Randomness cannot be excluded from handicapping

[46zilzal]

After reading Fooled by Randomness, by Nassim Taleb which relates to others how predictions of the stock market are simply a matter of luck, NOT SKILL, it is refreshing to see this author come back to cover his life's work as a knowledgeable skeptic in the wonderful, thought provoking book,THE BLACK SWAN .

He,like many authors of late (i.e The Drunkard's Walk: How Randomness Rules our Lives), shoots gigantic holes in probability theory and the use of databases to predict future events. One of my favorite expressions he used as related to the Bell curve which all database gurus take as being GOSPEL, he calls the GIF, or gross intellectual fraud.

Using countless examples in situations ALL of us have confronted, he repeatedly shows that we know FAR less than we think we know and cover up those deficits (often by "experts" he refers to as empty suits) by psychological mechanisms of narration (giving bogus, unproven answers to the times when the data misses the mark).

He shoots many holes in the idea of conditional probability (i.e if this, then
that is true) by enlightening the reader to aspects of that conclusion we might never have considered before.

A remarkable tour de force that will get you thinking about ANY DOGMA you hold dear particularly in the racing game. A must read.

[Hanover1]

Sounds interesting, and I buy into it.....Gives credence to the often berated comment: " We will let the horse tell us".

[formula_2002]

I READ TALEB'S BOOK AND A FEW OTHERS OF THE SAME ILK.
I COME AWAY WITH THIS.
MOST EVERY THING WE EXPERIENCE IS NOT RANDOM, WE SIMPLY ARE NOT SMART ENOUGH TO FIGURE ALL THINGS OUT, AND WHEN WE DO FIGURE SOMETHING OUT, AND IT’S NOT TO OUR LIKING, WE IGNORE IT AND CALL IT A RANDOM EVENT :)

[46zilzal]

MOST EVERY THING WE EXPERIENCE IS NOT RANDOM, WE SIMPLY ARE NOT SMART ENOUGH TO FIGURE ALL THINGS OUT, AND WHEN WE DO FIGURE SOMETHING OUT, AND IT’S NOT TO OUR LIKING, WE IGNORE IT AND CALL IT A RANDOM EVENT :)
You have quite a bit of enlightenment to add to your "sure thing" analysis of $2.20 winners my friend.....

Ilk is not what I would call genius

[Robert Goren]

Talab is right that a lot of stuff gathered from data bases applies only in the short run or in small markets. The size of the market effects the sample and sometimes the outcome. But how do you bet randomness? Throw darts. The thing to remember is not to think something pulled from a a data base is law.

[garyoz]

Here's another: The Invisible Gorilla.

http://www.amazon.com/Invisible-Gorilla-Other-Intuitions-Deceive/dp/0307459659/ref=sr_1_1?s=books&ie=UTF8&qid=1282156710&sr=1-1

I don't buy "black swans." Perceptive/cognitive denial. Trying to connect the dots while ignoring information.

[Greyfox]

If randomness cannot be excluded from your handicapping, can anyone tell us how to include it? (Playing a table of random numbers will take you to the poorhouse.)

[lsosa54]

Only way I see how to do it is to allow a certain amount for randomness in your betting line, whatever it may be, 10%? 20%?, or maybe vary it by type of race. That will make the betting odds you require on contenders higher and give you a bit of hedge.

[formula_2002]

You have quite a bit of enlightenment to add to your "sure thing" analysis of $2.20 winners my friend.....

Ilk is not what I would call genius

nothing is for sure, but there is a good probability that the 10 horse in sar's race 6 today (08-18-2010) will hit the board, and long term, I expect horses that fit this model to return a .95 to 1.05 roi..
I could be wrong about that :

right again, the beast finished 4th. There was a good probability it would hit the board and a ( 1-good probability) it would not.

[ArlJim78]

A remarkable tour de force that will get you thinking about ANY DOGMA you hold dear particularly in the racing game. A must read.
highly recommend it, I would say that he probably does qualify as a genius.

there is hope for you afterall, especially if you use Talebs way of thinking to challenge other dogma you hold so dear like climate change, big government social programs, financial schemes, etc. You might just find out that many of the convictions you espouse in off-topic are on shaky ground.

[CBedo]

After reading Fooled by Randomness, by Nassim Taleb which relates to others how predictions of the stock market are simply a matter of luck, NOT SKILLIf this is what you took away from this fine work, then you need to reread it. He doesn't say success is matter of luck only, he says that we just tend to take too much credit when things are good, and apply too much of the blame to randomness when things are bad. There is information to be gained from past experience (and data for that matter), but we just have to be careful about quantifying and relying exclusively on known risk measures and categories, and should acknowledge that there is an unknown risk as well.

[46zilzal]

If this is what you took away from this fine work, then you need to reread it. He doesn't say success is matter of luck only, he says that we just tend to take too much credit when things are good, and apply too much of the blame to randomness when things are bad. There is information to be gained from past experience (and data for that matter), but we just have to be careful about quantifying and relying exclusively on known risk measures and categories, and should acknowledge that there is an unknown risk as well.
http://old.nationalreview.com/nrof_glassman/glassman200406230851.asp
Fooled by Randomness is loaded with crackling little insights, but the best one is that what looks like skill is often plain old luck, so beware of investment geniuses. They will get their comeuppance, just as Solon warned. Solon was an upright ancient Greek legislator, known for speaking his mind. When King Croesus of Lydia, the richest man of his day, bragged to Solon about his wealth, Solon admonished, “The uncertain future is yet to
come, with all the variety of future.” And it did. Cyrus defeated Croesus and nearly burned him at the stake.

My own view is that it’s not all luck, but it’s mainly luck. Much of what investors do in picking stocks — the research, the listening, the talking, the reading — is nothing more than wheel-spinning. It wastes time and gets them nowhere special.

[markgoldie]

Okay. Let's all agree that there is a tremendous amount of randomness in any given event. This means that you were lucky whenever you cashed a ticket and unlucky when you did not.

But I think all of us know that. And it's why we don't commit half of our bankroll to a given event.

And despite all of this randomness, how do we account for the fact that year after year at track after track, the winning percentage of favorites hovers right around that 30% mark? Since we are talking average field sizes well in excess of 3, this would seem to prove that the form means something.
One of the greatest keys to handicapping success is knowing one thing: When you have made a good bet that turned out badly.

Why is that so important? Because bad results should not automatically have you altering what has been a successful approach. In this regard, I think that gimmick bettors have a decided edge over short-priced win players and that's because they are used to losing streaks. It comes with the territory. On the other hand, you must keep religiously analyzing what you see out on the track. Randomness can be accepted, but missing track biases, for example, cannot.

And so it goes. Tough game. Get big rebates if you can.

[Charlie D]

And despite all of this randomness, how do we account for the fact that year after year at track after track, the winning percentage of favorites hovers right around that 30% mark? Since we are talking average field sizes well in excess of 3, this would seem to prove that the form means something.
.

Around 70% of favs finish ITM, most races, i believe are won by the first 3/ 4 in the market, which seems to suggest in horse racing, randomness does not have a significant impact.

[therussmeister]

What randomness in horse racing comes down to is: You can't beat the race, but you can beat the races.

How do you incorporate randomness in handicapping? By never giving any horse a 0% chance of winning. By staying focused only on long-term results, not this race's results.

[Overlay]

How do you incorporate randomness in handicapping? By never giving any horse a 0% chance of winning.
And the corollary to that is playing based on wagering value, rather than on pure winning probability.

[formula_2002]

The first principle is that you must not fool yourself - and you are the easiest person to fool.

Richard Feynman

surley you're joking mr feynman

[Robert Fischer]

the neat unknown (incalculable complexity) + the general old boring unknown = "randomness"

a common tendency for players first trying to make probability estimates is to over-estimate their selections chances (and so underestimate the lowest acceptable odds)
most intuitively start adding more "cushion"



there is also a misconception between probability and randomness. for a true 20% win rate you could lose 5 in a row or win 5 in a row any given day or relative examples over long terms. This isn't randomness either. It's still driven by your true 20% rate, it's probability.

[46zilzal]

there is also a misconception between probability and randomness. for a true 20% win rate you could lose 5 in a row or win 5 in a row any given day or relative examples over long terms. This isn't randomness either. It's still driven by your true 20% rate, it's probability.

As both HE, and Leonard Mlodinow describe: OVER-RELIANCE of determinism and faith in the absolute predictability of the average......The world, and the game of horse racing, has no predictable average in the short term (on the one race we wager upon).

Without incorporating the random and TOTALLY UNPREDICTABLE (a bump, rider drops the whip, horse checked, in tight, or taken up, horse props, rider loses an iron, assistant starter does not do his job well ONE TIME, horse forced wide at a critical point in the contest, track bias comes up that was unknown a race before, saddle slips, path bias develops and rider doesn't read it, etc.) one cannot envision the multiple scenarios that can develop in a contest from gate to wire.

Don't include those as rational possibilities which can come to fruition at a moment's notice through the NORMAL nature of any race, and you will NEVER hit the long ball out of the park, NEVER as you will be looking in the same places the crowd looks...That is poisonous in a parimutuel game.

[Dave Schwartz]

Okay. Let's all agree that there is a tremendous amount of randomness in any given event. This means that you were lucky whenever you cashed a ticket and unlucky when you did not.

But I think all of us know that. And it's why we don't commit half of our bankroll to a given event.

And despite all of this randomness, how do we account for the fact that year after year at track after track, the winning percentage of favorites hovers right around that 30% mark? Since we are talking average field sizes well in excess of 3, this would seem to prove that the form means something.
One of the greatest keys to handicapping success is knowing one thing: When you have made a good bet that turned out badly.

Mark,

You have once again shown yourself to be based in reality.

It is all randomness! But randomness based upon probabilistic fact.


Why does the house win in the long run at the crap table? Because the the probabilities relative to the odds favor them.

Permit me a story.

In the mid '70s I was working at the Golden Nugget in Las Vegas. Steve Wynn had just taken over. There was no hotel. Just 36 BJs, 7 crap tables and 2 roulette wheels. At the time of this story (I think it was April, 1976), I was sitting box in the crap pit on day shift.

On April 1st we were having a pretty good day. Back in those days most casinos kept what was known as a "walk sheet." The boxmen and floormen manually tracked every player that bought in for more than $20. (Out on the strip they typically set the bar a little higher but in the downtown casinos it was generally $40 or more.)

I learned very quickly that if the floorman asked, "How much is the guy in #3 in?" any answer other than "I don't know," was acceptable.

When a player that was being tracked walked away you would tell the floor, "In $200, out $120," or whatever the proper tally was. By the end of the day we knew whether or not the day was a winner based upon the walk sheets.


Back to April 1st. Early in our shift we had a pretty good winner going. So much so that by 4pm confidence was high. (Yes, these guys really did sweat the money that much.) The boss went on a break around 4:15pm for dinner and when he came back at 5pm one of the floormen told him that we had booked a $20k loser while he was gone. Then he said, "April Fool's!"

The boss was furious. "You don't make jokes like that!"

The "count" started every day at 5:30pm. The count team would make its way through the BJ pit and eventually get to the crap pit at about 5:55 or so. (I worked until 7, but swing officially ended at the nugget at 6pm.)

So, the boss has become paranoid about the potential bad luck caused by the floorman's joke. He tells the boxmen to move the dice as slow as possible.

About 5:30 a guy comes up and nails us for about $10k in like 6 minutes, which was enough to push us over to the losing side.


This went on for the entire month! Every single day we lost! The bosses (including Steve Wynn himself) are spending a lot of time in and around the crap pit. When a casino loses day in and day out, management begins to assume that someone is heisting the joint. Every fill is being checked. The cameras are being watched and reviewed with great scrutiny.

One day, maybe around the 20th or so, we had a good day going. So good that at 5pm the boys in the pit have lit up cigars for the first time in April. Wynn runs down from his office and demands that everyone put out the cigars.

I am on game 7 that day, the last game in the room to be counted. It is around 5:30 and my game is pretty dead. Just a couple of $2 players. I can see the count team at Roulette #1 (which is actually right next to crap pit.) The pit boss goes and tells everyone to move the dice real slow. I turn to my floorman and say, "It won't help. Someone's coming. Right now they are preparing to wreck our day." He tells me to shut up.

5:40pm. Out of no where, an idiot player walks up to the table and puts $500 cash each on the Big 6 and Big 8. (This is a very stupid bet because had he placed those numbers he would have gotten 7-to-6 instead of even money.)

The dice roll. Six. Eight. Six. Eight. Eight. Six. He's $3k ahead.

The guy says, "Can I bet the hard six and eight for $100 each?" Sure.

Now the dice change... hard six. That costs us $1,400. Hard eight. $1,400 more.

"Can I bet the field, too?" Sure. $500 in the field. We like this because if a six or 8 comes now he loses his field bet and maybe his hardway.

No such luck. "Two-craps!" Field pays double and we're down another $1,000.

"12 craps!" Triple! There goes $1,500.

Eventually he loses a little but by the time the count team gets there he has $12,000 of our checks in the rail. (And his original $1,00 cash is back in his pocket, which is considered very bad because if he loses he may just walk without reaching.)

As the count team leaves, things change. Dice roll, point-seven like 4 or 5 times in a row. The field never hits again and by 12 minutes after the hour he has lost every check in the rail plus $9,000 more from his pocket.

This is how the entire month went. Every time we were winner going into the last hour, someone, usually a single player, came along to beat us. One day, I was on a quarter game and it exploded for a $25k loss around 5:00.

They started using a "cooler" around mid-month. "Seven-out Sam" was his nickname. He normally worked swing shift, coming in at 8pm or so. Now he was ordered to be on call from 3pm on. He just got used to coming in around 4pm and then they'd call him in to replace the stickman on whatever table was hot.

A lot of people got fired that month. Amazingly, I wasn't one of them. Seven-out Sam lasted about a week when they discovered he really didn't have any magic. (He was on the stick during that $25k bird-game fiasco, calling away the last $20,000 or so.)

The streak ended promptly on the 1st of May.


Regards,
Dave Schwartz

PS: I am Dave Schwartz and I approve this message.

[46zilzal]

This is NOT casino gambling we are discussing either which is a game of BUILT IN negative expectation.

Throw dice, play cards, play roulette and NONE of them are under the influence of a multitude of variable variables, the expression of which can never be accurately predicted race to race.

[castaway01]

This is NOT casino gambling we are discussing either which is a game of BUILT IN negative expectation.

Throw dice, play cards, play roulette and NONE of them are under the influence of a multitude of variable variables, the expression of which can never be accurately predicted race to race.

Variable variables?

Dave wrote that great story and that's all you got out of it? Hey, I enjoyed it Dave, thanks, and I get your point.

[Light]

The reason randomness exists is because the variables of any gambling or non gambling event are infinite because infinity is the nature of existence. Since we cannot comprehend infinity,we cannot overcome randomness. Our strongest ally is simply being in the moment because it is the doorway to infinity.

[DeanT]

Thanks for the story Dave!

[HuggingTheRail]

Dan Ariely wrote a book called Predictably Irrational...not directly related to this topic, but its an interesting/easy read on how our mind comprehends/decides some choices...

As he says > Ariely explains, "My goal, by the end of this book, is to help you fundamentally rethink what makes you and the people around you tick. I hope to lead you there by presenting a wide range of scientific experiments, findings, and anecdotes that are in many cases quite amusing. Once you see how systematic certain mistakes are--how we repeat them again and again--I think you will begin to learn how to avoid some of them".

