools other than big Pick Six carryovers, do they stick to tracks they know or it actually doesn't matter to them?

[traynor]

<snip>The few that exist are all high-end funds - put in a lot of money (at least what most of us would call "a lot") and someone at the top makes the plays for a significant piece of the profit.

However, the majority of the offers for funds like this would make me want to put my money under a mattress. Regards, Dave Schwartz <snip>

There are others. There are betting syndicates in which EVERYONE is an expert, no rookies allowed, no matter how much of mommy's or daddy's money they are willing to put up. Outside investment is not required, and offers zero leverage; if you can pick the winners, you can make whatever amount provides maximum ROI. In short, the ONLY reason for soliciting "additional investors" is if you are losing, or plan to shy with the cash at some opportune moment.

For the winning syndicates, the critical factor (and the major value) is in high-level group decison-making processes, not in soliciting "investors." If all you have to offer such a group is money, you are better off putting it into municipal bonds. (Or, if Ghosn condescends to show GM how to run a car company, put it into GM stock.)
Good Luck :)

[twindouble]

Limited partnerships can work playing the horses, it has for me over the years. I don't see any reason for avid players just investing into a "fund", the majority of us get a lot more out of racing doing it on our own or with close partners as I did.

Shared risk is nothing new, it can be just as important in horse racing as in any other industry or financial endeavor when there's limited capital available. The average player can't bring him or herself to except that fact and there's many reasons why that ignorance exists from individual to individual. Knowing how to determine the ideal partnerships is the key, like anything else. If you all want to discuss what to look for in partners I'll do so. It would also interesting what others here would think on the subject.

T.D.

[Dave Schwartz]

Bob,

Is the group you are aware of investing in various pools around the country or are they essentially a syndicate that plays large Pick Six carryovers?

If they invest in various pools other than big Pick Six carryovers, do they stick to tracks they know or it actually doesn't matter to them?


I do not have those kinds of specifics. I really know very little beyond their existence.

Dave

[traynor]

Limited partnerships can work playing the horses, it has for me over the years. I don't see any reason for avid players just investing into a "fund", the majority of us get a lot more out of racing doing it on our own or with close partners as I did.

Shared risk is nothing new, it can be just as important in horse racing as in any other industry or financial endeavor when there's limited capital available. The average player can't bring him or herself to except that fact and there's many reasons why that ignorance exists from individual to individual. Knowing how to determine the ideal partnerships is the key, like anything else. If you all want to discuss what to look for in partners I'll do so. It would also interesting what others here would think on the subject.

T.D.

I think the concept of "shared risk" may not be as useful as the concept of "shared wealth." It may be that group handicapping endeavors appeal most to those who fear losing, and hope to gain "strength" (and minimize his or her own risk) by joining a group. There are also some very human issues of responsibility; if an individual loses, it is his or her loss, if a group loses, the egos of the individual members can be preserved by attributing blame to the others in the group.

Murky human thought processes aside, it often works extremely well, if you have the right combination of members. Not necessarily in personal affinity, but in individual competency; in almost all cases, group decisions are more accurate, more predictive, and more "complete" (in the sense of considering relevant factors) than individual decisions. That is not "my opinion"; it is the result of an immense amount of research in a number of fields related to decision-making.

That does NOT mean that half a dozen railbirds getting together to chew the fat about the seventh at Belmont will necessarily pick the winner--there are too many group dynamics that may influence the decision. The most pernicious is that of group members hoping to curry favor with an assumed "group leader" by parroting the party line. Leaders should be facilitators, not decision drivers.

Lastly, any handicapping group that cannot start with something on the order of $100 "investment" by each member and run it into serious money in two weeks or less should seriously consider another field of endeavor. Bluntly, if your group can't build a betting fund from an initial $100 apiece, why would you think you can do it by starting with $20,000? The leverage comes from skill, not capital; all the capital you need is waiting to be picked up at the mutuel windows at Santa Anita and Belmont.
Good Luck :)

[twindouble]

I think the concept of "shared risk" may not be as useful as the concept of "shared wealth." It may be that group handicapping endeavors appeal most to those who fear losing, and hope to gain "strength" (and minimize his or her own risk) by joining a group. There are also some very human issues of responsibility; if an individual loses, it is his or her loss, if a group loses, the egos of the individual members can be preserved by attributing blame to the others in the group.

Murky human thought processes aside, it often works extremely well, if you have the right combination of members. Not necessarily in personal affinity, but in individual competency; in almost all cases, group decisions are more accurate, more predictive, and more "complete" (in the sense of considering relevant factors) than individual decisions. That is not "my opinion"; it is the result of an immense amount of research in a number of fields related to decision-making.

That does NOT mean that half a dozen railbirds getting together to chew the fat about the seventh at Belmont will necessarily pick the winner--there are too many group dynamics that may influence the decision. The most pernicious is that of group members hoping to curry favor with an assumed "group leader" by parroting the party line. Leaders should be facilitators, not decision drivers.

Lastly, any handicapping group that cannot start with something on the order of $100 "investment" by each member and run it into serious money in two weeks or less should seriously consider another field of endeavor. Bluntly, if your group can't build a betting fund from an initial $100 apiece, why would you think you can do it by starting with $20,000? The leverage comes from skill, not capital; all the capital you need is waiting to be picked up at the mutuel windows at Santa Anita and Belmont.
Good Luck :)

Hey I didn't say there's anything wrong with striking out on your own. Loners have just as much to hide as those that "team" up. As a matter of fact there's no way of knowing if a loner is any good at what he's doing. There's a hell of lot more to what I was talking about than hiding under someone's skirt as your first paragraph put it.

Nowhere did mention coming up with "$20,000", that's not how it's done. What the heck would the king handicapper want to do with others, he's secure enough with his huge bankroll anyway, not withstanding his incredible skills. The money like you say is just there for the taking, why share it.

Weather you are aware of it or not there's times when the right amount of investment can give a small group of good handicappers "gamblers" huge returns, by sharing the risk. Historically, that's how wealth in most cases are created. If you partner up with the wrong people that don't make the concept wrong, dumb,a place to hide or follow the leader. It's just a smart thing to do.

T.D.

[Robert Fischer]

There are some advantages to racing investment partnerships. The whole concept of partnerships can be as complex as the racing game itself.

The first time you "beat the races" you get very excited. First, the actual profit may be enough to live on, but is not necessarily a life-changing salary in and of itself. Then, the reality of the full(often overtime) hours involved, and the substantial set of business costs hits you. This is work.

Well-managed Partnerships can make the whole process more efficient. Time and Costs can be deferred among members. With added funds the system is not only multiplied to a degree, but can be diversified somewhat as well to add security. Disorganization, and in-fighting will ruin a group faster than a bad week.

An investment Fund is different, in that although there is probably a group running the machine, the investors are not handicappers. They are investing in the group's expertise. The Funds are sufficient to salary the expertise of the group, and to substantially multiply and diversify the system. The pitfalls include dependency on outside financing and increased responsibility. Other major problems can surface as well. For example as a win wager is increased (to a high enough extent), you begin to lose viable wager scenarios, starting with the smaller pools.

[traynor]

[/b]
<snip>
Nowhere did mention coming up with "$20,000", that's not how it's done. What the heck would the king handicapper want to do with others, he's secure enough with his huge bankroll anyway, not withstanding his incredible skills. The money like you say is just there for the taking, why share it.

Weather you are aware of it or not there's times when the right amount of investment can give a small group of good handicappers "gamblers" huge returns, by sharing the risk. Historically, that's how wealth in most cases are created. If you partner up with the wrong people that don't make the concept wrong, dumb,a place to hide or follow the leader. It's just a smart thing to do.
T.D.
<snip>

I don't know about king handicapper, but anytime someone offers to bet with your money, it is prudent to expect a fleecing. Regardless of the amounts involved.