Sorry for adding another book review to a handicapping discussion...

[Charlie D]

I have not read Talebs book, but i do believe he is refering to stock investments and in stock investment there are very few, if any, past results or form from which to gather facts. No previous or little form means the chances of a random event taking place will be a lot higher, so in stock investment Taleb would be correct stating.

what looks like skill is often plain old luck, so beware of investment geniuses.


However, in horse racing there are past performances from which you can gather facts ( as Mark stated "form means something" ) This reduces the plain old luck element or randomness of the event somewhat and increases the skill element.



Just thinking out loud so don't shout at me if you think i'm writing BS.

[formula_2002]

This is NOT casino gambling we are discussing either which is a game of BUILT IN negative expectation.

Throw dice, play cards, play roulette and NONE of them are under the influence of a multitude of variable variables, the expression of which can never be accurately predicted race to race.

It seems to be the most difficult point for many horse players to graps.
The variables you may be talking about are honed by the wagered dollars into a single unit of probability, in my opinion not much different than other probability systems such as coin tossing, cards or craps.
Its simple enough to get a handle on this by determining the standard deviations of, say horse odds of exactly 1-1 and comparing that deviation to tossing a coin.
The quality of the results will be impacted by determining the public’s odds adjusted for take- out and breakage. I would be inclined to separate races into two groups. Those where the studied horse is an entry and not.
This is a much easier game than most want to admit.
The reason for not admitting it is, they can’t accept the results

[Robert Fischer]

As both HE, and Leonard Mlodinow describe: OVER-RELIANCE of determinism and faith in the absolute predictability of the average......The world, and the game of horse racing, has no predictable average in the short term (on the one race we wager upon).

Without incorporating the random and TOTALLY UNPREDICTABLE (a bump, rider drops the whip, horse checked, in tight, or taken up, horse props, rider loses an iron, assistant starter does not do his job well ONE TIME, horse forced wide at a critical point in the contest, track bias comes up that was unknown a race before, saddle slips, path bias develops and rider doesn't read it, etc.) one cannot envision the multiple scenarios that can develop in a contest from gate to wire.

Don't include those as rational possibilities which can come to fruition at a moment's notice through the NORMAL nature of any race, and you will NEVER hit the long ball out of the park, NEVER as you will be looking in the same places the crowd looks...That is poisonous in a parimutuel game.



a true 20% win probability includes those things

[Stillriledup]

FBR, great book, i read it a few months ago. :ThmbUp:

[Dave Schwartz]

The variables you may be talking about are honed by the wagered dollars into a single unit of probability, in my opinion not much different than other probability systems such as coin tossing, cards or craps.

Formula,

Exactly!

It is very difficult to get people to see that it is all just shooting craps, except that the probabilities are not absolutely pre-determined. Instead, we have our own reality; our own perception of what the probabilities in a given race are.

The degree to which we are consistently right or wrong in determining those probabilities (and the way we choose to exploit them) is what determines our profitability.


Dave

[Vinnie]

Very nice story Dave:

Thanks for taking the time to write and thank you for sharing.. :)

All the BEST!

[Exotic1]

Mark,

You have once again shown yourself to be based in reality.

It is all randomness! But randomness based upon probabilistic fact.


Why does the house win in the long run at the crap table? Because the the probabilities relative to the odds favor them.

Permit me a story.

In the mid '70s I was working at the Golden Nugget in Las Vegas. Steve Wynn had just taken over. There was no hotel. Just 36 BJs, 7 crap tables and 2 roulette wheels. At the time of this story (I think it was April, 1976), I was sitting box in the crap pit on day shift.

On April 1st we were having a pretty good day. Back in those days most casinos kept what was known as a "walk sheet." The boxmen and floormen manually tracked every player that bought in for more than $20. (Out on the strip they typically set the bar a little higher but in the downtown casinos it was generally $40 or more.)

I learned very quickly that if the floorman asked, "How much is the guy in #3 in?" any answer other than "I don't know," was acceptable.

When a player that was being tracked walked away you would tell the floor, "In $200, out $120," or whatever the proper tally was. By the end of the day we knew whether or not the day was a winner based upon the walk sheets.


Back to April 1st. Early in our shift we had a pretty good winner going. So much so that by 4pm confidence was high. (Yes, these guys really did sweat the money that much.) The boss went on a break around 4:15pm for dinner and when he came back at 5pm one of the floormen told him that we had booked a $20k loser while he was gone. Then he said, "April Fool's!"

The boss was furious. "You don't make jokes like that!"

The "count" started every day at 5:30pm. The count team would make its way through the BJ pit and eventually get to the crap pit at about 5:55 or so. (I worked until 7, but swing officially ended at the nugget at 6pm.)

So, the boss has become paranoid about the potential bad luck caused by the floorman's joke. He tells the boxmen to move the dice as slow as possible.

About 5:30 a guy comes up and nails us for about $10k in like 6 minutes, which was enough to push us over to the losing side.


This went on for the entire month! Every single day we lost! The bosses (including Steve Wynn himself) are spending a lot of time in and around the crap pit. When a casino loses day in and day out, management begins to assume that someone is heisting the joint. Every fill is being checked. The cameras are being watched and reviewed with great scrutiny.

One day, maybe around the 20th or so, we had a good day going. So good that at 5pm the boys in the pit have lit up cigars for the first time in April. Wynn runs down from his office and demands that everyone put out the cigars.

I am on game 7 that day, the last game in the room to be counted. It is around 5:30 and my game is pretty dead. Just a couple of $2 players. I can see the count team at Roulette #1 (which is actually right next to crap pit.) The pit boss goes and tells everyone to move the dice real slow. I turn to my floorman and say, "It won't help. Someone's coming. Right now they are preparing to wreck our day." He tells me to shut up.

5:40pm. Out of no where, an idiot player walks up to the table and puts $500 cash each on the Big 6 and Big 8. (This is a very stupid bet because had he placed those numbers he would have gotten 7-to-6 instead of even money.)

The dice roll. Six. Eight. Six. Eight. Eight. Six. He's $3k ahead.

The guy says, "Can I bet the hard six and eight for $100 each?" Sure.

Now the dice change... hard six. That costs us $1,400. Hard eight. $1,400 more.

"Can I bet the field, too?" Sure. $500 in the field. We like this because if a six or 8 comes now he loses his field bet and maybe his hardway.

No such luck. "Two-craps!" Field pays double and we're down another $1,000.

"12 craps!" Triple! There goes $1,500.

Eventually he loses a little but by the time the count team gets there he has $12,000 of our checks in the rail. (And his original $1,00 cash is back in his pocket, which is considered very bad because if he loses he may just walk without reaching.)

As the count team leaves, things change. Dice roll, point-seven like 4 or 5 times in a row. The field never hits again and by 12 minutes after the hour he has lost every check in the rail plus $9,000 more from his pocket.

This is how the entire month went. Every time we were winner going into the last hour, someone, usually a single player, came along to beat us. One day, I was on a quarter game and it exploded for a $25k loss around 5:00.

They started using a "cooler" around mid-month. "Seven-out Sam" was his nickname. He normally worked swing shift, coming in at 8pm or so. Now he was ordered to be on call from 3pm on. He just got used to coming in around 4pm and then they'd call him in to replace the stickman on whatever table was hot.

A lot of people got fired that month. Amazingly, I wasn't one of them. Seven-out Sam lasted about a week when they discovered he really didn't have any magic. (He was on the stick during that $25k bird-game fiasco, calling away the last $20,000 or so.)

The streak ended promptly on the 1st of May.


Regards,
Dave Schwartz

PS: I am Dave Schwartz and I approve this message.

Dave,

Great story. Thanks for the time you spent sharing it.

[46zilzal]

I have not read Taleb's book, but i do believe he is refering to stock investments and in stock investment there are very few, if any, past results or form from which to gather facts. No previous or little form means the chances of a random event taking place will be a lot higher, so in stock investment Taleb would be correct stating.


Just thinking out loud so don't shout at me if you think i'm writing BS.
First line explains it all....

[Charlie D]

Don't need to read the Taleb book when there are people like Formula, Dave and Mark around the internet.

[46zilzal]

Don't need to read the Taleb book when there are people like Formula, Dave and Mark around the internet.
That is about the funniest thing you have ever stated and that accounts for many rivalry statements at the old Match up venue where rookiness was a common stumbling block in their content,,,,,,,just like this one!

[Charlie D]

No rivalry here, just had to keep correcting all those errors in your posts.

[46zilzal]

rookiness shows no boundaries but then again Goethe pegged it correctly years ago :Nothing is worse than active ignorance.

[Charlie D]

Nothing is worse than active ignorance.


You're right there.

[Light]

Randomness is a term we usually associate with upsetting positive expectations. When we win in horse racing,do we say it was random? Of course not.To me randomness (in horse racing) is one of the infinite losing patterns in a positive expectation. If you play the favorite you expect about a 33% hit rate. Randomness has its affect on the frequency pattern.That's why something like the Martingale system that relies on a constant frequency and not a variable frequency is not viable. Because random patterns are infinite,you can never have enough "data" to verify any "system". By "system" I mean any approach, be it manually reading the form and your associative thought processes or a computers protocol. Imagine the results of your system laid out across infinity. Is your system profitable or not? Well it really depends on what section of results you are talking about and when you actually bet in relation to random cycles.(Its all connected). Those sectional results are certainly affected by positive and negative randomness (which really isn't randomness at all, but that's another topic)

The point made earlier about having a winning "system" that is prematurely discarded because it starts out in a "bad streak" because it happens to be temporarily caught in a random negative pattern,is basically what what I'm talking about. As I said in my last post,your best ally is not to fight it.That only complicates things. Instead of being swept away by the turbulence of the storm (random negative frequency) center yourself in the calm eye of the storm till it passes.

[46zilzal]

His first work, Fooled by Randomness, was voted by Fortune magazine as one of the 75 smartest books of all time.

http://money.cnn.com/magazines/fortune/fortune_archive/2005/03/21/8254826/index.htm

[46zilzal]

Randomness is a term we usually associate with upsetting positive expectations. When we win in horse racing,do we say it was random? Of course not.To me randomness (in horse racing) is one of the infinite losing patterns in a positive expectation. If you play the favorite you expect about a 33% hit rate. Randomness has its affect on the frequency pattern..

Name the process whatever you want but it is extant all the time nevertheless.

[Light]

Of course.

[markgoldie]

Dave:

Nice story. I hope you have it on Microsoft Office or something and you didn't take all that time to write it just for us. If you did, thanks on behalf of all of us for taking the time. Nice, clean writing style, by the way- good rhythm and pacing.

Anyway, I have a very good friend who for many years was a horse player. In the last 20 or so, he has been a stock analyist for one of the major Wall Street brokerages. His stock-picking style is based on a positive fundamentalist approach, which means (for those of you not familiar), that he looks at the strength, health, quality of management, and business opportunities of companies. He seeks companies that seem to have a good future and which are currently undervalued in the marketplace.

The other type of market player is the so-called "technical analyst" or "technician." This analyst doesn't care at all about the fundamental qualities of a company, but rather seeks to predict which way the market will move, knowing that all stocks will tend to follow the general movement of the market. Such analysts like to play the market more short term, because up and down movements have shorter life spans.

All the "sex appeal" is with the technicians. They employ all manner of data-based, computer-aided analysis of past market fluctuations to predict which way the market is going to move.

What does this have to do with horse racing? Well, a couple of things. First, I always thought it was a strange contradiction that my friend should be a fundamental analyst rather than a technician. Being a horse player, you would have thought that he would gravitate toward the faster, quicker-results nature of the technician rather than the boring, balance-sheet dissection of the companies through which he must plod. Being a "positive" fundamentalist would also seem a bit strange because one of the great strategies of horseplayers is to bet "wrong" so to speak. That is, play against the overvalued favorite for the less-valued longer shot. And so you might think that he would gravitate more naturally to playing "short."

Conversations with him over the years have been interesting. He attributes his gravitation toward positive fundamentalism in large part to his becoming a father. You see, in handicapping horses, we all tend to become social hermits in some sense. That is to say, it is self-defeating to trumpet a selection to the world because in a zero-sum game, the lowered odds based on our optimism comes right out of our pockets. In fact, it can make a winning selection essentially unprofitable (this, of course, due to the randomness of which we speak here and the fact that only a percentage of our "enthusiasms" will result in positive outcomes). And so, when we develop a good approach, we must hide it, keep it to ourselves.

As an aside, this is also why he feels that we must take most books written on handicapping with a huge grain of salt. What impetus could there be for giving away the secret to your success? None. Do we really think we're on the verge of a whale group giving away their programs so that everyone can do what they do? Of course not, and so books tend to be written by losers or possibly the marginally-profitable players with an ego-need to see their name in print.

At any rate, having children made him realize that as a father, you are in large part a teacher. That you badly need and want to share your insights with your children and that this desire to become a teacher for the common good is antithetical to a horseplayers mindset and existence. He might be a bit overboard here, but I think the essential gist of what he's saying is correct.

And so, positive fundamentalism suits his current life-view. Go out and scream the virtues of a company at the top of your lungs to the world. The more people buy, the more the price goes up and everyone is happy. There is no zero sum game in effect.

As for the inability of a group of successful stock pickers to repeat their short-term results: This is less due to fundamental randomness than it is the pressure to produce short-term results. As the greatest of them all, Warren Buffett has said, he has made only one essential bet in his career- that the American economy will do well over time. So in the long run, stocks go up. Naturally, as Lord J.M. Keynes famously said, "In the long run we're all dead." The question is whether you would like to have Buffett's balance sheet along the way. But that is an entirely different question.

[Overlay]

As an aside, this is also why he feels that we must take most books written on handicapping with a huge grain of salt. What impetus could there be for giving away the secret to your success? None.

Agreed, as long as you're using a process of elimination to isolate the one horse that is judged most likely to win (as most books/methods do), and then betting it regardless of its odds.

[Dave Schwartz]

Nice story. I hope you have it on Microsoft Office or something and you didn't take all that time to write it just for us. If you did, thanks on behalf of all of us for taking the time. Nice, clean writing style, by the way- good rhythm and pacing.

I do now. :lol:

[formula_2002]

His first work, Fooled by Randomness, was voted by Fortune magazine as one of the 75 smartest books of all time.

http://money.cnn.com/magazines/fortune/fortune_archive/2005/03/21/8254826/index.htm

OF ALL TIME!!! WOW, THEY HAVE ACCESS TO A LOT OF STUFF..

[Overlay]

OF ALL TIME!!! WOW, THEY HAVE ACCESS TO A LOT OF STUFF..

Rerminds me of Robert Klein's infomercial: "Now you can get every record ever recorded!!!"

[Greyfox]

As an aside, this is also why he feels that we must take most books written on handicapping with a huge grain of salt. What impetus could there be for giving away the secret to your success? None. Do we really think we're on the verge of a whale group giving away their programs so that everyone can do what they do? Of course not, and so books tend to be written by losers or possibly the marginally-profitable players with an ego-need to see their name in print.

on.

Your good friend may be a bright guy but on the points above he's off the moon.
No one asks a good handicapping author to be a whale.
If one tells us one or two good ideas for improving our game he or she has done his job.
By your friends logic Phil Mikelson and Tiger Woods wouldn't use swing coaches. Did Hank Haney, Jack Grout, the Harmons, Jim McLean and others win any Grand Slam titles? NO.
But they imparted information that helped other golfers go much farther.
I enjoy your comments, but there is an element of "bluster" dashed in.

[dnlgfnk]

"His first work, Fooled by Randomness, was voted by Fortune magazine as one of the 75 smartest books of all time"...

That was just a random vote outcome. The next vote is open to being entirely different, due to the randomness of life.

[markgoldie]

Your good friend may be a bright guy but on the points above he's off the moon.
No one asks a good handicapping author to be a whale.
If one tells us one or two good ideas for improving our game he or she has done his job.
By your friends logic Phil Mikelson and Tiger Woods wouldn't use swing coaches. Did Hank Haney, Jack Grout, the Harmons, Jim McLean and others win any Grand Slam titles? NO.
But they imparted information that helped other golfers go much farther.
I enjoy your comments, but there is an element of "bluster" dashed in.
Not sure that your analogy is 100% precise. A swing coach, a putting coach, a physical trainer, or a dietician can indeed help world-class golfers improve their game. Why can't these individual coaches also be world-class golfers? Because they simply do not have the overall physical ability that is required to be one. If they did, I'm sure they would be out on the tour themselves, rather than picking up their far lesser paychecks for performing their specialized tasks.

Writers of handicapping books, on the other hand, face no such physical barriers. All they must do is click a mouse, make a phone call, or stand in front of a teller to put down a wager. For this you need no special physical talent- I should know because even I can do it.

And so, the question as to why a person, with a decided edge in betting horses would wish to explain to others exactly how to duplicate this success is a very legitimate one- golf anaologies notwithstanding. This is a zero sum game. And as one somewhat familiar with publishing remuneration, I can tell you that pay + time + aggravation in the main do not make writing such books very attractive compared to collecting the easy money through betting horses. Here, the owners, trainers, jockies, and the horses themselves do the majority of the hard lifting for you.

Now. As you say, books may contain tidbits of information that can help you in some way. This is no doubt good and useful. But if these books carried titles like: "A few handicapping insights that could make you a bit less unprofitable," then we might have some truth in advertising. But titles such as "Total victory at the racetrack" or "The winning horseplayer" or "Fast track to thoroughbred profits," etc. seem to promise more than can be achieved by the reader and most probably the authors who wrote them.

[SchagFactorToWin]

Imagine the results of your system laid out across infinity. Is your system profitable or not? Well it really depends on what section of results you are talking about and when you actually bet in relation to random cycles.(Its all connected). Those sectional results are certainly affected by positive and negative randomness (which really isn't randomness at all, but that's another topic)

I agree completely and just happened to have recently finished a small study on that very topic. I find the win/loss patterns of my picks to be random, so wanted to find a way to measure the impact of that randomness.

I put all of my picks from 3/1/09 to 8/1/10 into a column of a spreadsheet, arranged by date. I then used the next column to show the ongoing profit/loss for that period.

Then, in the third column, I started the betting on 3/2/09, and ran the P&L. I kept doing this all, starting the bets one day later than the previous series, until there were hundreds of samples (basically one for each day of the period 3/1/09-8/1/10).

It showed that exactly what you said: The point made earlier about having a winning "system" that is prematurely discarded because it starts out in a "bad streak" because it happens to be temporarily caught in a random negative pattern,is basically what what I'm talking about. As I said in my last post,your best ally is not to fight it.That only complicates things. Instead of being swept away by the turbulence of the storm (random negative frequency) center yourself in the calm eye of the storm till it passes.

[Greyfox]

Now. As you say, books may contain tidbits of information that can help you in some way. This is no doubt good and useful. But if these books carried titles like: "A few handicapping insights that could make you a bit less unprofitable," then we might have some truth in advertising. But titles such as "Total victory at the racetrack" or "The winning horseplayer" or "Fast track to thoroughbred profits," etc. seem to promise more than can be achieved by the reader and most probably the authors who wrote them.

Goldie your comments suggest that it wasn't just "your friend" who said:

"What impetus could there be for giving away the secret to your success? None. Do we really think we're on the verge of a whale group giving away their programs so that everyone can do what they do? Of course not, and so books tend to be written by losers or possibly the marginally-profitable players with an ego-need to see their name in print."

I find that interesting. Because you opened your original statement giving
Dave Schwartz a compliment on what he wrote. Then you wrote a paragraph, supposedly said by a "friend," that tried to shove the knife into him and others with a velvet sheath as you are aware that he develops programs that help others do better at the track.

Then you do a soft shoe shuffle conceding that these authors may offer some tidbits that are helpful. Of course you don't mention that those tidbits just might help a reasonable horseplayer perhaps become a great one.
And that is what authors do. They give ideas that might be developed and springboarded on similar to the golf coach helping a golfer become better.

Some very good handicappers do not have the temperament to become whales. Their ideas in print might help others move that way. Knocking the marketing cover is also a huge sidestep from calling them "losers."

By the way the books that you mentioned have all been helpful to me.
William Scott is dead so he won't be calling you on your blustering.

[Dave Schwartz]

And so, the question as to why a person, with a decided edge in betting horses would wish to explain to others exactly how to duplicate this success is a very legitimate one- golf anaologies notwithstanding.

The above quote from Mark Goldie is a theme that comes up from time to time. The idea is that if a guy was a winning player, he would keep all of his ideas to himself.

First, a small correction. Very few winners explain EXACTLY what they are doing. That is not likely to happen, or at least not without some form of compensation.

Now, on to the real question, which I am going to paraphrase here: "Why would anyone gave away something that works?"


Understand I have been in the horse racing software business for over 20 years. (Our 20th anniversary was April 1st, 2010.) In those 20 years I have come across perhaps 80-100 winning players, perhaps 30 or 40 who I would say play on a professional level. Please note that I do not count the guy who calls me up and says, "I get 85% winners with one horse at an average mutuel of $12.00." (Yes, there are a few of those.)

So, why would a successful player tell you anything about what he does? I'll tell you why.

Being a successful player is a lonely job! Sure, you get a good-size bank account from it, but you get no ego-stroke. It isn't like succeeding at any other endeavor. Hit .350 and your face is plastered all over the media. Do it in New York and you'll make the cover of Time.

The same thing goes for any other sport. Everyone knows who the winners are! Why do you think so many successful players stuck with Sartin for as long as they did? Because it feels good to go to a seminar and have someone tell the world... your world... how good you are.

(Disclaimer: I am not saying that every person who was proclaimed a winner at such a seminar actually was a winner. There was still some snake oil to be sold. But most of the close members were pretty close to what they were portrayed as.)


To make my point in a different direction, many of you know that I would like to be more in "whale business." I am involved with my own group and have consulted for a half-dozen other "corporations."

Believe it or not even THEY share what they are doing, to a point! That "to a point" part is important. Sure, they don't say, "Let me lay out for you what we are doing to make money at the races so that you can go into competition with us." Of course not.

But they do share the general theme and even some specifics of what they are doing. Look at Dana Parham and how he has gone public with what he does. Look back at Bill Benter sharing how he did what he did. He has shared much of his core math work, and much of that for free. Why did he do that?

Everyone who is successful in horse racing wants and needs to share it with somebody besides their wife!


Think about books that are written as more of the same. Admittedly, many of the authors are not as successful as they wish for you to believe; or as successful as you wish they were. That does not mean that they do not have good ideas and that the books will not improve your game.

We should be able to gain helpful knowledge from books. If we can't then we, and this sport, live in a vacuum. Think about it for a minute. If you really buy into the idea that anything that is any good would never be sold or given away, then why ever buy a horse racing book? Why even bother to read what is posted here?

But ask yourself this - How will you learn? For that matter, how have you learned up to now? I'll tell you how. A significant amount of what you learned was communicated to your from someone else. Are you prepared to doubt everyone who ever taught you anything about racing?

If so, then how did you get as far as you have?

I can tell you that I learned huge amounts from:

William Quirin
Dick Schmidt
Howard Sartin
Andy Beyer
Dick Mitchell
Fred Davis


And this is a very incomplete list. I have learned from many more and from my users as well. I have picked up more than a few ideas from this forum.


Lastly, having the belief that nothing of value is ever given away or sold, is kind of like the following contradiction:

1. I always tell the truth.
2. The above sentence is a not true.


In closing, I will just say that the majority of winning players I have known will tell you a lot of what they are doing. They are essentially good human beings. In my experience, most winners in life are like that.


Regards,
Dave Schwartz

[Greyfox]

In closing, I will just say that the majority of winning players I have known will tell you a lot of what they are doing. They are essentially good human beings. In my experience, most winners in life are like that.


Regards,
Dave Schwartz

:ThmbUp: :ThmbUp: Well said Dave. We are on the same page on what you are saying above and the preceding paragraphs that are in your post.

(Good to see you mention William Quirin. I'm not sure if he even gambled very much. He was a mathetmatician student of the game as much as anything else. He made excellent contributions a couple of decades back and then moved on. Not everyone studies horse racing to get rich. )

[Charlie D]

Dave Schwartz, you are one of the many assests at Paceadvantage.com Thank you for taking the time to post.

[Dave Schwartz]

Not everyone studies horse racing to get rich


Really?

[Exotic1]

Dave Schwartz, you are one of the many assests at Paceadvantage.com Thank you for taking the time to post.

Dave,

I'll echo Charlie D's thoughts on your contributions.

[Dave Schwartz]

Thanks, guys. I appreciate the positive feedback.

[Overlay]

First, a small correction. Very few winners explain EXACTLY what they are doing. That is not likely to happen, or at least not without some form of compensation.
That's a key point. Compensation makes it a value-for-value exchange (especially if dissemination doesn't affect durability or profitability).

[thaskalos]

I agree with Markgoldie on this one...

Yes...the books are the most convenient way for a beginner to learn the fundamentals of this game...but why all the false advertisement - even from some of the most prominent names in the game?

"Speed figures are the way, the truth, and the light"..."make the racetrack your own personal ATM"..."invest at the racetrack"..."make a 40%+ ROI on your exotic bets"...the list goes on and on.

Even if a book does contain a couple of useful ideas...they are mixed in with so much misinformation and half-truths...that it takes forever for a beginner to distinguish them.

[therussmeister]

And so, the question as to why a person, with a decided edge in betting horses would wish to explain to others exactly how to duplicate this success is a very legitimate one- golf anaologies notwithstanding. This is a zero sum game. And as one somewhat familiar with publishing remuneration, I can tell you that pay + time + aggravation in the main do not make writing such books very attractive compared to collecting the easy money through betting horses. Here, the owners, trainers, jockies, and the horses themselves do the majority of the hard lifting for you.


Horse racing is not a zero sum game, it is a negative sum game. Unless you can find a track without takeout/breakage.

[formula_2002]

Horse racing is not a zero sum game, it is a negative sum game. Unless you can find a track without takeout/breakage.


or an (edge + rebate)>takeout,breakage..
without hope this board is dead!!! :)

[Jeff P]

Great story Dave.

Thanks, I really enjoyed that.

-jp

.

[Jeff P]

My comments on randomness and databases...

Randomness shows itself constantly. It is present all the time and in nearly everything we do.

With that in mind, I contend the question becomes:

Can randomness be overcome with a database?

I say the answer is without question: yes.

My own use of a racing database is modeled after the way insurance companies use databases to assess historical probabilities and set rates for drivers based on customer demographics.

Consider:

Every insurance company you can name will set the monthly rates for a 19 year old unmarried male driver of a sports car in a densely populated metro area significantly higher than the monthly rates of a 40 year old married female (with children) driving a minivan in a rural area where it never snows.

Why?

Because queries looking at large data samples involving of both types of drivers indicate the 19 year old is far more likely to cause a serious accident than the married 40 year old.

Is randomness involved?

Absolutely.

If you study the data on a micro level you will find plenty of instances where older drivers made bad decisions. You can even find plenty of instances where younger drivers faced potentially deadly circumstances and made good decisions.

However, as data samples become large enough - eventually the law of large numbers begins asserting its effect and you find yourself looking at the way things actually behave.

I'll make the argument that as the law of large numbers kicks in randomness becomes minimized to the point to where it is (almost) completely overcome.

That effect (the law of large numbers) holds true with racing data just as it holds true for auto driver data - or any other type of data you wish to study.

-jp

.

[46zilzal]

I would not have such unbridled confidence in the assessment of past data projecting the future....IF you read this book and The Drunkard's Walk you will understand the big holes in our understanding......I found these works an epiphany and the absolute resolution of a problem that has bothered me since I first walked into the inaugural Oak Tree meeting all those many years ago....

Each race is a mini world unto itself generating an outcome in that moment.

[Jeff P]

Each race is a mini world unto itself generating an outcome in that moment.Absolutely true.

However, tens of thousands of race outcomes - and the law of large numbers begins asserting itself.


-jp

.

[46zilzal]

Absolutely true.

However, tens of thousands of race outcomes - and the law of large numbers begins asserting itself.


.
Well when thousands of races are run at once then that conclusion will override the mini-environment.......Randomness effects every race, every day in bumps. dropped whips. being checked steadied or taken up, going wide, getting stuck behind a pace victim etc etc...NONE of which can ever be predicted by studying millions of races.

[bigmack]

Well when thousands of races are run at once then that conclusion will override the mini-environment.......Randomness effects every race, every day in bumps. dropped whips. being checked steadied or taken up, going wide, getting stuck behind a pace victim etc etc...NONE of which can ever be predicted by studying million of races.
Don't be myopic. You know what Jeff is talking about and if you don't think a retrospection of similar races holds truths, you're gaga.

I like your thought and it holds aqua but you tend to tact for absolutes and oftentimes cut yourself off at the knees.
___________________________

Enjoyed the story as well, Mr. S. From my perspective people that have achieved great things have little to hide in their eagerness to share thoughts. This game is about as tough as anything I've ever seen. If you can make it in this game you have accomplished a very daunting task.

[formula_2002]

from Jeff
I'll make the argument that as the law of large numbers kicks in randomness becomes minimized to the point to where it is (almost) completely overcome

Ok I'll accept the "almost", just like I accept that we have yet to calculate the finite circumference of a circle. But it does not mean it can’t be done, its just that we have not figured it out yet. :)

I’m really going to get myself into a box but here goes.
If every event that is, can be explained as a point between 0 and 1, then as our understanding grows, the “randomness” of the event become less and less until it is completely eliminated.
However, as our understanding grows so do the questions. Eventually we run out of time so a lot of stuff is left on the table.

[formula_2002]

Ok I'll accept the "almost", just like I accept that we have yet to calculate the finite circumference of a circle. But it does not mean it can’t be done, its just that we have not figured it out yet. :)

I’m really going to get myself into a box but here goes.
If every event that is, can be explained as a point between 0 and 1, then as our understanding grows, the “randomness” of the event become less and less until it is completely eliminated.
However, as our understanding grows so do the questions. Eventually we run out of time so a lot of stuff is left on the table.

Just trying to understand myself :)
I don't buy into the following concept.

"Randomness is a concept of non-order or non-coherence in a sequence of symbols or steps, such that there is no intelligible pattern or combination."

from http://en.wikipedia.org/wiki/Randomness.

As I read about Chasos Theory and The Quantum, they both start off by implying that things are very random and then go on seemingly to imply the opposite.
If god does not play dice, its only because he does not understand the game.

[Robert Goren]

Well when thousands of races are run at once then that conclusion will override the mini-environment.......Randomness effects every race, every day in bumps. dropped whips. being checked steadied or taken up, going wide, getting stuck behind a pace victim etc etc...NONE of which can ever be predicted by studying millions of races.You left off your list random bad/good rides by Alan Garica.