I am unclear about why anyone would want to seek high returns and shared risks in a group (other than low self-esteem or lack of skill) or why you believe that "Historically, that's how wealth in most cases are created." If anything, the complete opposite is true.
Good Luck :)

[twindouble]

<snip>

I don't know about king handicapper, but anytime someone offers to bet with your money, it is prudent to expect a fleecing. Regardless of the amounts involved.

I am unclear about why anyone would want to seek high returns and shared risks in a group (other than low self-esteem or lack of skill) or why you believe that "Historically, that's how wealth in most cases are created." If anything, the complete opposite is true.
Good Luck :)

I can't believe you said that, I'll leave it at that.

[traynor]

[/b]

I can't believe you said that, I'll leave it at that.

Yup, I said that. The Great American Myth of a couple of people getting together and starting the next Microsoft, Apple, or IBM is just that--a myth. For every successful shoestring enterprise, there are a hundred failures. Of well-planned, fully capitalized start-ups, half fail by the end of the second year. That is business reality. The belief that wealth is created in such fashion keeps the poor chasing rainbows, and keeps the money right where it is--with those who already have it.
Good Luck :)

[twindouble]

Yup, I said that. The Great American Myth of a couple of people getting together and starting the next Microsoft, Apple, or IBM is just that--a myth. For every successful shoestring enterprise, there are a hundred failures. Of well-planned, fully capitalized start-ups, half fail by the end of the second year. That is business reality. The belief that wealth is created in such fashion keeps the poor chasing rainbows, and keeps the money right where it is--with those who already have it.
Good Luck :)

traynor, I don't want to get into class struggles, either you believe what I said or don't. That is, I've had very successful partnerships in playing the horses and I can't understand what low self esteem has to do with forming partnerships. I didn't pull these guys from a half way house, they were as confident as I was and still am today.

T.D.

[Cesario!]

An investment Fund is different, in that although there is probably a group running the machine, the investors are not handicappers. They are investing in the group's expertise. The Funds are sufficient to salary the expertise of the group, and to substantially multiply and diversify the system. The pitfalls include dependency on outside financing and increased responsibility. Other major problems can surface as well. For example as a win wager is increased (to a high enough extent), you begin to lose viable wager scenarios, starting with the smaller pools.

Robert --

Thanks for the response. Are you aware of any horse investment funds that are actually operating under this model -- as opposed to the shared risk "clubs" which have been discussed throughout this thread? Or are you just talking hypothetically?

Seth

[traynor]

traynor, I don't want to get into class struggles, either you believe what I said or don't. That is, I've had very successful partnerships in playing the horses and I can't understand what low self esteem has to do with forming partnerships. I didn't pull these guys from a half way house, they were as confident as I was and still am today.

T.D.

Not a class struggle at all. When expressed as a clear dichotomy, all black or all white, with no room for interpretation or digression--I don't believe what you said. The issue was not whether you personally have had successful betting partnerships; the issue was your statement about the creation of wealth. One of the great things about the United States is that everyone is entitled to an opinion, and the right to express it. I assure you, I respect your opinion, whether or not I agree with it.
Good Luck :)

[twindouble]

Not a class struggle at all. When expressed as a clear dichotomy, all black or all white, with no room for interpretation or digression--I don't believe what you said. The issue was not whether you personally have had successful betting partnerships; the issue was your statement about the creation of wealth. One of the great things about the United States is that everyone is entitled to an opinion, and the right to express it. I assure you, I respect your opinion, whether or not I agree with it.
Good Luck :)

Well, I said on another thread, "intelligent people agree to disagree." Might be a good subject for off topic.

Thanks,

T.D.

[podonne]

Good thread, but I think the point is getting lost by the assumption that there are only two outcomes; either you make 10% (where the increased risk is probably not worth it vs financial indexes) or 1000% (where you can make more money betting without the headache of investors. But what about a 20-30% return. Thats high enough to make the risk worthwhile but not enough that you can't make more money by pooling it (think investment fund).

Its especially interesting because a sophisticated computer handicapper can generate many of the same metrics (risk\reward\betas, etc...) that a managed investment fund can.

The challenge is finding a methodology that can generate consistent returns with a certain level of capital (think of a closed fund). In order to properly hedge a horse race, especially considering all the potential outcomes, you would need a significant level of capital for even the most common of races.

[alysheba88]

Makes more sense from a horse partnership/ownership point of view. Have publicly traded partnerships

[robert99]

An investment fund survives on public and institutional confidence in its image. Three out of four funds cannot beat a monkey's pick by throwing at a dartboard. However, the public is confused by jargon, fleeced by high commission costs and appealed to by greed. The fund uses a bit of jiggery pokery with factors, graphs and so on but basically cannot foretell the future any better than a novice. Almost none of the managers have ever worked in the industries invested in and never risk their own capital -only that of the mugs. Those funds which by chance are in the right area at the right time put it all down to the magical abilities of the fund manager. Money floods in and they are forced to buy poorer and poorer stocks - eventually a new magician is found as the old emperor has lost his clothes.

For a racing investment fund who would put money into it - the public? brainwashed into thinking racing is a mug's game. The institutions? - too scared of law suits in misplacing their client's money. Racing professionals? - why dilute your payback and put your trust in others with a fraction of your knowledge. Selection by committee always goes for the average horse and the average horse loses. The fund would lose about 16% a year but still charge fees of 7% so how long would that last? Partnerships 2-6 people are another matter entirely.

[twindouble]

Partnerships 2-6 people are another matter entirely.[/QUOTE] Robert99.

Two partners are and has been my limit. It's not all that hard to come up with people you can work with. When it comes to horse racing they need to have a complete understanding about what the game is and what gambling is all about. That alone is the key along with their experience as handicappers. I've also had silent partners, guys that still play as they always have but are willing to toss in now and then.


T.D.

[podonne]

An investment fund survives on public and institutional confidence in its image. Three out of four funds cannot beat a monkey's pick by throwing at a dartboard. However, the public is confused by jargon, fleeced by high commission costs and appealed to by greed. The fund uses a bit of jiggery pokery with factors, graphs and so on but basically cannot foretell the future any better than a novice. Almost none of the managers have ever worked in the industries invested in and never risk their own capital -only that of the mugs.

If you had a computer system that generated a consistent return above some market measure and published those results, that's really all you need.


Those funds which by chance are in the right area at the right time put it all down to the magical abilities of the fund manager.

That doesn't really apply to Horse Racing, with a very short hold rate over a long period of time.


Money floods in and they are forced to buy poorer and poorer stocks - eventually a new magician is found as the old emperor has lost his clothes.

That will happen with any investment, diminishing returns and all. The key is generating a consistent return at a given level of capital, and the fund closes at that level.


For a racing investment fund who would put money into it - the public? brainwashed into thinking racing is a mug's game. The institutions? - too scared of law suits in misplacing their client's money. Racing professionals? - why dilute your payback and put your trust in others with a fraction of your knowledge. Selection by committee always goes for the average horse and the average horse loses. The fund would lose about 16% a year but still charge fees of 7% so how long would that last? Partnerships 2-6 people are another matter entirely.

If the return is consistent, it becomes just another investment vehicle, albiet a risky one.


You sound very angry at mutual funds, maybe lost a bit of money? Don't be so quick to judge this concept, as properly structured it avoids many of the downfalls above. Especially if the driver behind your picks is an automated computer system. There are a lot of smart MBA sitting in a lot of wall street basements making a lot of money by programing computers to make stock picks for thier company. They don't just make money by convincing the public to buy in.

[traynor]

<snip>
There are a lot of smart MBA sitting in a lot of wall street basements making a lot of money by programing computers to make stock picks for thier company. They don't just make money by convincing the public to buy in. <snip>

There are also a lot of MBAs (and graduate business students) using that same software to make picks at Belmont and Santa Anita for themselves. If all you are accustomed to using is "handicapping" software, you would be pleasantly surprised at what an enterprise data-modeling application will do to a database of race results. ;)
Good Luck

[bigmack]

When it comes to horse racing they need to have a complete understanding about what the game is and what gambling is all about.
Wrong again td - The less they know about the game the better.
("Too many cooks" adage)

[twindouble]

Wrong again td - The less they know about the game the better.
("Too many cooks" adage)

Mack, I'm more apt to trust good gamblers over most other professions.

[Robert Fischer]

An investment Fund is different, in that although there is probably a group running the machine, the investors are not handicappers. They are investing in the group's expertise. The Funds are sufficient to salary the expertise of the group, and to substantially multiply and diversify the system. The pitfalls include dependency on outside financing and increased responsibility. Other major problems can surface as well. For example as a win wager is increased (to a high enough extent), you begin to lose viable wager scenarios, starting with the smaller pools.

Robert --

Thanks for the response. Are you aware of any horse investment funds that are actually operating under this model -- as opposed to the shared risk "clubs" which have been discussed throughout this thread? Or are you just talking hypothetically?

Seth

Hypothetically.
A logical progression for a successful Partnership is to consider offers of private financing. These types of funds would be unlikely to be available to the public. Taking a successful, privately financed system up to the level of public fund is not always in the best interest of the system. I do not know of any publicly advertised funds.

[jetermvpbaby]

If Bluehorseshoe LOVES bluestar airlines and he buys and everyone ELSE buys, Bluestar goes up in value. Or, i should say that money being 'wagered' on the selection of bluestar doesn't hurt the price.


If a betting syndicate LOVES the 3 horse in the first at Belmont and hammers the horse, the 'stock' goes DOWN in value.

In my opinion, people who are good enough to win in the long run don't want to share with syndicate members who do not win. If you are a winning player, why would you want to get involved with other people?

You would have to find a unique individual who was good enough to win yet at the same time, his ego of being 'the man' would superceed his desire to hide in the proverbial bushes and grind out a nice living with no one knowing about it.

[rrpic6]

You would have to find a unique individual who was good enough to win yet at the same time, his ego of being 'the man' would superceed his desire to hide in the proverbial bushes and grind out a nice living with no one knowing about it.

Having been involved in this topic in real life, albeit about 8 times, I tend to agree with this philosophy.The major issues are the way winnings are taxed. People putting up $100, winning $50, then having to file a W2-G for $150 is ridiculous. California squelched using online wagering in the form of "investment teams" also, stating the accounts are for individuals only. Betting exchanges offer the best hope in the future for this sort of venture. Possibly legitimate offshore accounts, Pinnacle has a good rep here, to wager on Pic3's,4's etc. and circumvent the taxing. But of course the IRS is still out there monitoring, so its not actually legal to avoid the taxing. It would be up to the "investment teams" to report. If not, the IRS would have their way with whoever's name is listed as CEO.

[twindouble]

If Bluehorseshoe LOVES bluestar airlines and he buys and everyone ELSE buys, Bluestar goes up in value. Or, i should say that money being 'wagered' on the selection of bluestar doesn't hurt the price.


If a betting syndicate LOVES the 3 horse in the first at Belmont and hammers the horse, the 'stock' goes DOWN in value.

In my opinion, people who are good enough to win in the long run don't want to share with syndicate members who do not win. If you are a winning player, why would you want to get involved with other people?

You would have to find a unique individual who was good enough to win yet at the same time, his ego of being 'the man' would superceed his desire to hide in the proverbial bushes and grind out a nice living with no one knowing about it.

Well, I'm not going to push the idea down anyone's throat but I think you miss some very important points. First, there's no place for a big "ego" when it comes to gambling. Second it's just plain smart to have the extra capital to invest to take down a big one. Just because some can "grind" out a profit on their own with what I conceder a small bankroll for the majority of us, that don't mean that bankroll has no limits. The very nature of horse racing says there's times when covering more bases insure a win or improves your chances. That's what I mean by having partners that "understand" the game. It has absolutely nothing to do with competing with one another. That's why we call it "partnerships". Besides how many of us are "unique" when it comes to playing the horses? The common denominator is we have some capital to invest, if you don't then you shouldn't be gambling.

To point out a horse we like getting hammered down to chalk, that horse can very well be the key to success. Never bothered me, it's part of the game.

Good luck,

T.D.

[robert99]

Having been involved in this topic in real life, albeit about 8 times, I tend to agree with this philosophy.The major issues are the way winnings are taxed. People putting up $100, winning $50, then having to file a W2-G for $150 is ridiculous. California squelched using online wagering in the form of "investment teams" also, stating the accounts are for individuals only. Betting exchanges offer the best hope in the future for this sort of venture. Possibly legitimate offshore accounts, Pinnacle has a good rep here, to wager on Pic3's,4's etc. and circumvent the taxing. But of course the IRS is still out there monitoring, so its not actually legal to avoid the taxing. It would be up to the "investment teams" to report. If not, the IRS would have their way with whoever's name is listed as CEO.

rrpic6,

If this was a Betfair type operation it would best be placed in UK where there are no UK taxes on betting or betting income unless you are a bookmaker. You may only have to pay Betfair 2% or so on winnings on a high turnover. We know the tiny number of Betfair backers, worldwide, who make even a modest annual profit - 97% are losers even at near zero take outs. Obviously, the MBAs with basement computers have yet to strike.

[podonne]

The tax issue is very interesting. Other than California, can you setup a corporation whose sole business in betting on horse racing? How about the legitimate non-state concerns, YouBet, BRIS/TSN, etc..

Coroporate status would solve the tax issue because you could probably argue that the initial stake was an expense (buying a stake) and the winnings the revenue, thus you would only be taxes on profit. Structured as an investment firm and then you can treat every bet as an investment (investment banks can count traditionally financing activities as operational activities as far as P/L is concerned)

[robert99]

This is an area where the company can readily wind up after a year and start afresh again. Each first year all investments in computers, training etc and expenses being written off against income. Any surplus cash remaining within Betfair being distributed to investors from an offshore company. A good accountant could make the tax liability zero.

[rrpic6]

I recall looking at Betfairs' webpage when it initially began its operations. I believe access was then denied to the U.S. The concept of Betfair is just to back or not back one horse at given/taken odds? No chance for big scores with Pic6's or Superfectas?

[bigmack]

The tax issue is very interesting. Other than California, can you setup a corporation whose sole business in betting on horse racing? How about the legitimate non-state concerns, YouBet, BRIS/TSN, etc..

Coroporate status would solve the tax issue because you could probably argue that the initial stake was an expense (buying a stake) and the winnings the revenue, thus you would only be taxes on profit. Structured as an investment firm and then you can treat every bet as an investment (investment banks can count traditionally financing activities as operational activities as far as P/L is concerned)
CA a problem within a Corp? - News to me.

[traynor]

rrpic6,

If this was a Betfair type operation it would best be placed in UK where there are no UK taxes on betting or betting income unless you are a bookmaker. You may only have to pay Betfair 2% or so on winnings on a high turnover. We know the tiny number of Betfair backers, worldwide, who make even a modest annual profit - 97% are losers even at near zero take outs. Obviously, the MBAs with basement computers have yet to strike.

Why would anyone care about Betfair?

[robert99]

Why would anyone care about Betfair?