[therussmeister]

I would not have such unbridled confidence in the assessment of past data projecting the future....IF you read this book and The Drunkard's Walk you will understand the big holes in our understanding......I found these works an epiphany and the absolute resolution of a problem that has bothered me since I first walked into the inaugural Oak Tree meeting all those many years ago....

Each race is a mini world unto itself generating an outcome in that moment.
When I first read Taleb, along with material dealing with cognitive biases, I would have quit horse racing immediately believing it was impossible to win, except I already had 18 consecutive profitable years.

[Light]

Everything is meant to be. Was it random that you were born or were you meant to be? There are no "accidents". It just looks that way. We don't understand infinity so we call what doesn't fit into our perception of the scheme of things "randomness" or whatever.

I believe everything that we see happening has already happened.That the past present and future exist simultaneously in different dimensions. We've all had Deja Vu experiences and someone who accurately predicts the future cannot possibly know that unless it has already happened . They are just getting signals from another dimension. I have had this experience with horse racing in dreams,that gave me the exacta as I watched them cross the finish line and bet it the next day successfully. Havent had one in a while now. But in my life as a horse player, I've had a handful of "psychic" experiences in horse racing which tells me randomness has its place,but it is an ally of the outcome which is purposeful and meant to be.

[TrifectaMike]

Each race is a mini world unto itself generating an outcome in that moment.

Agreed. That said, doesn't imply randomness. Instead it implies a lack of definitive knowledge. One man's randomness is another man's determinism.

As knowledge increases, randomness decreases.

As knowledge increases that which one considers a random event becomes chaotic...with further knowledge chaotic becomes simplly deterministic.

And of course we can be fooled by randomness, especially when a six sigma case occurs, which eventually will occur.

Until knowledge becomes infinite, we will always be fooled by randomness. Till then probabilty and statistics is all we have at the present to rely on. And it works for us with a probabilty of p.

Mike

[markgoldie]

Goldie your comments suggest that it wasn't just "your friend" who said:

"What impetus could there be for giving away the secret to your success? None. Do we really think we're on the verge of a whale group giving away their programs so that everyone can do what they do? Of course not, and so books tend to be written by losers or possibly the marginally-profitable players with an ego-need to see their name in print."

I find that interesting. Because you opened your original statement giving
Dave Schwartz a compliment on what he wrote. Then you wrote a paragraph, supposedly said by a "friend," that tried to shove the knife into him and others with a velvet sheath as you are aware that he develops programs that help others do better at the track.

Then you do a soft shoe shuffle conceding that these authors may offer some tidbits that are helpful. Of course you don't mention that those tidbits just might help a reasonable horseplayer perhaps become a great one.
And that is what authors do. They give ideas that might be developed and springboarded on similar to the golf coach helping a golfer become better.

Some very good handicappers do not have the temperament to become whales. Their ideas in print might help others move that way. Knocking the marketing cover is also a huge sidestep from calling them "losers."

By the way the books that you mentioned have all been helpful to me.
William Scott is dead so he won't be calling you on your blustering.
You are way off base here. My comments were not directed to Dave in any way. Dave is about as straight up as a person can be as to what he sells. He does not promise to deliver you riches in a bottle.

I did not call all authors or software sellers losers as you suggest. Though I was quoting a friend, since I endorse what he says, you can attribute the comments to me. This makes the question of whether or not he is "imaginary" moot. So I say that these authors are either losers or marginally-profitable players with an ego to see themselves in print. As Dave points out, people like to brag. Fine.

I admit I have read most of the esteemed books on handicapping. I have learned some things from virtually all of them. No doubt. I have also learned from reading the posters on this forum. But when it comes to "how-to" books, handicapping literature is a fraud unless, as I said, it comes with the title "how to make yourself a bit less unprofitable." You can pick up a book on carpentry or cooking, for example, and get exactly what you're looking for. If you follow the outlined steps precisely, you'll get a perfect cabinet or souffle every time. Show me the book on handicapping that lays out the steps which will lead to profits every time. Are there players out there who could do this? Absolutely. Will they? In what I called a "zero-sum game" but have now been corrected to be a "negative-sum game," the answer is no. Granted, all writers of books on handicapping could be profitable players who simply enjoy publishing "teaser" books which are marginally helpful but fall woefully short of producing the ultimate goal. Feel free to draw your own conclusions.

As far as my "blustering": Tossing pejoratives do little to advance any meaningful discussion. If you don't like what I say or how I say it, feel free to ignore my posts.

[Greyfox]

As far as my "blustering": Tossing pejoratives do little to advance any meaningful discussion. If you don't like what I say or how I say it, feel free to ignore my posts.

I just passed along an observation. Your posts are hard to ignore as they usually take up a page or more (if one were to print them.) Occam's razor is avoided.

[markgoldie]

I just passed along an observation. Your posts are hard to ignore as they usually take up a page or more (if one were to print them.) Occam's razor is avoided.
From Merriam Webster: "Bluster": To talk or act with noisy swaggering threats.

To just pass on an an observation: If you don't know the meaning or implication of the words you are using, try not to use them. How's that for Occam's Razor?

[Tom]

"His first work, Fooled by Randomness, was voted by Fortune magazine as one of the 75 smartest books of all time"...

That was just a random vote outcome. The next vote is open to being entirely different, due to the randomness of life.

Good point! :D

[Overlay]

Everyone who is successful in horse racing wants and needs to share it with somebody besides their wife!

Especially if she isn't particularly interested -- at least from a handicapping standpoint. (Any proceeds from the pursuit -- now that's a different story!) :)

[castaway01]

I agree with Markgoldie on this one...

Yes...the books are the most convenient way for a beginner to learn the fundamentals of this game...but why all the false advertisement - even from some of the most prominent names in the game?

"Speed figures are the way, the truth, and the light"..."make the racetrack your own personal ATM"..."invest at the racetrack"..."make a 40%+ ROI on your exotic bets"...the list goes on and on.

Even if a book does contain a couple of useful ideas...they are mixed in with so much misinformation and half-truths...that it takes forever for a beginner to distinguish them.

What you have to remember is that this game is ever-changing. It might not change from the core fundamentals, but when a method becomes well known, by definition it ceases to have much value. So, when you read something written 30 years ago, it might have been true AT THE TIME and not "snake oil", but that doesn't mean it works the same way in 2010. I'm mainly referring to speed figures, but I am loathe to mention that specifically because I don't want to steer this interesting discussion into that dead-end debate again. My point is that when we're dealing with a negative-expectation game, the edges are tiny---what was true in the past may still be wise advice, but no longer profitable. And I think that's what happened to a decent number of books from years gone by. Still, you have to learn the fundamentals, and the wise advice and guidance is still there.

[Greyfox]

From Merriam Webster: "Bluster": To talk or act with noisy swaggering threats.

To just pass on an an observation: If you don't know the meaning or implication of the words you are using, try not to use them. How's that for Occam's Razor?

I know the meaning lad.
bluster (blhttp://img.tfd.com/hm/GIF/ubreve.gifshttp://img.tfd.com/hm/GIF/prime.gifthttp://img.tfd.com/hm/GIF/schwa.gifr)
v. blus·tered, blus·ter·ing, blus·ters
v.intr. 1. To blow in loud, violent gusts, as the wind during a storm.
2. a. To speak in a loudly arrogant or bullying manner.

If the shoe fits.....

[Overlay]

Greyfox and markgoldie,

Pardon me if I'm overstepping, but I see that both of the designated board moderators are offline at the moment. No offense intended to either of you (we're all entitled to our opinions), but would you gentlemen mind taking your back-and-forth non-thread-related discussion to another venue?

Thank you, and now back to our regularly scheduled programming.

[BillW]

Guys,

Keep it civil or you'll both have to sit in the corner.

[bisket]

My comments on randomness and databases...

Randomness shows itself constantly. It is present all the time and in nearly everything we do.

With that in mind, I contend the question becomes:

Can randomness be overcome with a database?

I say the answer is without question: yes.

My own use of a racing database is modeled after the way insurance companies use databases to assess historical probabilities and set rates for drivers based on customer demographics.

Consider:

Every insurance company you can name will set the monthly rates for a 19 year old unmarried male driver of a sports car in a densely populated metro area significantly higher than the monthly rates of a 40 year old married female (with children) driving a minivan in a rural area where it never snows.

Why?

Because queries looking at large data samples involving of both types of drivers indicate the 19 year old is far more likely to cause a serious accident than the married 40 year old.

Is randomness involved?

Absolutely.

If you study the data on a micro level you will find plenty of instances where older drivers made bad decisions. You can even find plenty of instances where younger drivers faced potentially deadly circumstances and made good decisions.

However, as data samples become large enough - eventually the law of large numbers begins asserting its effect and you find yourself looking at the way things actually behave.

I'll make the argument that as the law of large numbers kicks in randomness becomes minimized to the point to where it is (almost) completely overcome.

That effect (the law of large numbers) holds true with racing data just as it holds true for auto driver data - or any other type of data you wish to study.

-jp

.
the insurance analogy is how i attack wagering....

[thaskalos]

If you don't like what I say or how I say it, feel free to ignore my posts. Markgoldie...

I don't know anything about you, and I am not in the habit of dishing out compliments...but if you were to ever write a handicapping book...I will be the first to run out and acquire a copy - regardless of cost.

I have found your posts to be the most thought provoking ones on this entire site...even if you and I did get into a brief disagreement about the virtues of pace handicapping, a while back. :)

The only thing I regret about your posts...is that they don't come forth often enough.

I say this with no disrespect toward Greyfox...whom I happen to hold in high regard.

[Charlie D]

virtues of pace handicapping,


got a link to this discussion thaskalos??

[thaskalos]

got a link to this discussion thaskalos?? Don't you remember Charlie?

I stated at the end of my long winded argument, that "the handicapper who fails to consider pace is - for lack of a better word - handicapped."

You wrote back, and complimented me for the comment.

I don't want to put up the link, in case it is deemed inappropriate and off topic.

[Charlie D]

I've all on remembering details of last race i bet on thaskalos tbh, but your reminding me of my comment, turned on the light :D

[Greyfox]

Guys,

Keep it civil or you'll both have to sit in the corner.

For sure. I just responded to a "Cherry Picked" definition. Let's move on.

When a race runs there are always unpredictable events that take place.
Coming out of the gate there may be bumping.
One horse tangles with another. There is impairment.
Running on, there may well be more impediments, ("clipped heels, " blocked",
"squeezed between" and the list goes on.

The thread starter here by 46zilzal though was:

"Randomness cannot be excluded from handicapping."

The fact of the matter is:

1. The horse that wins the race, wins the race. It's just that simple.

2. In "most instances," barring a major spill, the horse that wins the race figured to win it whether or not you or I saw it coming and was among the most 3 logical contenders, often overcoming gate problems, "squeezed between runners," blocked in the stretch etc.
Yes, "clipped heels" can happen. Are they random? Sometimes.
(That randomness might be more predictable than you think depending upon jockey or barn switches.)

3. If the horse was a longshot, 95% of the time, the answer lies in the
Past Performances or The "Previous Trips." The clues are there, whether or not we can decipher them before the race is a challenge.
But there are, "Logical Longshots," if you can find them.

4. The vast majority of races are not and never will be "random events."

Whether or not we can predict races, is why we play the game and gamble.
No one yet in this thread has explained why we should include "randomness" in handicapping?
Theoretically, a random number, is exactly that.
If races were truly that way, we'd just throw dice and take our selections from there.

But races are not that way. Various pace and speed factors give a "rough" guides as to who will compete, and who might show up late and may pass tiring runners.

Play randomly and you will lose.

So to 46Zilzal who started this thread:

Two Questions must be posed independant of "The Drunkard's Walk":

"If randomness is so important in handicapping how do you include it?"

How do you include "randomness" in your wagering?"

[Overlay]

"If randomness is so important in handicapping how do you include it?"

How do you include "randomness" in your wagering?"
To me, the answers to those questions are addressed as follows:

1) assign a probability of winning to each entrant based on available, known information, without excluding or eliminating any entrant out of hand (i.e. not even bothering to assign a probability to them), and also without assigning a 0% or 100% probability to any entrant.

2) size wagers based on the disparity between the odds corresponding to your assigned probability for each horse and the odds assigned to the horse by the public.

If you follow those steps, then I believe that randomness will have no overall effect. Yes, it will occur. Sometimes that will work in your favor, and sometimes it won't, but if you've followed the procedure above, those events will even out over time. And (in my opinion), since they're random, then by definition nothing could be done to change or affect them, in any case. (If it could, then (again, in my opinion) the events would not be random.)

[Light]

As knowledge increases, randomness decreases.


You hit the nail on the head. A supreme being would certainly not attribute as many events (if any) to randomness as we do.Cosmic consciousness would have much more insight.

I was once told by a jockey agent that what looked like trouble for his clients horse getting squeezed at the start was not random. All the jocks had agreed in the jock room to block this invader from winning.This was a well calculated plan as they also pinned the horse in on the rail. To us it looked like a horse getting into random trouble.That assumption couldn't have been farther from the truth. This is an obvious example of why the perception of randomness is totally subjective and might not even exist at all except in our minds.

I think there needs to be no distinction between losing and losing by randomness. Because the opposite is also true. If you win,you can also win via so called "randomness". To attribute losses in horse racing to randomness is a cover up. Its an extension of 'woulda","coulda", "shoulda".

[Greyfox]

In post #89 of this thread I asked:

So to 46Zilzal who started this thread:

Two Questions must be posed independant of "The Drunkard's Walk":

"If randomness is so important in handicapping how do you include it?"

How do you include "randomness" in your wagering?

Overlay has answered:


To me, the answer to those questions are:

1) assign a probability of winning to each entrant based on available, known information, without excluding or eliminating any entrant out of hand (i.e. not even bothering to assign a probability to them), and also without assigning a 0% or 100% probability to any entrant.

2) size wagers based on the disparity between the odds corresponding to your assigned probability for each horse and the odds assigned to the horse by the public.

If you follow those steps, then I believe that randomness will have no overall effect. Yes, it will occur. Sometimes that will work in your favor, and sometimes it won't, but if you've followed the procedure above, these events will even out over time. And (in my opinion), since they're random, then by definition nothing could be done to change or affect them. (If it could, then (again, in my opinion) the events would not be random.)


:ThmbUp: Excellent response. But that's wagering, ....not necessarily handicapping.

I appreciate very well that Overlay knows where of he speaks.
Nevertheless, at no point in my handicapping of a particular race, do I ever consider building in "randomness."
Overlay is absolutely correct in including it in your "odds making and value plays."
Having said that: "Show me how "randomness" is a handicapping tool?
It is a "wagering tool."

The initial thread stated: "Randomness cannot be excluded from handicapping.


Overlay, has perhaps pointed out that:
"Randomness cannot be excluded from wagering."

Thankyou Overlay. :ThmbUp:
GF

[formula_2002]

Agreed. That said, doesn't imply randomness. Instead it implies a lack of definitive knowledge. One man's randomness is another man's determinism.

As knowledge increases, randomness decreases.

As knowledge increases that which one considers a random event becomes chaotic...with further knowledge chaotic becomes simplly deterministic.

And of course we can be fooled by randomness, especially when a six sigma case occurs, which eventually will occur.

Until knowledge becomes infinite, we will always be fooled by randomness. Till then probabilty and statistics is all we have at the present to rely on. And it works for us with a probabilty of p.

Mike

Well said. I can support that.

[Charlie D]

Your oddsline is derived from handicapping so therefore you are probably taking into account randomness without knowing it


value = percieved edge btw.