Only those who would want to make a profit at the game.
It has the liquidity and integrity to cover large bets at the price you want.
No one interested in stopping winners betting.
Takeouts are not 16% and winning back your own money as a PMU or Tote, but 2-5 % and that has a huge benefit to profit on turnover.

[traynor]

Only those who would want to make a profit at the game.
It has the liquidity and integrity to cover large bets at the price you want.
No one interested in stopping winners betting.
Takeouts are not 16% and winning back your own money as a PMU or Tote, but 2-5 % and that has a huge benefit to profit on turnover.

First, a number of people seem highly motivated "to make a profit at the game," and seem to do quite well without Betfair. So it may be misleading to make that type of definition.

Second, integrity and references to the ability of accountants to "creatively" manipulate records may be inappropriate on the same thread. A good accountant can make almost anything appear to be almost anything else; that is the reason for the Sarbanes-Oxley Act, among other things.

Third, no mutuel clerk at Santa Anita, Belmont, or elsewhere at any track I have attended has attempted to dissuade me from betting, win or lose. The implication is that "winners" are discouraged from betting so the source gets all the money, rather than just a portion. Given that you state 97% of the customers at Betfair lose, that seems an irrelevant issue. I can only assume it would be equally irrelevant elsewhere.

Finally, the "huge benefit to profit on turnover" apparently does little or no good for the 97% who lose. Specifically, the advantageous rates at Betfair do not seem to enable customers to get out of the red.

I have known a fairly high number of professional bettors and been involved with a fair number of betting syndicates. None displayed any interest at all in wagering online through services like Betfair. My question was not facetious; I am truly interested in what possible advantage Betfair would offer to a serious bettor, or group of serious bettors. That question remains unanswered.
Good Luck :)

[rrpic6]

I have known a fairly high number of professional bettors and been involved with a fair number of betting syndicates. None displayed any interest at all in wagering online through services like Betfair. My question was not facetious; I am truly interested in what possible advantage Betfair would offer to a serious bettor, or group of serious bettors. That question remains unanswered.
Good Luck :)

My question also. My knowledge of Betfair is limited. Its just one on one betting, no exotics?

[traynor]

My question also. My knowledge of Betfair is limited. Its just one on one betting, no exotics?

I don't want to create the impression of a hostile audience. Like rrpic6, I am genuinely curious. Most of the professional-level bettors I know dismiss "Internet wagering" as trivial (regardless of the large number of participants).

What I am asking, specifically, is a reason I should care about Betfair, or the fact that Betfair is willing to take my money. Given the number of legitimate wagering opportunities in the US, I find it really unusual that people should want to wager online with Betfair, particularly when 97% lose.

That would indicate, to me at least, that most major betting syndicates, and most serious bettors, avoid Betfair. There must be a reason. Perhaps it is all a question of scale; if someone wagers a few hundred, win or lose, it doesn't really matter. When serious money is involved, I think it is a quite different story.
Good Luck :)

[selvidge]

In my 18 years in Las Vegas, I saw dozens of "funds", commonly operated by a promoter that may have not known which end of the horse got fed. They all went into the dumpster and many people lost their shirts. In the early days of the "Pick Six", I know of three individuals who pooled client funds very successfully - Gordon Jones, when he was turf writer for the Los Angeles Examiner, Ron Cox, and Barry Meadows. Haven't heard anything positive on Jones for a decade, Cox tragically died young, and Barry took his wagering private.

For those inquiring about this subject ("funds"), they should know three things. First, very close to 100% of successful horse players are "loners". They are not inclined to "share" with anyone. On one side, this is a business decision - the more money focussed on a sound selection, the lower the odds and pay-off. On the other side, they would respond that those seeking such a "fund" are looking for a free lunch, and they scorn such individuals.

Consider a parallel. Via the Internet, you can get a PhD in less than two weeks. How do you think this makes those feel that worked 10-12 hours per day for eight years to earn such legitimately.

If you are willing to take a long-term, high-risk crap shoot, you would have better odds investing in a yearling syndication. A good friend, an attorney in Miami, did so per a yearling named ROANOKE. The horse won a million dollars and became a pretty decent stud.

Otherwise, study and learn. Check the 8th Race at Belmont on 9/23. The race dictated risk capital of $32. The investor cashed for $1200+.

Jim Selvidge
horsestk@horsestalk.com

[twindouble]

Jim, I would never buy into a "fund" but I would partner up with a couple more handicappers to take down a pick 6, like I have over the years.


T.D.

[traynor]

In my 18 years in Las Vegas, I saw dozens of "funds", commonly operated by a promoter that may have not known which end of the horse got fed. They all went into the dumpster and many people lost their shirts. In the early days of the "Pick Six", I know of three individuals who pooled client funds very successfully - Gordon Jones, when he was turf writer for the Los Angeles Examiner, Ron Cox, and Barry Meadows. Haven't heard anything positive on Jones for a decade, Cox tragically died young, and Barry took his wagering private.

For those inquiring about this subject ("funds"), they should know three things. First, very close to 100% of successful horse players are "loners". They are not inclined to "share" with anyone. On one side, this is a business decision - the more money focussed on a sound selection, the lower the odds and pay-off. On the other side, they would respond that those seeking such a "fund" are looking for a free lunch, and they scorn such individuals.

Consider a parallel. Via the Internet, you can get a PhD in less than two weeks. How do you think this makes those feel that worked 10-12 hours per day for eight years to earn such legitimately.

If you are willing to take a long-term, high-risk crap shoot, you would have better odds investing in a yearling syndication. A good friend, an attorney in Miami, did so per a yearling named ROANOKE. The horse won a million dollars and became a pretty decent stud.

Otherwise, study and learn. Check the 8th Race at Belmont on 9/23. The race dictated risk capital of $32. The investor cashed for $1200+.

Jim Selvidge
horsestk@horsestalk.com

I am uncertain what the relationship of online PhDs is to handicapping, but the myth of the "stalwart handicapper" off tilting the pari-mutuel windmills (sans Pancho) is dead long ago. The successful handicappers of today are as likely to be co-ed MBA students taking a break from real analysis to pick up some quick money for the rent as they are to be dour-faced "experts" hoarding every winner as if were their last.
Good Luck :)

[Valuist]

I am uncertain what the relationship of online PhDs is to handicapping, but the myth of the "stalwart handicapper" off tilting the pari-mutuel windmills (sans Pancho) is dead long ago. The successful handicappers of today are as likely to be co-ed MBA students taking a break from real analysis to pick up some quick money for the rent as they are to be dour-faced "experts" hoarding every winner as if were their last.
Good Luck :)

This isn't poker where one can become an expert within their first year of playing. Little more difficult game here.

[twindouble]

This isn't poker where one can become an expert within their first year of playing. Little more difficult game here.

Like Harvy P said, "this is one game that will humble anyone". Expert? LOL, I haven't met one yet and anyone passing themselves off as one has a screw lose.

I like to put it this way, one can have more knowledge and experience about racing than others do. Even when it comes to that it doesn't mean they will be successful handicapper gamblers. For example knowing everything there is to know about the cream of the crop, owners, trainers, breeding or the history of a race track makes for good conversation on TV, in editorials or here on the forum and that's about it. In my opinion the successful players are good handicappers and good gamblers not "experts".

Good luck,

T.D.

[Grifter]

I am uncertain what the relationship of online PhDs is to handicapping, but the myth of the "stalwart handicapper" off tilting the pari-mutuel windmills (sans Pancho) is dead long ago. The successful handicappers of today are as likely to be co-ed MBA students taking a break from real analysis to pick up some quick money for the rent as they are to be dour-faced "experts" hoarding every winner as if were their last.
Good Luck :)
Wow... I didn't know that..... great idea for a Beyer article in the Washington Post:

"Coed MBAs Forsake Real Analysis to Beat the Races for Rent" ..... nah, no sex appeal....

"Coed MBAs Bare All For Love or Money"... ah..., no.

"Exotic Dancer Coed MBAs Hit Pic-6 in Between Classes" .... getting close.

C'mon guys, help me out here....

-- Grifter

[Valuist]

Like Harvy P said, "this is one game that will humble anyone". Expert? LOL, I haven't met one yet and anyone passing themselves off as one has a screw lose.

I like to put it this way, one can have more knowledge and experience about racing than others do. Even when it comes to that it doesn't mean they will be successful handicapper gamblers. For example knowing everything there is to know about the cream of the crop, owners, trainers, breeding or the history of a race track makes for good conversation on TV, in editorials or here on the forum and that's about it. In my opinion the successful players are good handicappers and good gamblers not "experts".

Good luck,

T.D.

I would say anyone who makes their living from it is definitely an expert. Of the professional horse bettors I've known and met, none were instantly successful right after starting to play the game.

[1st time lasix]

the idea of a true "mutual fund" for horse race wagering is really pretty silly and foolish due to the onerous take out, the regulatory scrutiny and expected management fee. However it is clear that one needs adequate working capital $$$ to spread enough for "covers" on pick fours, pick sixes and superfectas. All the sucessful players say these pools are best attacked with enough money to do it right. The little guy generally just contributes to the pools. The pooled concept works best among handicapping friends with a single leader that can break handicapping selection "ties" and configure the ticket structure properly. Sometimes I toss in a couple hundred with some of my buddies. As far as the coeds "banging" the pick six carryover....few of the MBA dishes I remember at the University of Florida were able to dicern the difference between a hot rider and their weekend date. :lol: At a ratio of about 4-1 in the MBA program the attractive ones without coke bottle glasses had no problem attracting a top jock! "and away they go....."

[twindouble]

I would say anyone who makes their living from it is definitely an expert. Of the professional horse bettors I've known and met, none were instantly successful right after starting to play the game.

I think our whole society uses the term "expert" to loosely, ESP when it comes to handicapping and wagering on the horses. I firmly believe one doesn't have to be an expert handicapper to win at this game, a good one yes but he better be a good gambler as well, ESP if he intends to make a living off it or has been. That's how I look at it, you can view it differently that's fine.


T.D.

[traynor]

This isn't poker where one can become an expert within their first year of playing. Little more difficult game here.

That is a point I would have to disagree with. Consider how the average bettor spends that year--reading Beyer, Davidowitz, the DRF, and, usually, everything written by Ray Taulbot and a bunch of others. Perhaps all good advice, but often contradictory. So the poor racing fan muddles along, losing some, winning some, until he or she arrives at some individual approach that improves the win side. Building on that, skill begins.

Consider another alternative; someone who cares not one whit for Ainslie, Beyer, or Brohamer, is interested solely in the money, hates gambling if it involves losing, and wants to cut straight to the chase. Turn that person loose with a good set of tools, and a reasonable set of instructions on how to use those tools, and he or she can make remarkable progress in a very short period of time. Skill is definitely improved WITHOUT months and years of practicing how to lose.

Not just my opinion. Basic learning theory and decision-making processes. The way the average horseplayer acquired his or her skills is almost certianly at odds with "best practices." What that means in plain English is that the only thing difficult about acquiring a decent level of skill at handicapping is finding a competent teacher.
Good Luck :)

[traynor]

the idea of a true "mutual fund" for horse race wagering is really pretty silly and foolish due to the onerous take out, the regulatory scrutiny and expected management fee. However it is clear that one needs adequate working capital $$$ to spread enough for "covers" on pick fours, pick sixes and superfectas. All the sucessful players say these pools are best attacked with enough money to do it right. The little guy generally just contributes to the pools. The pooled concept works best among handicapping friends with a single leader that can break handicapping selection "ties" and configure the ticket structure properly. Sometimes I toss in a couple hundred with some of my buddies. As far as the coeds "banging" the pick six carryover....few of the MBA dishes I remember at the University of Florida were able to dicern the difference between a hot rider and their weekend date. :lol: At a ratio of about 4-1 in the MBA program the attractive ones without coke bottle glasses had no problem attracting a top jock! "and away they go....."

I don't know how long ago you were at Florida, but most of the ones I see are attractive, intelligent, highly motivated, and LOVE to get the boys (and some not so young "boys") into a game of high stakes Texas Hold'em. As for the inference that they might lack intelligence, or be "driven by hormones," you may not have been keeping up with the MBA curriculum.

The GMAT, the basic ticket to be considered for an MBA program, will flatly cull the overwhelming majority of critics. The competition to get in is fierce; this is 2006, and one of the few degrees worth having is an MBA. Relatively speaking, most PhDs--with the exception of a few engineering or hard science degrees--would be considered a vacation. Master's degrees in most field are almost as prevalent as BA or BS degrees were ten years ago. Try a financial analysis of a multinational, compared to divining the winner of the seventh at Belmont, and you might have some appreciation for the complexity of what MBA students do on a daily basis.

I understand that many people are proud of their hard won knowledge. That pride should not extend to demeaning or denigrating others who have reached the same (or a higher) level of knowledge in a shorter period of time. As one young lady observed, "Being old doesn't make you any smarter. It just makes you old."
Good Luck :)

[traynor]

Like Harvy P said, "this is one game that will humble anyone". Expert? LOL, I haven't met one yet and anyone passing themselves off as one has a screw lose.

I like to put it this way, one can have more knowledge and experience about racing than others do. Even when it comes to that it doesn't mean they will be successful handicapper gamblers. For example knowing everything there is to know about the cream of the crop, owners, trainers, breeding or the history of a race track makes for good conversation on TV, in editorials or here on the forum and that's about it. In my opinion the successful players are good handicappers and good gamblers not "experts".

Good luck,

T.D.

We could probably go a few rounds with definitions of "expert," but in most cases I agree with you completely. Many people tend to acquire information uncritically; they make no distinction between gossip, ancient history, and useful data. I agree completely that being able to rattle off the order of finish in the last 15 Belmonts might be impressive (to someone) but it is not necessarily what you need to know to win.

There have been several threads about decision-making studies of professional handicappers that pointed out the fact that the predictive accuracy diminished when more factors are considered; using fewer factors increased accuracy. Unfortunately, adding more factors not only diminished the accuracy, it increased their confidence that their incorrect predictions were correct (read "bet with both hands").

What you seem to be saying, and a point I agree with wholeheartedly, is that filling your head with a lot of trivia about horseracing, trainers, whatever, does not necessarily enable you to cash more tickets. Good point.
Good Luck :)

[Valuist]

Consider another alternative; someone who cares not one whit for Ainslie, Beyer, or Brohamer, is interested solely in the money, hates gambling if it involves losing, and wants to cut straight to the chase. Turn that person loose with a good set of tools, and a reasonable set of instructions on how to use those tools, and he or she can make remarkable progress in a very short period of time. Skill is definitely improved WITHOUT months and years of practicing how to lose.

Good Luck :)

"Is interested solely in the money, hates gambling if it involves losing, and wants to cut straight to the chase."

If somebody is only interested in the money and not racing, they will not develop the understanding of the game needed to become a winner. It will be laborious to them, and they likely will become impatient and quit. There's so many variables and situations that come up in racing that I guarantee you there's easier ways to make money in the world than betting horses.

Does anybody on this board like gambling if it involves losing? I would guess not. NOBODY wants to lose. But do professionals have losing days? Of course they do.