[Dave Schwartz]

Nevertheless, at no point in my handicapping of a particular race, do I ever consider building in "randomness."

I do. In some of my A.I. approaches randomness is a huge part.

[Charlie D]

Dave


How can you take into account randomness, if you have no idea which variable will or will not be random??

[Greyfox]

I do. In some of my A.I. approaches randomness is a huge part.

Expansion is begged of that post.
(I assume A.I. = Artificial Intelligence?)
Chaos races perhaps?

[thaskalos]

I have read Taleb's book...but I have a hard time seeing how his views apply to handicapping.

Yes...I agree with his main point...which seems to be that most specific forecasting is pointless, because unexpected events are likely to occur, and prove our forecasts wrong...but in handicapping, our job is not to "forecast" the outcome of the race with precision. There are many unforeseen events during the course of the race, which can easily upset even the best laid plans.

Our "real" job as handicappers, is to be more accurate with our forecasts THAN OUR COMPETITION. Whether the outcome of the race is truly predictable or not is immaterial.

It is virtually impossible to consistently predict the outcome of football games as well.
Luckily...all us handicappers have to do is to beat the "betting line".

[Charlie D]

Our "real" job as handicappers, is to be more accurate with our forecasts THAN OUR COMPETITION.





Can't argue with that.

[Charlie D]

More i think about the last post by thaskalos, the more i think forget Taleb and his views. Get yourself off and increase your knowledge and understanding of how and why horse A, B, C won and how and why horse D, E, F lost.

As this knowledge will help you make better forecasts.

[nalley0710]

When I was geting my finance degree all the academics were talking about the efficient market hypothesis and saying technical analysis was b.s., now everything is random. I guess things do seem random when you look at 3 or 4 variables when everything is composed of 1000's of variables. Sounds like just another excuse for being lazy and ignorant.

[baldvin]

This is a zero sum game.

no it is not. at 15 to 30% rake it is not close to Zero sum.

[Dave Schwartz]

no it is not. at 15 to 30% rake it is not close to Zero sum.

It is if you count the track and the state as participants.
:lol:

[Light]

Randomness is an intelligent energy that you have no comprehension about and want to apply to horse racing. Good luck with that.

[46zilzal]

More i think about the last post by thaskalos, the more i think forget Taleb and his views. Get yourself off and increase your knowledge and understanding of how and why horse A, B, C won and how and why horse D, E, F lost.

As this knowledge will help you make better forecasts.
funny stuff as per usual from this source. NEVER investigate the source yet denigrate the information.....The "gut reaction" world keeps enlarging.

You should read the chapter on narratives as you have no idea what this author, as well as many other cognitive psychologists, have discovered in that arena.

[Charlie D]

I do not need Taleb or his views at Saratoga, what i need is to be able to forecast better than you and others, which tbh is not that hard to do.

[Charlie D]

Mr Zil here is free advice for you


Spend more time WATCHING the races instead of reading Mr Taleb etc as the former is where the understanding will be learnt and where the knowledge will be gained.

[WinterTriangle]

And despite all of this randomness, how do we account for the fact that year after year at track after track, the winning percentage of favorites hovers right around that 30% mark?

Not sure how that refutes randomness? :confused: Because randomness doesn't at all refute that patterns exist. And using data to better predict an outcome doesn't refute randomness, either.

We dislike paradox--- that there is both randomness and order/pattern. In the small uiniverse of particle physics, we now know for certain that randomness and chance exist---yet we like to think of the larger universe as *ordered*. Scientists live with paradox.

Mostly humans are uncomfortable with that, and the human brain prefers pattern seeking. Hence, there seems to be a lot of "pattern seeking" among hanidcappers where the brain tries to see a pattern where none exists. (trainer / jock is "hot" or "cold", horse is "due", pitcher is on a streak", horse won 4 of 5, so will win the 6th).

At any rate, I believe most bettors are more interested in that other 70% (rather than that 30% which has already been talked about as leading to the poor house without pushing thru huge amt's of $$ and getting rebates). And perhaps those who aren't able to play the game like whales aren't successful because instead of seeking their own verification of how this works they rely on somebody else's dogma----when many of their biggest wins are often arrived at by using counterintuitive approaches and not thinking the same way everyone has been taught to think, because the horse that wins doesn't do it according to the dogma.


However, in horse racing there are past performances from which you can gather facts (as Mark stated "form means something" ) This reduces the plain old luck element or randomness of the event somewhat and increases the skill element.

Basically, you're saying that "Luck is labouring under correct knowledge” or, as Pasteur said, and Eric Hoffer as well, "Chance favours the prepared mind”. Which I agree with.

However, none of that refutes randomness. :) Because, unless an outcome is completely predetermined, then one cannnot rule out randomness. Just as 30% of favorites win on tracks all over, I see randomness in the same proportions every day on every track.

Spend more time WATCHING the races instead of reading Mr Taleb etc as the former is where the understanding will be learnt and where the knowledge will be gained.

Charlie, why make it either/or? I have often found that an immersion in other fields (reading in other domains) directly improves my perspective, my observation of subtlies, as well as my ability to make decisions. Picking a horse involves all thos things. ;)

[WinterTriangle]

Our "real" job as handicappers, is to be more accurate with our forecasts THAN OUR COMPETITION. Whether the outcome of the race is truly predictable or not is immaterial.

well said. :jump:

[Charlie D]

WT

Don't think anyone stated random events do not exist, what they are siaying though is your time will be better spent understanding how and why a horse race is won and lost than reading about randomness, arguing toss on internet forums about randomness


If you or anyone else disagrees then thats ok I'll meet you at Saratoga betting market:)

[formula_2002]

WinterTriangle wrote


We dislike paradox--- that there is both randomness and order/pattern. In the small uiniverse of particle physics, we now know for certain that randomness and chance exist---yet we like to think of the larger universe as *ordered*. Scientists live with paradox.

If you would, please give me an explicite reference (experiment) that would demonstrate this randomness in the world of particle physics.

[46zilzal]

WinterTriangle wrote




If you would, please give me an explicite reference (experiment) that would demonstrate this randomness in the world of particle physics.

It is called quantum mechanics.....Read Capra's The Tao of Physics and he can explain it to you.

or superficially here: http://www.xomba.com/quantum_mechanics_religion_free_will_purpose_and_h uman_events_comprehensive_view_each

"Over a century ago Max Planck presented his Quantum Theory which for the first time gave man an understanding of how things work on the atomic level. What was the most radical idea in the entire theory was that there was a randomness and not predictability to the universe. Thus it said that the universe was not order but disorder and to the degree that predictability was not possible. This created a great deal of debate because it was such a radical departure from Newtonian physics that until Planck was the guideline for physicists, but this was totally inadequate for predicting the motion and behavior of atomic particles which required Planck’s amendment to the realm of atomic physics. Decades later Werner Heisenberg proved Planck was correct and perfected the “uncertainty principle” as a platform for quantum mechanics."

"It is a fact ever since the advent of quantum that what occurs on the atomic level is not predictable and why it works this way becomes a matter of chaos since we have no way of ever predicting what will happen within that sphere where we know the photons will strike. Thus atoms come and go unpredictably while their behavior patterns are just as chaotic."

[formula_2002]

It is called quantum mechanics.....Read Capra's The Tao of Physics and he can explain it to you.

or superficially here: http://www.xomba.com/quantum_mechanics_religion_free_will_purpose_and_h uman_events_comprehensive_view_each

"Over a century ago Max Planck presented his Quantum Theory which for the first time gave man an understanding of how things work on the atomic level. What was the most radical idea in the entire theory was that there was a randomness and not predictability to the universe. Thus it said that the universe was not order but disorder and to the degree that predictability was not possible. This created a great deal of debate because it was such a radical departure from Newtonian physics that until Planck was the guideline for physicists, but this was totally inadequate for predicting the motion and behavior of atomic particles which required Planck’s amendment to the realm of atomic physics. Decades later Werner Heisenberg proved Planck was correct and perfected the “uncertainty principle” as a platform for quantum mechanics."

"It is a fact ever since the advent of quantum that what occurs on the atomic level is not predictable and why it works this way becomes a matter of chaos since we have no way of ever predicting what will happen within that sphere where we know the photons will strike. Thus atoms come and go unpredictably while their behavior patterns are just as chaotic."


I've read about it :rolleyes: . First time was back in the ealry 50's, most recently last month in "Quantum"
Even read some of Fenyman's light experiments.
All that said, I'd still like an explicite reference (experiment)

[markgoldie]

no it is not. at 15 to 30% rake it is not close to Zero sum.
Already corrected myself in post #75. Sorry for the mis-speak.

Not sure how that refutes randomness? Because randomness doesn't at all refute that patterns exist. And using data to better predict an outcome doesn't refute randomness, either.

Just re-read the definition of "randomness." Not really sure how a clearly definable pattern like 30% winning favorites does not indicate a lack of randomness. Yes, 70% of favorites lose, so we would expect that their selection is going to be more wrong than right. We don't expect 100% winners because that would be "certainty." But even in a relatively short-term sample, the 30% number holds up well. So I fail to see how horse-race outcomes can be considered random. There are elements of uncertainty, no doubt, but "random" does not seem to describe the overall picture.

I believe everything that we see happening has already happened.That the past present and future exist simultaneously in different dimensions. We've all had Deja Vu experiences and someone who accurately predicts the future cannot possibly know that unless it has already happened . They are just getting signals from another dimension. I have had this experience with horse racing in dreams,that gave me the exacta as I watched them cross the finish line and bet it the next day successfully. Havent had one in a while now. But in my life as a horse player, I've had a handful of "psychic" experiences in horse racing which tells me randomness has its place,but it is an ally of the outcome which is purposeful and meant to be.

Love this kind of philosophical insight, which I share. If there was a computer infinitely large and with perfect access to all relevant data, then it might compute all outcomes with 100% certainty. Nothing would be truly random. Since we cannot conceive of such a computer, we can substitute the metaphor of God. Because of God's ability to access and process every bit of information, then there is one and only one way in which all of reality must unfold. If this is true, then the future has already happened in a very real sense. It has happened because nothing can prevent it from happening and as you say, the past, present, and future simply co-exist in different dimensions. For horse players, this means that the results of the 5th at Del Mar were decided long ago- at the beginning of time itself, whenever that was.

The famous quote from Einstein in which he says, "God does not play dice," has been roundly recognized as refuted by Planck and quantum mechanics. But I'm with Einstein. What looks uncertain on the micro level is not random at all, but simply operating on a scale which we cannot understand or measure.

[46zilzal]

Like many many examples in his books of those who try to describe the future based upon the very weak understanding of the past, you are missing the boat again. Taleb gives a great example about an ice cube. When you see a puddle of water on the table, its being an ice cube originally is one of MANY scenarios that could have occurred. Even the backwards description of events is severely flawed in our comprehension.

You can have data until the cows come home and can never predict a fall, a breakdown, a bump, a horse in tight, etc etc.

The way to better prepare for a wager is to consider the random in creating wagers.

Lets say you track a certain factor that lead to 35% WINNERS. How many of those having that factor in common were actually aided in that win by a random event during that race? The only other speed could have missed the break, the big favorite could have gone lame, the 2nd choice may have been behind a wall of horses. In the next contest another set of factors could have biased the outcome. Cause and effect complacency is alive and well......Correlation has never meant causation and never will.
This tunnel vision of races lead to financial ruin and rarely hitting the home run.

[TrifectaMike]

It is called quantum mechanics.....Read Capra's The Tao of Physics and he can explain it to you.

or superficially here: http://www.xomba.com/quantum_mechanics_religion_free_will_purpose_and_h uman_events_comprehensive_view_each

"Over a century ago Max Planck presented his Quantum Theory which for the first time gave man an understanding of how things work on the atomic level. What was the most radical idea in the entire theory was that there was a randomness and not predictability to the universe. Thus it said that the universe was not order but disorder and to the degree that predictability was not possible. This created a great deal of debate because it was such a radical departure from Newtonian physics that until Planck was the guideline for physicists, but this was totally inadequate for predicting the motion and behavior of atomic particles which required Planck’s amendment to the realm of atomic physics. Decades later Werner Heisenberg proved Planck was correct and perfected the “uncertainty principle” as a platform for quantum mechanics."

"It is a fact ever since the advent of quantum that what occurs on the atomic level is not predictable and why it works this way becomes a matter of chaos since we have no way of ever predicting what will happen within that sphere where we know the photons will strike. Thus atoms come and go unpredictably while their behavior patterns are just as chaotic."

You guys are getting into some really deep chit. Well past my grade of a high school education.

However, if I may, I'd like to make some points.

Point1 - "...no way of ever predicting"

I think a really, really good scientist would never, never say such a thing. Maybe he'd say with the current state of scientific knowledge, we are unable to predict....

Point2 - ...Thus atoms come and go unpredictably while their behavior patterns are just as chaotic...

Maybe we don't understand what the atom is doing, and when photons strick, etc. But it wasn't too long ago that we believed that many systems that we thought to random and unpredictable where actually deterministic (Chaos Theory).

Point3- Look around you. Newtonian Physics has served us well...automobiles, space travel, oh even this little thing called a computer...imagine a world without calculus.

Now, I know all you scientist will take me to task. My answer... what can you expect from someone with a high school education... even a great one.

Mike

[46zilzal]

Quantum mechanics like life tends to be simplified with a narrative that fits you cognitive requirements of your brain that everything has a discernible cause and effect....That does not happen all the time

[formula_2002]

Now, I know all you scientist will take me to task. My answer... what can you expect from someone with a high school education... even a great one.

if you're from NY its either;

Tech
Stuyversant
Bronx

Tech'55

[TrifectaMike]

if you're from NY its either;

Tech
Stuyversant
Bronx

Tech'55

Tech'68 ...we had HP mini's, which we programmed in assembler and machine code, and always the trusted slide rule, They were good times.... a plane in school, foundry and who can forget the belt jungle machine shop.

Mike

[TrifectaMike]

The way to better prepare for a wager is to consider the random in creating wagers.

Lets say you track a certain factor that lead to 35% WINNERS. How many of those having that factor in common were actually aided in that win by a random event during that race? The only other speed could have missed the break, the big favorite could have gone lame, the 2nd choice may have been behind a wall of horses. In the next contest another set of factors could have biased the outcome. Cause and effect complacency is alive and well......Correlation has never meant causation and never will.
This tunnel vision of races lead to financial ruin and rarely hitting the home run.

You are one confused puppy. You've learned some "new" scientific sounding terms. You are not saying anything most of us don't already know. I suggest you take a few steps back and learn something about point forcasting and forcasting distributions. Remember, this is horse racing., and not the Big Bang Theory.

Mike

[46zilzal]

You are one confused puppy. You've learned some "new" scientific sounding terms. You are not saying anything most of us don't already know. I suggest you take a few steps back and learn something about point forcasting and forcasting distributions. Remember, this is horse racing., and not the Big Bang Theory.

Mike
I always laugh a good one when people COMPLETELY IGNORANT of what I am referring to ( I will wager you have never touched a book relating to what I am talking about here) comment with such certainty on something they know NOTHING ABOUT!!!

New scientific terms???? Pal this has been part of the evaluations since about the time I seriously began following the horses...HINT Pincay had just come to California.

It has just taken a long while before I was able to find published confirmation to the ideas I independently observed while following the races first as a "at arms length" grandstander and now as part of the game first hand.

Now I understand how and why the national IQ is in free fall. GUT reaction out trumps scientific evaluation.