"Turn that person loose with a good set of tools". From your response, I'm guessing you do NOT mean Beyer or Davidowitz' books. I'm guessing it involves some kind of software you are selling. Can software be used as a supplemental form to aid in the handicapping and wagering process? Sure. Should it be used as the end-all, be-all? Of course it shouldn't. Numbers alone are meaningless, unless you know how they are derived, and can spot instances in which they look questionable. An MBA, no matter how smart, will be lost if they lack the knowledge of the fundamentals needed to beat the game.

[traynor]

"Is interested solely in the money, hates gambling if it involves losing, and wants to cut straight to the chase."

If somebody is only interested in the money and not racing, they will not develop the understanding of the game needed to become a winner. It will be laborious to them, and they likely will become impatient and quit. There's so many variables and situations that come up in racing that I guarantee you there's easier ways to make money in the world than betting horses.

Does anybody on this board like gambling if it involves losing? I would guess not. NOBODY wants to lose. But do professionals have losing days? Of course they do.

"Turn that person loose with a good set of tools". From your response, I'm guessing you do NOT mean Beyer or Davidowitz' books. I'm guessing it involves some kind of software you are selling. Can software be used as a supplemental form to aid in the handicapping and wagering process? Sure. Should it be used as the end-all, be-all? Of course it shouldn't. Numbers alone are meaningless, unless you know how they are derived, and can spot instances in which they look questionable. An MBA, no matter how smart, will be lost if they lack the knowledge of the fundamentals needed to beat the game.

Interesting response. First, I am NOT developing a software application to teach novices to handicap. That can best be done using other media, and other instructional methods. I think Anderon is in that line of work (or would like to be), and has some kind of software he was going to use in seminars.

You said, "If somebody is only interested in the money and not racing, they will not develop the understanding of the game needed to become a winner."

I disagree. The primary sponsors of the "sport" aspect of racing are losing money; the successful bettors are the ones who realize they are competing, not playing, or engaging in recreational behavior. There is little real difference between horse racing and trading stocks; you get information, and try to out-think and out-maneuver everyone else. I don't know of anyone who claims stock trading is a sport, or that people should invest in the market for recreation. The objective is always clear.

In racing, it is in the best interest of the industry that it be perceived as recreation, rather than a money-making endeavor. Losses are more acceptable, because it is the price of entertainment. If everyone started looking at racing as a potential investment, rather than recreational activity in which losses are routine and accepted, the industry would wither and blow away. At what track do you get odds equivalent to even the chump bets in Vegas? You can see a decent show, have a nice dinner, stay in a clean comfortable room, and play craps, blackjack, or baccarat for hours at relatively low cost. That is entertainment. Racing is competition.

You said, "There's so many variables and situations that come up in racing that I guarantee you there's easier ways to make money in the world than betting horses"

I don't know, betting on horses is pretty easy. There are a number of posters on this forum using software applications that they claim are making good profits, month after month, year after year. It might be easier to take out the trash at Wendy's, but I don't think you will find many six-figure incomes at Wendy's outside the top echelon of management. Rook (I think the name is right) is apparently using HSH software to knock down a six-figure income and seems to have been doing it for some time.

Yes, there is a learning curve. I absolutely, positively do not believe that mixing extraneous information into a dataset--whether that is the "good old days" at Belmont, or the size of the "Andy Beyer hole" in the pressbox at Gulfstream--is of any benefit whatsoever in picking winners. There are relevant factors in racing, and the better job you do of isolating those relevant factors, the better shot you have at winning.

Finally, as for Beyer and Davidowitz, I heard Andy state VERY emphatically, "If you really want to win, forget all that other junk and just concentrate on trips." The "junk" he was referring to was, primarily, computer handicapping. If I were to accept Beyer's advice, the entire idea of wagering online, or at multiple tracks, or in any situation in which the bettor lacks first hand observational knowledge, would be folly.

In any event, thank you for an interesting and informative post. I really enjoy learning the opinions of other handicappers and bettors, whether we agree or not.
Good Luck :)

[parlay]

The opportunity to either "back" or "lay" at a fixed price is
the beauty of the exchange. Toss in low takeout and you
have the recipe for profiting without "exotic" smashes.
You can kill a race buy taking advantage of both sides of the equation.
Unfortunatly liquidity is not sufficient at present.
North America should replace W/P/S parimutual with a
Betfair type exchange.

Mutual Funds: I contacted Cantor Fitzgerald last year with
the idea of allowing a fixed number of "analysts" to offer
a fund on a daily basis to the casual horseplayer.
The idea was to offer a few different types of funds, longshots,
exotics etc. Some aimed at the simulcast market and others aimed
at a single track.
I believe this would be attractive tp the newbie as well as the casual
player. They might be interested in using some of there funds
in this fashion.
Technology would allow them to invest at the same machine that
punches our tickets.
The managers plays would be available online as the gate opens,
allowing the investor to cheer along.
With the modern track being WIFI and most people having the means to
access the net i see this a a great way to embrace the new, youth
market.

[twindouble]

Traynor;

When it comes to horse racing and trading stock other than your goal being making money and competing with others there's another dimension in racing that captures all of us, that's the "horse". Seeing such a majestic animal perform can't compare with a graph or prospectus. Watching people race around in the pit waving their hands just don't it for me or waiting a few days, months or years to get results. The only time grown men cry playing the market is when they go broke but to see a horse break down effects all of us. Different world.:(


T.D.

[1st time lasix]

[QUOTE=traynor]I don't know how long ago you were at Florida, but most of the ones I see are attractive, intelligent, highly motivated, and LOVE to get the boys (and some not so young "boys") into a game of high stakes Texas Hold'em. As for the inference that they might lack intelligence, or be "driven by hormones," you may not have been keeping up with the MBA curriculum.

The GMAT, the basic ticket to be considered for an MBA program, will flatly cull the overwhelming majority of critics. The competition to get in is fierce; this is 2006, and one of the few degrees worth having is an MBA. Relatively speaking, most PhDs--with the exception of a few engineering or hard science degrees--would be considered a vacation. Master's degrees in most field are almost as prevalent as BA or BS degrees were ten years ago. Try a financial analysis of a multinational, compared to divining the winner of the seventh at Belmont, and you might have some appreciation for the complexity of what MBA students do on a daily basis.
Lighten up! I have a MBA from there and believe me....men and woman still interact on ALL levels. I also work for a fortune 500 financail multi-national....so don't give me that crap about "appreciating for the complexity of what mba students do on a daily basis" What a joke. Academic snobery is the worst kind!

[Valuist]

Interesting response. First, I am NOT developing a software application to teach novices to handicap. That can best be done using other media, and other instructional methods. I think Anderon is in that line of work (or would like to be), and has some kind of software he was going to use in seminars.

You said, "If somebody is only interested in the money and not racing, they will not develop the understanding of the game needed to become a winner."

I disagree. The primary sponsors of the "sport" aspect of racing are losing money; the successful bettors are the ones who realize they are competing, not playing, or engaging in recreational behavior. There is little real difference between horse racing and trading stocks; you get information, and try to out-think and out-maneuver everyone else. I don't know of anyone who claims stock trading is a sport, or that people should invest in the market for recreation. The objective is always clear.

In racing, it is in the best interest of the industry that it be perceived as recreation, rather than a money-making endeavor. Losses are more acceptable, because it is the price of entertainment. If everyone started looking at racing as a potential investment, rather than recreational activity in which losses are routine and accepted, the industry would wither and blow away. At what track do you get odds equivalent to even the chump bets in Vegas? You can see a decent show, have a nice dinner, stay in a clean comfortable room, and play craps, blackjack, or baccarat for hours at relatively low cost. That is entertainment. Racing is competition.

You said, "There's so many variables and situations that come up in racing that I guarantee you there's easier ways to make money in the world than betting horses"

I don't know, betting on horses is pretty easy. There are a number of posters on this forum using software applications that they claim are making good profits, month after month, year after year. It might be easier to take out the trash at Wendy's, but I don't think you will find many six-figure incomes at Wendy's outside the top echelon of management. Rook (I think the name is right) is apparently using HSH software to knock down a six-figure income and seems to have been doing it for some time.