[TrifectaMike]

I always laugh a good one when people COMPLETELY IGNORANT of what I am referring to ( I will wager you have never touched a book relating to what I am talking about here) comment with such certainty on something they know NOTHING ABOUT!!!

New scientific terms???? Pal this has been part of the evaluations since about the time I seriously began following the horses...HINT Pincay had just come to California.

It has just taken a long while before I was able to find published confirmation to the ideas I independently observed while following the races first as a "at arms length" grandstander and now as part of the game first hand.

Now I understand how and why the national IQ is in free fall. GUT reaction out trumps scientific evaluation.

Dear Sir,

I have in front of me a copy of your "bibles",Fooled by Randomness, and The Drunkards Walk. Don't sound so superior.Yes, but more importantly I also have a very nice copy of a 1904 edition of "Elements of The Differential and Integral Calculus by Longley.

And next to it I have copy Probability, Random Variables and Stochastic Processes" by Papoluis for which I solved every single problem as a grad student.

I won't go on, because you'll sound even more foolish.

I was being nice.

Mike

[formula_2002]

Tech'68 ...we had HP mini's, which we programmed in assembler and machine code, and always the trusted slide rule, They were good times.... a plane in school, foundry and who can forget the belt jungle machine shop.

Mike
I remember it all quite vididly, except for the HP's.
We were still using wooden T Squares for drafting.
They were good days for me..
I still have thePhysics hand book.

[Dave Schwartz]

How can you take into account randomness, if you have no idea which variable will or will not be random??

I use a randomized finish position.

Suppose you have a finish that looks like this:

1st by head
2nd head back
3rd 1/2 back
4th 3/4 back


If this race ran 100 times I do not believe that the order would be 1-2-3-4 each time. Thus, I take each race and randomly add/subtract lengths to get some new orders of finish. Each race is used in the database 100 times.

Thus, #1 might win 50 times, #2 might win 30 times, #3 might win 15 times and #4 might win 5 times.

[TrifectaMike]

I use a randomized finish position.

Suppose you have a finish that looks like this:

1st by head
2nd head back
3rd 1/2 back
4th 3/4 back


If this race ran 100 times I do not believe that the order would be 1-2-3-4 each time. Thus, I take each race and randomly add/subtract lengths to get some new orders of finish. Each race is used in the database 100 times.

Thus, #1 might win 50 times, #2 might win 30 times, #3 might win 15 times and #4 might win 5 times.

Randomly add/subtract with which distribution?

Mike

[46zilzal]

If ten horses raced every 30 days for a year: EACH contest might be very different because of form cycles, post position draws, differing riders etc. The conditions will change each race no matter having the same horses. One might be having splint trouble another a small quarter crack and a rider could be getting over a bruised shoulder in the 5th iteration that was not there at the outset. It is just like the weather in the original chaos experiment by Lorenz "sensitive dependence upon initial conditions" can make wild variations down the line.

The very nature of randomness would effect one or many of these horses., RANDOMLY without the ability to see which would have their chances improved or which diminished. ANY TIME an iteration of the same thing occurs there is a large chance that random variation can and will effect the outcome.

[Greyfox]

ANY TIME an iteration of the same thing occurs there is a large chance that random variation can and will effect the outcome.

Agreed. That applies to my golf swing for sure.:D

[Native Texan III]

Randomly add/subtract with which distribution?

Mike

If it has a distribution, it is not random.
If it is truly random, it is unpredictable in detail.

[46zilzal]

Dear Sir,

I have in front of me a copy of your "bibles",Fooled by Randomness, and The Drunkards Walk. Don't sound so superior.

Mike
Funny as one would never have guessed it by your response. I suggest you read it again especially the forward to the Drunkard's Walk where the author tells the story of the heights of randomness when his father or grandfather was saved in a concentration camp by the cook's random need for an assistant.

"sensitive dependence on initial conditions"

[46zilzal]

If it has a distribution, it is not random.
If it is truly random, it is unpredictable in detail.
Another drowning in the dogma

[TrifectaMike]

If it has a distribution, it is not random.
If it is truly random, it is unpredictable in detail.

What does that mean? Please clarify for me.

Mike

[Cratos]

Another drowning in the dogma

Please define which randomness you are speaking of:

• Statistically randomness

• Pseudo-randomness

• Global randomness

• Local randomness

[TrifectaMike]

Let's talk about random sequences.

Let's suppose that you can achieve a win rate 0f 50% This is very similar to
flipping a coin. The probability of a L is equal to a W.

Let's go further and look at a sequence of L's

LLLLL

Now, let's define another sequence

LWLLW

The question is...

Which one of these two sequences would you predict would occur first
(or occur with equal probability) and why?

This is not a meaningless exercise.
I'll explain why at a later date.

Mike

[formula_2002]

I use a randomized finish position.

Suppose you have a finish that looks like this:

1st by head
2nd head back
3rd 1/2 back
4th 3/4 back


If this race ran 100 times I do not believe that the order would be 1-2-3-4 each time. Thus, I take each race and randomly add/subtract lengths to get some new orders of finish. Each race is used in the database 100 times.

Thus, #1 might win 50 times, #2 might win 30 times, #3 might win 15 times and #4 might win 5 times.

Dave, perhaps this what some of the "randomness" supporters are referring to.
Information with no value being employed to determine who knows what?
now if you say that #1 won 50% of the time and the won 30% of the time..etc
then you have valued information that one can use in a statistical manner.

[TrifectaMike]

Please define which randomness you are speaking of:

• Statistically randomness

• Pseudo-randomness

• Global randomness

• Local randomness

None of the above.

He's stuck on casuality.

[Greyfox]

[QUOTE=TrifectaMike

Mike[/QUOTE]

I'll bite. I'd intuitively predict
LWLLW.

The other is quite possible but less probable. The frequency of the one above happening is going to be higher.

[TrifectaMike]

I'll bite. I'd intuitively predict
LWLLW.

The other is quite possible but less probable. The frequency of the one above happening is going to be higher.

At a 50% rate aren't all sequences equally likely?

What is your rational besides intuition?

Mike

[Tom]

The Drunkard's Walk.....I'm intrigued. :p

[46zilzal]

The Drunkard's Walk.....I'm intrigued. :p
Also called the random walk. If you were to track the movement of a drunk while walking home from the pub, the idea is that you could not predict the multiple gyrations in that overall path from a to b.

[TrifectaMike]

Also called the random walk. If you were to track the movement of a drunk while walking home from the pub, the idea is that you could not predict the multiple gyrations in that overall path from a to b.

In some cities the gyrations would be more predicable than the terminal point b.

Mike

[46zilzal]

In some cities the gyrations would be more predicable than the terminal point b.

Mike
I was under the assumption that a was the pub and b was the person's home.

[Pell Mell]

It seems to me that this has been a very long debate to try to prove or disprove what all horseplayers already know: "Murphy's Law" is alive and well. :D

[Greyfox]

At a 50% rate aren't all sequences equally likely?

What is your rational besides intuition?

Mike


For an individual flip the probability is .50.
For a series on an unbiased coin that will not be the case.
Although I've seen a roulette wheel come up 10 reds in a row,
I suspect there is a formula where for a serial run the probability is multiplied by itself such as .5 x .5 x.5...... Hence one would not suspect 10 reds in a row would be highly improbable.

[Cratos]

For an individual flip the probability is .50.
For a series on an unbiased coin that will not be the case.
Although I've seen a roulette wheel come up 10 reds in a row,
I suspect there is a formula where for a serial run the probability is multiplied by itself such as .5 x .5 x.5...... Hence one would not suspect 10 reds in a row would be highly improbable.

Since all flips are independent events then each flip remains at 50% and the Law of Large Numbers states as N get large the outcome will approach 50% heads and 50% tails; it doesn’t matter if you have a sequence of all heads that is x-long because there will eventually be a sequence of tails of equal or greater length as N becomes large.

[Greyfox]

Since all flips are independent events then each flip remains at 50% and the Law of Large Numbers states as N get large the outcome will approach 50% heads and 50% tails; it doesn’t matter if you have a sequence of all heads that is x-long because there will eventually be a sequence of tails of equal or greater length as N becomes large.

On that we agree. However, the number of times you can flip 5 heads in a row,
will be lesser than the number of times you will have a mixed bag over that large sample.

[Cratos]

On that we agree. However, the number of times you can flip 5 heads in a row,
will be lesser than the number of times you will have a mixed bag over that large sample.

Aren't you mixing distributions?

[Greyfox]

Aren't you mixing distributions?

No. The original question did not ask what are the chances of flipping either a head or a tail in a LLLLL sequence.
We know that it's fifty/fifty.
He asked which sequence would likely appear first. I opted for the mixed bag one suspecting that over time the frequency of the mixed bag one will probably appear more often. Five coins is too small of course to make a generalization from. But if we had say 1000 coins tosses we'd see the mixed bag types appearing more frequently than any five in a row sequence.

[speculus]

First up, I have read Taleb's Fooled by Randomness.

For those of you who have not read it, the main theme of the book is this:
we need not applaud any great (as in profitable) investing performance in the stock market because the super performance may be pure accident, a random event, only waiting to be 'corrected' in the future. The market's current state is a random event, and the same performance may look lousy at a future market state (another random event). In short, there is too much randomness to certify any method as a winning method for the long term, or any investor as a super investor all the time. [So Mr Warren Buffett is just plain lucky that random events and random states of the stock market over the past 40 years have made his investments look good, and poor Mr John Appleseed is plain unlucky if he lost money during the same period. Let's not extol Mr Buffett nor ridicule Mr Appleseed].

My personal opinion about the book: Pure BS filled with erroneous premises and specious argument. Mr Taleb comes across as an armchair intellectual who, in a visceral way, hates investing brilliance on principle [could it be a case of sour grapes? A point worth investigating.] The book, trumpeted by the media of our day as a Classic, has enabled Taleb to outlive his 15 minutes of fame by many more years, and that to me seems to be the ONLY achievement of this book.

Luckily for students of probability, Buffett had foreseen the arrival of clowns like Taleb and their objections well in advance. As early as 1984, he had given a talk at Columbia University which started thus:

The Superinvestors of Graham-&-Doddsville

"Is the Graham and Dodd "look for values with a significant margin of safety relative to prices" approach to security analysis out of date? Many of the professors who write textbooks today say yes. They argue that the stock market is efficient; that is, that stock prices reflect everything that is known about a company's prospects and about the state of the economy. There are no undervalued stocks, these theorists argue, because there are smart security analysts who utilize all available information to ensure unfailingly appropriate prices. Investors who seem to beat the market year after year are just lucky. "If prices fully reflect available information, this sort of investment adeptness is ruled out," writes one of today's textbook authors.

Well, maybe. But I want to present to you a group of investors who have, year in and year out, beaten the Standard & Poor's 500 stock index. The hypothesis that they do this by pure chance is at least worth examining. Crucial to this examination is the fact that these winners were all well known to me and pre-identified as superior investors, the most recent identification occurring over fifteen years ago. Absent this condition - that is, if I had just recently searched among thousands of records to select a few names for you this morning -- I would advise you to stop reading right here. I should add that all of these records have been audited. And I should further add that I have known many of those who have invested with these managers, and the checks received by those participants over the years have matched the stated records.

Before we begin this examination, I would like you to imagine a national coin-flipping contest. Let's assume we get 225 million Americans up tomorrow morning and we ask them all to wager a dollar. They go out in the morning at sunrise, and they all call the flip of a coin. If they call correctly, they win a dollar from those who called wrong. Each day the losers drop out, and on the subsequent day the stakes build as all previous winnings are put on the line. After ten flips on ten mornings, there will be approximately 220,000 people in the United States who have correctly called ten flips in a row. They each will have won a little over $1,000.

Now this group will probably start getting a little puffed up about this, human nature being what it is. They may try to be modest, but at cocktail parties they will occasionally admit to attractive members of the opposite sex what their technique is, and what marvelous insights they bring to the field of flipping.

Assuming that the winners are getting the appropriate rewards from the losers, in another ten days we will have 215 people who have successfully called their coin flips 20 times in a row and who, by this exercise, each have turned one dollar into a little over $1 million. $225 million would have been lost, $225 million would have been won.

By then, this group will really lose their heads. They will probably write books on "How I turned a Dollar into a Million in Twenty Days Working Thirty Seconds a Morning." Worse yet, they'll probably start jetting around the country attending seminars on efficient coin-flipping and tackling skeptical professors with, " If it can't be done, why are there 215 of us?"

By then some business school professor will probably be rude enough to bring up the fact that if 225 million orangutans had engaged in a similar exercise, the results would be much the same - 215 egotistical orangutans with 20 straight winning flips.

I would argue, however, that there are some important differences in the examples I am going to present. For one thing, if (a) you had taken 225 million orangutans distributed roughly as the U.S. population is; if (b) 215 winners were left after 20 days; and if (c) you found that 40 came from a particular zoo in Omaha, you would be pretty sure you were on to something. So you would probably go out and ask the zookeeper about what he's feeding them, whether they had special exercises, what books they read, and who knows what else. That is, if you found any really extraordinary concentrations of success, you might want to see if you could identify concentrations of unusual characteristics that might be causal factors.

Scientific inquiry naturally follows such a pattern. If you were trying to analyze possible causes of a rare type of cancer -- with, say, 1,500 cases a year in the United States -- and you found that 400 of them occurred in some little mining town in Montana, you would get very interested in the water there, or the occupation of those afflicted, or other variables. You know it's not random chance that 400 come from a small area. You would not necessarily know the causal factors, but you would know where to search.

I submit to you that there are ways of defining an origin other than geography. In addition to geographical origins, there can be what I call an intellectual origin. I think you will find that a disproportionate number of successful coin-flippers in the investment world came from a very small intellectual village that could be called Graham-and-Doddsville. A concentration of winners that simply cannot be explained by chance can be traced to this particular intellectual village.

Conditions could exist that would make even that concentration unimportant. Perhaps 100 people were simply imitating the coin-flipping call of some terribly persuasive personality. When he called heads, 100 followers automatically called that coin the same way. If the leader was part of the 215 left at the end, the fact that 100 came from the same intellectual origin would mean nothing. You would simply be identifying one case as a hundred cases. Similarly, let's assume that you lived in a strongly patriarchal society and every family in the United States conveniently consisted of ten members. Further assume that the patriarchal culture was so strong that, when the 225 million people went out the first day, every member of the family identified with the father's call. Now, at the end of the 20-day period, you would have 215 winners, and you would find that they came from only 21.5 families.

Some naive types might say that this indicates an enormous hereditary factor as an explanation of successful coin-flipping. But, of course, it would have no significance at all because it would simply mean that you didn't have 215 individual winners, but rather 21.5 randomly distributed families who were winners.

In this group of successful investors that I want to consider, there has been a common intellectual patriarch, Ben Graham. But the children who left the house of this intellectual patriarch have called their "flips" in very different ways. They have gone to different places and bought and sold different stocks and companies, yet they have had a combined record that simply cannot be explained by the fact that they are all calling flips identically because a leader is signaling the calls for them to make. The patriarch has merely set forth the intellectual theory for making coin-calling decisions, but each student has decided on his own manner of applying the theory......

[Excerpted from The Superinvestors of Graham-&-Doddsville, a talk given by Warren E Buffett at Columbia Univeristy in 1984]

For complete transcript, click here. (http://www.tilsonfunds.com/superinvestors.html) .

[Dave Schwartz]

Geez, Spec. I was just about to tell you how much I agreed with YOU when I discovered it was someone else's writing.
:lol:

Nevertheless, I like your presentation. :ThmbUp:


Dave

[46zilzal]

First up, I have read Taleb's Fooled by Randomness.