Yes, there is a learning curve. I absolutely, positively do not believe that mixing extraneous information into a dataset--whether that is the "good old days" at Belmont, or the size of the "Andy Beyer hole" in the pressbox at Gulfstream--is of any benefit whatsoever in picking winners. There are relevant factors in racing, and the better job you do of isolating those relevant factors, the better shot you have at winning.

Finally, as for Beyer and Davidowitz, I heard Andy state VERY emphatically, "If you really want to win, forget all that other junk and just concentrate on trips." The "junk" he was referring to was, primarily, computer handicapping. If I were to accept Beyer's advice, the entire idea of wagering online, or at multiple tracks, or in any situation in which the bettor lacks first hand observational knowledge, would be folly.

In any event, thank you for an interesting and informative post. I really enjoy learning the opinions of other handicappers and bettors, whether we agree or not.
Good Luck :)

I would agree with some of your points and disagree with others. I'll also clarify some of my earlier points.

"There is little difference between horse racing and the stock market. You get information and try to outthink everyone else"

That is true. Horse racing is basically the market with horses instead of companies. But in terms of getting information, this is where the distinction comes between a handicapper and the newbie MBA. Those of us who are passionate about handicapping will have no problem looking up charts of a horse's last 8 races, or looking up past videotapes. But ask me to look up a company's last 8 quarterly statements, I'll pass. Why? Because its as boring as watching grass grow. And what will an MBA with no interest in racing do regarding digging deep into a horse's pps? They'll pass as well because they arent passionate about it. All they want is the money so they would just want to see a computer printout and would accept it as fact. In my earlier post, I was referring to racing as a generality; meaning the handicapping process as well; not just the actual sport.

"Losses are acceptable because it is the price of entertainment"

Are you talking long term or very short term? Long term they are completely unacceptable. If one shows two losing years in a row, they should make some serious changes or take time off. But a losing day? Several losing days? If we got upset over every losing bet or day, we'd lose our minds. Its best to try to maintain and even keel. Same goes for winning. Don't get too high when you win because eventually you have to deal with a lost photo or DQ.

Re: Beyer's junk comments, I think he was referring to more stuff than just computer handicapping. Believe it or not, I think he may have even been referring to speed figures in general. Because they are so widely available, the value in them has been largely lost. He also could've been referring to trainer data, appearance, bias and a myriad of variables. But basically, I believe he's right. If a handicapper could only have one tool, be it speed figures, computer printouts, or one's own visual observations, I'd say trips would be most important, although moreso in some races (turf) than others.

I'm sure most of us had been on rolls before where we thought we were invincible but if anybody really believes that in general, this game is "easy" they are kidding themselves. A friend of mine has been betting horses full time since 1980 and never have I heard him say "this is easy" without joking about it. He knows if he stops putting in the work, keeping up to date, he'll get his butt kicked.

[traynor]

I would agree with some of your points and disagree with others. I'll also clarify some of my earlier points.

"There is little difference between horse racing and the stock market. You get information and try to outthink everyone else"

That is true. Horse racing is basically the market with horses instead of companies. But in terms of getting information, this is where the distinction comes between a handicapper and the newbie MBA. Those of us who are passionate about handicapping will have no problem looking up charts of a horse's last 8 races, or looking up past videotapes. But ask me to look up a company's last 8 quarterly statements, I'll pass. Why? Because its as boring as watching grass grow. And what will an MBA with no interest in racing do regarding digging deep into a horse's pps? They'll pass as well because they arent passionate about it. All they want is the money so they would just want to see a computer printout and would accept it as fact. In my earlier post, I was referring to racing as a generality; meaning the handicapping process as well; not just the actual sport.

"Losses are acceptable because it is the price of entertainment"

Are you talking long term or very short term? Long term they are completely unacceptable. If one shows two losing years in a row, they should make some serious changes or take time off. But a losing day? Several losing days? If we got upset over every losing bet or day, we'd lose our minds. Its best to try to maintain and even keel. Same goes for winning. Don't get too high when you win because eventually you have to deal with a lost photo or DQ.

Re: Beyer's junk comments, I think he was referring to more stuff than just computer handicapping. Believe it or not, I think he may have even been referring to speed figures in general. Because they are so widely available, the value in them has been largely lost. He also could've been referring to trainer data, appearance, bias and a myriad of variables. But basically, I believe he's right. If a handicapper could only have one tool, be it speed figures, computer printouts, or one's own visual observations, I'd say trips would be most important, although moreso in some races (turf) than others.

I'm sure most of us had been on rolls before where we thought we were invincible but if anybody really believes that in general, this game is "easy" they are kidding themselves. A friend of mine has been betting horses full time since 1980 and never have I heard him say "this is easy" without joking about it. He knows if he stops putting in the work, keeping up to date, he'll get his butt kicked.

Given that the overwhelming majority of people spend the major portions of their lives working at jobs they either dislike, hate, or are bored to death by, the necessity of passion in analysis is questionable. Emotional analysis, regardless of content, is more to validate preconceptions than to predict the future. What many handicappers lack is the ability to analyze data objectively--an ability that researchers (especially business researchers) develop to relatively high levels.

Right up to the day Enron announced their imminent collapse, experts were touting it vigorously, including some of the most "respected" investment bankers and investment "counselors" in the world. Investors at any time in the preceding year, analyzing the trends objectively, should have been alarmed. They were not. "Blind passion" became a common term because of its basic truth; passionate "involvement" in any activity may offer individual rewards and satisfaction, but does not necessarily equate to better performance.

In fact, numerous studies of "employee satisfaction" (a correlate of "passionate involvement") indicate there is no correlation between employee satisfaction and either increased quality or increased productivity. Similarly, there are a number of equally impressive studies suggesting that the root cause of such spectacular failures as Enron, the Challenger disaster, and many others was the result of "passionate involvement" by the participants that blinded them to plausible alternatives.

What does that have to do with handicapping? Enjoy it, but never, ever confuse the issue of enjoyment with making money. The passion for competition, the drive for profit, will get you a LOT further in handicapping than re-reading "The Winning Horseplayer" or "Betting Thoroughbreds" for the 10th time. Handicappers who lack the drive to succeed (or the skill) tend to rationalize losses as recreation. Some of those "handicappers" have been losing more than they win for 20 years or more, yet keep hammering away hoping for the "big breakthrough," the new angle, the new software application that will suddenly enable them to show a profit. More than a few of those "hopeful handicappers" are on this forum.
Good Luck :)

[robert99]

Given that the overwhelming majority of people spend the major portions of their lives working at jobs they either dislike, hate, or are bored to death by, the necessity of passion in analysis is questionable. Emotional analysis, regardless of content, is more to validate preconceptions than to predict the future. What many handicappers lack is the ability to analyze data objectively--an ability that researchers (especially business researchers) develop to relatively high levels.

Right up to the day Enron announced their imminent collapse, experts were touting it vigorously, including some of the most "respected" investment bankers and investment "counselors" in the world. Investors at any time in the preceding year, analyzing the trends objectively, should have been alarmed. They were not. "Blind passion" became a common term because of its basic truth; passionate "involvement" in any activity may offer individual rewards and satisfaction, but does not necessarily equate to better performance.

In fact, numerous studies of "employee satisfaction" (a correlate of "passionate involvement") indicate there is no correlation between employee satisfaction and either increased quality or increased productivity. Similarly, there are a number of equally impressive studies suggesting that the root cause of such spectacular failures as Enron, the Challenger disaster, and many others was the result of "passionate involvement" by the participants that blinded them to plausible alternatives.