My personal opinion about the book: Pure BS filled with erroneous premises and specious argument. Mr Taleb comes across as an armchair intellectual who, in a visceral way, hates investing brilliance on principle [could it be a case of sour grapes?
you are in a very small minority in that opinion. Ranked by fortune magazine as one of the 75 best books in their list.

"Randomness is so pervasive, says Taleb, that in many walks of life it is impossible to tell who is a fool and who is a genius. But the longer a fool stays in the game, the more likely he is to be exposed. Over the past year, many top executives have been kicked out after their companies
stumbled. Is it possible that men like John Mayo at Marconi and Peter Bonfield at BT were simply lucky fools whose time was up?"
w w w . p r o s p e c t - m a g a z i n e . c o . u k Page 2 of 2


Same was stated in The Drunkards Walk when the author did a simple test. He ranked the top 50 investment firms by projection. He then ranked them in the same order for their ability to project the next five years and the resultant graph looked like NOISE it was so random.

[speculus]

you are in a very small minority in that opinion. Ranked by fortune magazine as one of the 75 best books in their list.

"Randomness is so pervasive, says Taleb, that in many walks of life it is impossible to tell who is a fool and who is a genius. But the longer a fool stays in the game, the more likely he is to be exposed. Over the past year, many top executives have been kicked out after their companies
stumbled. Is it possible that men like John Mayo at Marconi and Peter Bonfield at BT were simply lucky fools whose time was up?"
w w w . p r o s p e c t - m a g a z i n e . c o . u k Page 2 of 2


Same was stated in The Drunkards Walk when the author did a simple test. He ranked the top 50 investment firms by projection. He then ranked them in the same order for their ability to project the next five years and the resultant graph looked like NOISE it was so random.

So 46z, what's Taleb's (or yours, because I surely value your opinion marginally more than Taleb's) take on Buffett's argument I presented above?

That should be more interesting to read.

Please don't disappoint me.

[Light]

I am speaking from experience not from books. As I said,randomness is an intelligent energy. It is an energy you can interact with. For example at an early age, about 7 years old, I had one of my first encounters with randomness when I found a quarter. I was so innocent and delighted I said out loud to myself, "I'd like to find another one" and a minute later I did. I repeated this in my head for a 3rd time and again found another quarter. After the 3rd time,even as a kid,I became a little concerned that I was not alone. After all, what was the chances of finding 3 quarters? If you think some drunk dropped them, read on. The fourth time I sensed direction and sensed I was told to "dig here" in a bit of dirt, and sure enough,another quarter appeared about 3 inches below the ground level. I was now sensing I was communicating and being guided by an energy and I stopped.

So was that random or was there more to it that we are not accustomed to? As I said I have had several unexplainable experiences like these in my life. What I have found is that the power of "will and or determination" can affect randomness. What are the odds of finding those 4 quarters. As a child it was an innocent desire presented in the right way that made it happen. Greed or desperation would not have brought that energy into the event.

Do you realize the infinite "random" events that are going on a molecular level to the infinite random events going on on the massive level are just too much for our brains to comprehend.So just deal with it.When you lose a race,there are no excuses.

[Greyfox]

I am speaking from experience not from books. As I said,randomness is an intelligent energy. It is an energy you can interact with. For example at an early age, about 7 years old, I had one of my first encounters with randomness when I found a quarter. I was so innocent and delighted I said out loud to myself, "I'd like to find another one" and a minute later I did. I repeated this in my head for a 3rd time and again found another quarter. After the 3rd time,even as a kid,I became a little concerned that I was not alone. After all, what was the chances of finding 3 quarters? If you think some drunk dropped them, read on. The fourth time I sensed direction and sensed I was told to "dig here" in a bit of dirt, and sure enough,another quarter appeared about 3 inches below the ground level. I was now sensing I was communicating and being guided by an energy and I stopped.

.

Children have "magical thinking."
They look for causality where in fact none exists.
That you recalled that event happened is not in doubt.
That you should draw beliefs from it as an adult or can even think what you really thought at the time is dubious. Your adult brain won't let you.

[dnlgfnk]

I appreciate your evaluation, Speculus, for this simple layman.

All man's difficulties are ultimately theological. Way too much time here spent on an apparent relativist (Taleb) who is a child of the "Enlightenment".

Again with the contradictory argument that FBR is "ranked by Fortune magazine as one of the 75 best books in their list"? We can trust Fortune and the criteria by which they dogmatically anoint FBR as one of their best 75, but Bill Benter is either a liar or very much deceived for claiming to have amassed a fortune based on formulaic, data-generated selections...

http://www.contingenciesonline.com/contingenciesonline/20090506/?pg=25#pg22

[46zilzal]

So 46z, what's Taleb's (or yours, because I surely value your opinion marginally more than Taleb's) take on Buffett's argument I presented above?

That should be more interesting to read.

Please don't disappoint me.
Like Leibnitz in Germany and Newton in England with the field of calculus, two people arrived at an idea, in a previously unknown arena of thought. I have pondered the same thing that these two authors wrote about for over 40 years conceptually and could never quite articulate it until these mathematicians described it with multiple examples which make perfect sense in the pursuit of parimutuel success. That is what I took away from their work.

I have never read, nor care to read, the very successful investor Buffet because I now have the confirmation of what I always held as true and use that lesson daily in my wagering. His arena is the stock market where I have never once taken part nor ever care to work with the established charlatans therein.

[Light]

That you should draw beliefs from it as an adult or can even think what you really thought at the time is dubious. Your adult brain won't let you.

Then explain how as an adult, 10 years ago I sensed an energy telling me to play the lottery (which I never play) that i would have won had I played it. However due to being an "adult",I doubted what I was sensing and concluded that it was my imagination playing with me. Turns out that 3 out of the 3 numbers I had immediately sensed to play and the only numbers I was sure of by far,were picked the next day. What are the odds of that?

When I saw those numbers in the newspaper the next day I felt sick.I would have won about $300 million.Nobody hit it. The other three numbers were given to me the day before in random conversations. The most notable was with the man in Whole Foods at the fish counter selling fish. I asked him for fish for 4 people. He said for 4? I said yes,for 4. We repeated the number 4 several times. It turns out another of the lottery numbers was 4 and so was the bonus number. Someone or something was definetly tapping me on the shoulder. I wasn't paying attention. What are the odds of repeating the number 4 with a man behind the fish counter at Whole foods several times when you are thinking of playing the lottery with the number 4 turning up in duplicates the next day?

The final number of the 3 that I did not come up with immediateley was my age. The other 3 I did come up with immediately was the day of my birth,my son's birth and my daughters birth. What is the odds of that bit of randomness?

I was depressed for 2 weeks afterwards. I am rarely depressed. Besides the money, I felt a traitor to myself and that energy that was reducing the astronmical odds of hitting the lottery for my sake.

What got me out of the depression ironically was that I realized it was all meant to be. It was a lesson. If I actually won the lottery,it may not have necessarily been a good thing. But also it was a lesson,not to doubt myself and that which cannot be seen. I have not felt a motivation to play the lottery since.

[thaskalos]

Then explain how as an adult, 10 years ago I sensed an energy telling me to play the lottery (which I never play) that i would have won had I played it. However due to being an "adult",I doubted what I was sensing and concluded that it was my imagination playing with me. Turns out that 3 out of the 3 numbers I had immediately sensed to play and the only numbers I was sure of by far,were picked the next day. What are the odds of that?

When I saw those numbers in the newspaper the next day I felt sick.I would have won about $300 million.Nobody hit it. The other three numbers were given to me the day before in random conversations. The most notable was with the man in Whole Foods at the fish counter selling fish. I asked him for fish for 4 people. He said for 4? I said yes,for 4. We repeated the number 4 several times. It turns out another of the lottery numbers was 4 and so was the bonus number. Someone or something was definetly tapping me on the shoulder. I wasn't paying attention. What are the odds of repeating the number 4 with a man behind the fish counter at Whole foods several times when you are thinking of playing the lottery with the number 4 turning up in duplicates the next day?

The final number of the 3 that I did not come up with immediateley was my age. The other 3 I did come up with immediately was the day of my birth,my son's birth and my daughters birth. What is the odds of that bit of randomness?

I was depressed for 2 weeks afterwards. I am rarely depressed. Besides the money, I felt a traitor to myself and that energy that was reducing the astronmical odds of hitting the lottery for my sake.

What got me out of the depression ironically was that I realized it was all meant to be. It was a lesson. If I actually won the lottery,it may not have necessarily been a good thing. But also it was a lesson,not to doubt myself and that which cannot be seen. I have not felt a motivation to play the lottery since.Some things in life defy explanation...

Case in point:

I was in an Indiana casino about a month ago...and as I was waiting for a seat to open at the poker room...I wandered over to a roulette table.

Looking up at the "board", I noticed that the red numbers were coming up with surprising regularity...and I attempted to place a bet on black.

Before I could place my chips on the felt...an older lady grabed hold of my arm, and proceeded to educate me on the finer points of roulette betting:

"There is a dealer who is going to take over at this table in 7 minutes" she told me - in a conspiratorial tone. "He is still new...and is not yet fully adept at spinning the ball properly. As a result...in all of his spins, the ball lands on the small numbers (1-18). I have been following him all week...and I can't lose!"

I badly wanted to tell her that, what she was telling me was nonsense...and that it didn't require any strength or skill to make the ball land on the large numbers (19-36)...but she was so pleasant and cheerful, that I didn't want to upset her.

Sure enough...the new croupier came over to our table in a few minutes...and the old lady sprung into action...putting down a bet on "1-18".

"7"!...the dealer exclaimed...and the old lady gave me a knowingly wink.

She pressed her bet.

"9"!...the number came...and the lady let out an excited scream!

I was stunned. Without giving it any thought, I placed my bet right next to hers...

1...4...8...3...9...11...16...17...the numbers poured in, and the lady had placed $25 on every spin. I could not believe my eyes.

And then she grabed my arm again and whispered to me: "That's it! Its over!"

Not wanting to question her "expertise"...I calmly removed my new bet, and stepped away from the table.

"36"...the croupier shouted, and my partner turned to me and said: "I told you. Let's go".

I swear that this is a completely true story...and I defy you to calculate the probability of its occurrance...

[speculus]

...... but Bill Benter is either a liar or very much deceived for claiming to have amassed a fortune based on formulaic, data-generated selections...
http://www.contingenciesonline.com/contingenciesonline/20090506/?pg=25#pg22

I once saw a video clip of Bill Benter talking and presenting some paper at a seminar (it must still be buried somewhere in internet archives, I am sure), and I felt the same way you think. But mine was purely a gut feeling, you know the kind of vibes one gets from a persona, nothing more.

Am curious to know however why you say what you say here. Do you know him personally and have reason to make that comment?

[Dave Schwartz]

Spec,

I can tell you that I have personally met several people who worked in his organization in the late '80s and early '90s. From what I heard from them, everything said about Benter's exploits is true.


Regards,
Dave Schwartz

[markgoldie]

Since we are talking about unexplained phenomena, I might as well offer my own.

Back in the later 70's, I was living in a small apartment across the street from a convenience store. On my way home from work, I would often stop in to buy a few things like milk or bread.

One evening, I pulled up at home, parked my car and walked across the street to the store. As I did so, a strange thought crossed my mind, which was that I should play the Daily Number. Now, being an inveterate horse player, I knew that the Daily Number carried with it an obscene takeout rate of 50% and consequently, I had never played the number even once in my entire life (and still haven't to this day). But as I neared the store, the strange thought persisted. At that point I thought, Fine. But even if I wanted to play this stupid bet (which I most assuredly do not) what number would I even play? I don't have "favorite" numbers like the losers who play this thing do.

At that moment, I was approaching the front door of the store and I happened to glance at the window display. There was a six-pack of Coke or something sitting there with a big sign which read: "$1.89" I thought, Well, you asked for a number and there it is. I entered the store and began grabbing the items I had come in for. Even though I knew that they sold the Daily Number there, I quickly dismissed the nonsensical idea of playing it.

I left the store, walked into my apartment and began making some dinner. As was my custom, I had turned on the television, more for background noise than anything else. I was about midway through my meal when I heard the T.V. announcer say, "And now it's time for the Pennsylvania Lottery Daily Number drawing."

You can surmise the rest. 1-8-9 in exact order. A thousand-to-one shot, for which they pay 500-1.

I suppose I'll always remember that and I can honestly say that I have never again had even the slightest urge to play the Daily Number.

[Greyfox]

Then explain how as an adult, 10 years ago I sensed an energy telling me to play the lottery (which I never play) that i would have won had I played it. However due to being an "adult",I doubted what I was sensing and concluded that it was my imagination playing with me. Turns out that 3 out of the 3 numbers I had immediately sensed to play and the only numbers I was sure of by far,were picked the next day. What are the odds of that?

.

Arthur Koestler wrote a book entitled "Roots of Coincidence" which would give support to what you are saying. He speculated that perhaps tiny subatomic particles called "mesons" were involved but that was speculation only.
Having said that I meet people at the track every day who tell me that they would have had the supertri if only they had played it.
In your lottery instance 200 million people have the same feeling you did every week. They don't.
You being a sample of 1 is too small to generalize from.
The fact is you didn't play the lottery. You didn't win it. Had you played the numbers may not have come up (according to Koestler.)
So generalize your experience 200 million times and then you might be on to something. Until then it is simply superstitious thinking and holds no water.

[Dave Schwartz]

Mark,

I have a similar story from my gaming days.

I was working at Circus Circus in 1984 and times were a bit tough. I worked swing and got off at 2am. On the way home I got this overwhelming desire to stop a play Keno, something I never do.

(Note: On occasion I have played "Freeno." That's where you pick your numbers, stare at the board and congratulate yourself on the money you kept in your pocket.)

Back to the story... So, I drove passed the small casino that was near where I lived, went home and got in bed. I just laid there thinking about this keno play in my head, which included my "favorite numbers," by the way...


11, 7, 20, 32, 17, 5 - These three numbers are next to each other on an American roulette wheel. When I play roulette, I always like root for my numbers in Chinese.

Uh-oh. This takes me to another story...

Early '90s. We had some people visiting from out of town. At their request, we took them to a casino. The guy and I went to play a little roulette with about $20 each. My (then) wife is left standing there with the other guys wife and says, "Oh, this could be embarrassing. We'll be knee deep in little Chinese people if he hits anything."

What I would do is cover my favorite numbers and then root strongly for number 32. You would hear my voice - "Sam-sop-yee! Sam-sop-yee!" Quietly, at first, but if I got a hit, I would remove the one that hit and double up the bets on the remaining numbers, the goal being to hit all the numbers before running out of money.

So, I hit the first number, 11, (sop-yat), receive my payoff and change from quarters to halves. I continue to cheer for sam-sop-yee but my voice has gone up a little.

When I hit "sop-gow" (18) I get a small profit because I have splits and corners on 17-18. I bet back and continue to cheer for sam-sop-yee. I get a hit on "yee-sop" (20) and now have some real money to play with. Understand that I am not betting one unit... I am basically betting back almost all of my win, just leaving enough for a "last spin" if I lose.

Now I have escalated to dollar units and the Chinese crowd is beginning to gather. On the next three spins I hit splits and corners (I really did bury my numbers!) so I am still in the game and now have a couple of extra bets.

When the dealer spins again the ten or so Chinese people around me are now cheering for sam-sop-yee right along with me. I lose but still have enough profit left for another round on my 4 remaining numbers.