What does that have to do with handicapping? Enjoy it, but never, ever confuse the issue of enjoyment with making money. The passion for competition, the drive for profit, will get you a LOT further in handicapping than re-reading "The Winning Horseplayer" or "Betting Thoroughbreds" for the 10th time. Handicappers who lack the drive to succeed (or the skill) tend to rationalize losses as recreation. Some of those "handicappers" have been losing more than they win for 20 years or more, yet keep hammering away hoping for the "big breakthrough," the new angle, the new software application that will suddenly enable them to show a profit. More than a few of those "hopeful handicappers" are on this forum.
Good Luck :)


Traynor,

In little old England I know less than a hundred full time handicappers in my lifetime. It is marvellous to me how you can get into the minds of the whole USA population and put their thoughts and actions into words. Even your in depth hand knowledge of PA member bank accounts is quite awe inspiring. You seem to confuse your own argument by the supposed excellence of business researchers, yet they missed Enron - so did Enron's accountants. They have also recently lost their clients $Bs by forecasting major hurricanes this autumn on the coast. Just taking the forecast (of the future :lol: ) of a 26 year old college kid. On Bloomberg the other day there was some analyst predicting the DOW would fall to 7000. Next day it reached its all time record high.

You seem to quote so much from these unvalidated and half baked business theories that in your seemingly easily impressed mind unsubstantiated sweeping statements becomes facts. Meanwhile, Toyota that fully involves its workforce at every stage and in every decision is putting GM and Ford out of business - along with their multi-layers of MBA's. Toyota simply strive to make a better and better product - profits look after themselves and the competition dies.

However, if someone reads a racing book to be informed they at are all misguided and doomed to fail. Perhaps they read racing books, belong to forums in order to pick up ideas, to look at things from different angles, to think things through for themselves. All the things that a university education fails to provide.

Passion can blind you from the truth for sure, but enlightened enthusiasm that keeps your mind engaged and active and that is free of greed and prejudice is the way that many succeed.

A skilled handicapper is one of the very best exponents of decison making in an area of complexity and incomplete data. What's more if he is wrong, his money is lost, not the corporation's. Have you ever asked a chief executive or politician to make a firm decision - you won't likely get one in a lifetime. The buck will be passed, committees formed, lawyers consulted, consultants brought in and possibly a definite maybe eventually results.

A leisure handicapper has no illusions, he loses small to pay for the enjoyment. Those I know just buy a daily paper for their horse form - never read any racing books whatsoever. Same way middle age golfers buy all the pro kit, join expensive clubs, but don't expect to ever beat Tiger Woods (unless they are European).

[Valuist]

Robert is right. I've met enough MBAs and while they could all be considered "book smart", some of them definitely lacked common sense. They also tend to be more arrogant than the general population. Confidence is good, but arrogance gets punished. They also tend to be impatient; while one could teach them how to handicap, it takes longer to learn how to gamble effectively, as well as handling the psychological ups and downs of the game. I also think MBAs know they could make a lot of money doing something else, so the hunger and motivation wouldn't be there to become a successful handicapper and gambler.

[traynor]

"Even your in depth hand knowledge of PA member bank accounts is quite awe inspiring."
Actually pretty shallow. Commentary was based on their postings, which I assume to be true.

"You seem to confuse your own argument by the supposed excellence of business researchers, yet they missed Enron - so did Enron's accountants."

You seem to be clueless on the topic. Arthur Anderson's accountants were well aware of what was going on; so were the investment brokers telling the gullible and witless to invest in Enron.

"You seem to quote so much from these unvalidated and half baked business theories that in your seemingly easily impressed mind unsubstantiated sweeping statements becomes facts. Meanwhile, Toyota that fully involves its workforce at every stage and in every decision is putting GM and Ford out of business - along with their multi-layers of MBA's. Toyota simply strive to make a better and better product - profits look after themselves and the competition dies."

Again, you seem clueless about the topic. You seem to have fallen hook-line-and-sinker for the PR campaigns. Is that what you call critical analysis? :lol:

"However, if someone reads a racing book to be informed they at are all misguided and doomed to fail."
Do you actually think about what you write, or does this just come out by itself? That comment is so silly it doesn't deserve a response. :lol:

"A skilled handicapper is one of the very best exponents of decison making in an area of complexity and incomplete data. What's more if he is wrong, his money is lost, not the corporation's. "

Gee, how does that fly with the "invest with me" balloon? Wasn't the topic of this thread some idea about groups investing in something? You seem to be drifting. ;)

"Have you ever asked a chief executive or politician to make a firm decision - you won't likely get one in a lifetime. The buck will be passed, committees formed, lawyers consulted, consultants brought in and possibly a definite maybe eventually results. "

Gee, you must be talking about those poor folk at GM, with their dark ages MBAs, when all it took to be a manager was MBWA and a fast answer devoid of content. This is 2006, not 1986. CEOs are hired primarily for their decision-making skills. Which could be why the average CEO compensation has skyrocketed in the past 10 years.

Good Luck ;)

[traynor]

Robert is right. I've met enough MBAs and while they could all be considered "book smart", some of them definitely lacked common sense. They also tend to be more arrogant than the general population. Confidence is good, but arrogance gets punished. They also tend to be impatient; while one could teach them how to handicap, it takes longer to learn how to gamble effectively, as well as handling the psychological ups and downs of the game. I also think MBAs know they could make a lot of money doing something else, so the hunger and motivation wouldn't be there to become a successful handicapper and gambler.

I used to think almost exactly the same thing. Especially that MBAs were overpaid, underworked incompetents who were only capable of currying favor with their witless superiors. Then I started taking graduate business classes. If your knowledge of the rigors of a decent MBA curriculum is based on second-hand information, you might be in for a surprise.
Good Luck :)

[osophy_junkie]

I have to ask though, what's in it for them? If they're betting successfully, why get tangled up with the bankrolls of "investors"?

It takes money to make money.... It would be benificial for a player with a small initial bankrool and a profitable system to take on investors for a cut of the profit. That profit then goes to increase their bankroll.

From an investors angle they gain better liquidity, larger returns, and possibly lower risk than other investments.

[traynor]

It takes money to make money.... It would be benificial for a player with a small initial bankrool and a profitable system to take on investors for a cut of the profit. That profit then goes to increase their bankroll.

From an investors angle they gain better liquidity, larger returns, and possibly lower risk than other investments.

When you put it that way, I have to agree. The entire concept of financial leverage involves the "cost of capital"--if the leverage provided exceeds the cost, then it is a good move, for BOTH the investors and the handicapper.

The only sticking point is that if the player with the profitable system has a small bankroll, why can't he or she do the financing from profit? Granted, if it is a mechanical, 10-15% return type of thing, it would take a long time to build a bankroll solo. It is also very likely that the "advantage" will evaporate along with the increased bets. The same "systems" that show paper profits tend to run seriously in the red when someone starts pumping serious money into the betting pools on those same selections.

Specifically, paper trials are usually based on non-existent or trivial wagers, with results calculated on what other bettors did. If the system's (large) winning wagers are factored in, even a 15-20% paper profit can disappear in the real world.

From an investor's standpoint, the question would be, "What affect would the large wagers (of a betting syndicate) have on the profit available?" In most cases, it is extremely negative. If you show a laundry list of $2000 win bets actually made at Santa Anita or Belmont that show a 10-15% net return, that is persuasive, but only at the $2000 level. At the $5000 or $10,000 level, the exact same process could easily show a 15-20% loss over time.
Good Luck :)

[sbp]

There used to be a public company that pinhooked yearlings then went to an online betting site through winticket/america tab and now I am not sure what they are doing PXIT is the symbol