When 32 hits straight up, the crowd goes wild. I trade up to $5 units and we continue. I bet 32 back again - with perhaps $15 straight up and another $30 around it.

By now my Chinese cheerleaders have taken over. Even before the ball is spinning they are cheering, "Sam-sop-yee, Sam-sop-yee," over and over! When it hits right back I have this large pile of checks coming my way.

I stay in $5 units but now am betting about $15 units, with $50 straight up on 32. (That is the most the will allow me to wager straight up.)

BTW, to make this even more interesting, the dealer is Chinese. I have been making a one-unit bet for her straight up on the 32 from the very first spin.

When "5" hits next (that would be "ng" if memory serves right), I've got $30 straight up (at 35-1) plus all the corners and the splits. I am now into pure green check play. I also have maybe 40 people of Chinese language around me. I notice that they are all so small. Seriously.

I catch a couple of corners but no splits, then a loser and decide it is time to cash out. I walk with around $3k, the dealers won about $1,500 (they would not let me bet $25 for them while I was betting $50 for me).

And I say "Sayonara" to my Chinese entourage. (Yes, I know that is not Chinese, but, you see, I don't actually speak Chinese. I just know some of the numbers.)



Mark, I will continue the original story later. I think this one was better anyway...

[Light]

You being a sample of 1 is too small to generalize from.


The sample size is irrelevant, so is your belief. None of these phenomena can be scientifically or statistically proved to your satisfaction. The point is that the generally accepted concept of randomness that has been presented here cracks at the seams in light of these other phenomena.

[Cratos]

First up, I have read Taleb's Fooled by Randomness.

For those of you who have not read it, the main theme of the book is this:
we need not applaud any great (as in profitable) investing performance in the stock market because the super performance may be pure accident, a random event, only waiting to be 'corrected' in the future. The market's current state is a random event, and the same performance may look lousy at a future market state (another random event). In short, there is too much randomness to certify any method as a winning method for the long term, or any investor as a super investor all the time. [So Mr Warren Buffett is just plain lucky that random events and random states of the stock market over the past 40 years have made his investments look good, and poor Mr John Appleseed is plain unlucky if he lost money during the same period. Let's not extol Mr Buffett nor ridicule Mr Appleseed].

My personal opinion about the book: Pure BS filled with erroneous premises and specious argument. Mr Taleb comes across as an armchair intellectual who, in a visceral way, hates investing brilliance on principle [could it be a case of sour grapes? A point worth investigating.] The book, trumpeted by the media of our day as a Classic, has enabled Taleb to outlive his 15 minutes of fame by many more years, and that to me seems to be the ONLY achievement of this book.

Luckily for students of probability, Buffett had foreseen the arrival of clowns like Taleb and their objections well in advance. As early as 1984, he had given a talk at Columbia University which started thus:

The Superinvestors of Graham-&-Doddsville

"Is the Graham and Dodd "look for values with a significant margin of safety relative to prices" approach to security analysis out of date? Many of the professors who write textbooks today say yes. They argue that the stock market is efficient; that is, that stock prices reflect everything that is known about a company's prospects and about the state of the economy. There are no undervalued stocks, these theorists argue, because there are smart security analysts who utilize all available information to ensure unfailingly appropriate prices. Investors who seem to beat the market year after year are just lucky. "If prices fully reflect available information, this sort of investment adeptness is ruled out," writes one of today's textbook authors.

Well, maybe. But I want to present to you a group of investors who have, year in and year out, beaten the Standard & Poor's 500 stock index. The hypothesis that they do this by pure chance is at least worth examining. Crucial to this examination is the fact that these winners were all well known to me and pre-identified as superior investors, the most recent identification occurring over fifteen years ago. Absent this condition - that is, if I had just recently searched among thousands of records to select a few names for you this morning -- I would advise you to stop reading right here. I should add that all of these records have been audited. And I should further add that I have known many of those who have invested with these managers, and the checks received by those participants over the years have matched the stated records.

Before we begin this examination, I would like you to imagine a national coin-flipping contest. Let's assume we get 225 million Americans up tomorrow morning and we ask them all to wager a dollar. They go out in the morning at sunrise, and they all call the flip of a coin. If they call correctly, they win a dollar from those who called wrong. Each day the losers drop out, and on the subsequent day the stakes build as all previous winnings are put on the line. After ten flips on ten mornings, there will be approximately 220,000 people in the United States who have correctly called ten flips in a row. They each will have won a little over $1,000.

Now this group will probably start getting a little puffed up about this, human nature being what it is. They may try to be modest, but at cocktail parties they will occasionally admit to attractive members of the opposite sex what their technique is, and what marvelous insights they bring to the field of flipping.

Assuming that the winners are getting the appropriate rewards from the losers, in another ten days we will have 215 people who have successfully called their coin flips 20 times in a row and who, by this exercise, each have turned one dollar into a little over $1 million. $225 million would have been lost, $225 million would have been won.

By then, this group will really lose their heads. They will probably write books on "How I turned a Dollar into a Million in Twenty Days Working Thirty Seconds a Morning." Worse yet, they'll probably start jetting around the country attending seminars on efficient coin-flipping and tackling skeptical professors with, " If it can't be done, why are there 215 of us?"

By then some business school professor will probably be rude enough to bring up the fact that if 225 million orangutans had engaged in a similar exercise, the results would be much the same - 215 egotistical orangutans with 20 straight winning flips.

I would argue, however, that there are some important differences in the examples I am going to present. For one thing, if (a) you had taken 225 million orangutans distributed roughly as the U.S. population is; if (b) 215 winners were left after 20 days; and if (c) you found that 40 came from a particular zoo in Omaha, you would be pretty sure you were on to something. So you would probably go out and ask the zookeeper about what he's feeding them, whether they had special exercises, what books they read, and who knows what else. That is, if you found any really extraordinary concentrations of success, you might want to see if you could identify concentrations of unusual characteristics that might be causal factors.

Scientific inquiry naturally follows such a pattern. If you were trying to analyze possible causes of a rare type of cancer -- with, say, 1,500 cases a year in the United States -- and you found that 400 of them occurred in some little mining town in Montana, you would get very interested in the water there, or the occupation of those afflicted, or other variables. You know it's not random chance that 400 come from a small area. You would not necessarily know the causal factors, but you would know where to search.

I submit to you that there are ways of defining an origin other than geography. In addition to geographical origins, there can be what I call an intellectual origin. I think you will find that a disproportionate number of successful coin-flippers in the investment world came from a very small intellectual village that could be called Graham-and-Doddsville. A concentration of winners that simply cannot be explained by chance can be traced to this particular intellectual village.

Conditions could exist that would make even that concentration unimportant. Perhaps 100 people were simply imitating the coin-flipping call of some terribly persuasive personality. When he called heads, 100 followers automatically called that coin the same way. If the leader was part of the 215 left at the end, the fact that 100 came from the same intellectual origin would mean nothing. You would simply be identifying one case as a hundred cases. Similarly, let's assume that you lived in a strongly patriarchal society and every family in the United States conveniently consisted of ten members. Further assume that the patriarchal culture was so strong that, when the 225 million people went out the first day, every member of the family identified with the father's call. Now, at the end of the 20-day period, you would have 215 winners, and you would find that they came from only 21.5 families.

Some naive types might say that this indicates an enormous hereditary factor as an explanation of successful coin-flipping. But, of course, it would have no significance at all because it would simply mean that you didn't have 215 individual winners, but rather 21.5 randomly distributed families who were winners.

In this group of successful investors that I want to consider, there has been a common intellectual patriarch, Ben Graham. But the children who left the house of this intellectual patriarch have called their "flips" in very different ways. They have gone to different places and bought and sold different stocks and companies, yet they have had a combined record that simply cannot be explained by the fact that they are all calling flips identically because a leader is signaling the calls for them to make. The patriarch has merely set forth the intellectual theory for making coin-calling decisions, but each student has decided on his own manner of applying the theory......

[Excerpted from The Superinvestors of Graham-&-Doddsville, a talk given by Warren E Buffett at Columbia Univeristy in 1984]

For complete transcript, click here. (http://www.tilsonfunds.com/superinvestors.html) .

When you mentioned Mr Warren Buffett you got me; very good post

[Jeff P]

Spec,
Very good post. Thanks for that. I especially liked the part about intellectual villages. In the investing community, there's also a guy by the name of Edward Thorpe (who oddly enough got his start playing 21.) I've come to repsect his work greatly and believe he is deserving of being recognized as having started an intellectual village of his own.

Dave S,
You mentioned Benter. Bill Benter and Alan Woods are two names that IMHO are deserving of being recognized as having started an intellectual village in the area of horse race betting.

I've never once heard anything other than confirmation from other large players whenever the topic of their exploits comes up. I've personally come to believe the literature about their wagering success and methods is genuine.

General Comment:
To a lesser degree, I think the collective intelligence of the posters here at Paceadvantage (sometimes) merits consideration as an intellectual village in its own right.

46zilzal,
VERY nice call (70-1 at Ft Erie) in the selections thread yesterday. Random accident? I tend to think not. :)


-jp

.

[CBedo]

Very good post. Thanks for that. I especially liked the part about intellectual villages. In the investing community, there's also a guy by the name of Edward Thorpe (who oddly enough got his start playing 21.) I've come to repsect his work greatly and believe he is deserving of being recognized as having started an intellectual village of his own.Beat the Dealer was probably the first book on card counting that many of us read! If only we could hedge pricing anomalies in horse racing like Thorpe does in the financial markets...

[Valuist]

Before the advent of synthetic, you rarely heard the words "random" or "randomness" to describe racing results. Not anymore.

[CBedo]

Before the advent of synthetic, you rarely heard the words "random" or "randomness" to describe racing results. Not anymore.That is definitely not true. My grandfather was warning me of the unpredictable "sh#t happens" factor since I was introduced to racing in the 70's.

[Greyfox]

The sample size is irrelevant, so is your belief. None of these phenomena can be scientifically or statistically proved to your satisfaction. The point is that the generally accepted concept of randomness that has been presented here cracks at the seams in light of these other phenomena.

I'm not sure that what you are talking about is randomness.
Nevertheless, if you believe what you believe, I strongly recommend
Arthur Koestler's book on "Roots of Coincidence." He agrees with you.
(Koestler of course is dead, but the book is still a very good read.)

[dnlgfnk]

Speculus:

I wasn't very clear in retrospect. I wasn't questioning Benter's veracity. I was making light of the fact that, for Zilzal, Fortune Mag's voting FBR one of it's top 75 books was testament to the book's presenting reality, and not the result of randomness, in which another vote would be entirely different.

On the other hand, if Zilzal is consistent, something like the extremely successful Benter method is the result of randomness, since Benter relied on historical data.

If something is useful for supporting Zilzal's randomness, the randomness seems to disappear. Life's a contradiction.

[Charlie D]

Wonder if this guy includes randomness in his capping.

http://www.puntingace.com/punting_profiles/zeljko.html


That extravagance measures out at over $1 billion in turnover per year. That is greater than the GDP of 25 countries. On racing across the world, from Australian thoroughbreds at carnival time to a lowly Portugal trots meeting, Zeljko bets and bets big. With a staff of over twenty experts, hired through a detailed questionnaire to test their abilities as form experts, he unleashes his huge bank. His staff study form, watch videos and make assessments.



I also wonder if he is real. Dave, any knowledge of this guy??

[Valuist]

That is definitely not true. My grandfather was warning me of the unpredictable "sh#t happens" factor since I was introduced to racing in the 70's.

Nobody is saying it NEVER happened. It just is much more frequent now, at least at the synthetic tracks.

[Dave Schwartz]

Charlie, I absolutely know this one is real.

That's all I can say.

[Charlie D]

Thats ok Dave. I understand.

[lansdale]

After reading Fooled by Randomness, by Nassim Taleb which relates to others how predictions of the stock market are simply a matter of luck, NOT SKILL, it is refreshing to see this author come back to cover his life's work as a knowledgeable skeptic in the wonderful, thought provoking book,THE BLACK SWAN .

He,like many authors of late (i.e The Drunkard's Walk: How Randomness Rules our Lives), shoots gigantic holes in probability theory and the use of databases to predict future events. One of my favorite expressions he used as related to the Bell curve which all database gurus take as being GOSPEL, he calls the GIF, or gross intellectual fraud.

Using countless examples in situations ALL of us have confronted, he repeatedly shows that we know FAR less than we think we know and cover up those deficits (often by "experts" he refers to as empty suits) by psychological mechanisms of narration (giving bogus, unproven answers to the times when the data misses the mark).

He shoots many holes in the idea of conditional probability (i.e if this, then
that is true) by enlightening the reader to aspects of that conclusion we might never have considered before.

A remarkable tour de force that will get you thinking about ANY DOGMA you hold dear particularly in the racing game. A must read.

46,

I admire both of these books greatly, and am glad that you started this thread, but I believe that Taleb's insights have only limited application to handicapping. Why? Because, although certainly randomness is part of the game, as a series of 'real world' events, it remains an extremely limited and highly constrained slice of 'reality' in comparison with something like the stock market, - one in which there is no counterpart of the 'Black Swan'. And although certainly the last few years have clearly demonstrated the flaws of the equilibrium model, per Taleb, given a series of events as relatively simple as horse races, it obviously still functions successfully for those few who are able to beat the game - Benter was one obvious example cited, but even on PA, we have people like Rook and Jeff Platt, who are basically using equilibrium models. In fact anyone who succeeds in beating the game is using an equilibruim model, albeit often an informal one.

Cheers,

lansdale

[Greyfox]

He who claims, should show.

46Zilzal independent of the books you have mentioned, this thread starts with the bold claim: "Randomness cannot be excluded from handicapping."

Simply Stated:

"If randomness cannot be excluded from handicapping,
tell us how it is, or possibly could be, included in handicapping?"

[xtb]

"If randomness cannot be excluded from handicapping,
tell us how it is, or possibly could be, included in handicapping?"


The "All" button.

[46zilzal]

The "All" button.
there is a fellow who knows about randomness.

Just look at the chart for the recent Canadian Derby at Northlands. Could ANYONE have predicted the fall that made, other than the obvious win choice, the race a total guessing game underneath?

[Dave Schwartz]

46,

He has asked you a very good and direct question.

If you have no answer then your statement has no value.


What say you?


Dave Schwartz

[speculus]

Spec,

I can tell you that I have personally met several people who worked in his organization in the late '80s and early '90s. From what I heard from them, everything said about Benter's exploits is true.

Regards,
Dave Schwartz

Thanks Dave. This coming from you, I can now correct my erroneous gut feeling about the man. In fact, I feel sorry for having thought so.


Spec,
Very good post. Thanks for that. I especially liked the part about intellectual villages. In the investing community, there's also a guy by the name of Edward Thorpe (who oddly enough got his start playing 21.) I've come to repsect his work greatly and believe he is deserving of being recognized as having started an intellectual village of his own.

Thanks Jeff. Yes I know about Edward Thorpe, and I too have great respect for the man.

[xtb]

there is a fellow who knows about randomness.



I was being facetious.

[Light]

I'm not sure that what you are talking about is randomness.


Randomness is not an island unto itself. It is interwoven into the fabric of space and time. Just because statistically something happens infrequently and with no discernable pattern that we dont understand does not make it guilty of being "random". That's just a word we use to describe a type of event. But who is to say that type of event is not part of the natural cosmic order.

The creation of life on earth and the evolution of man had to have a series of random cosmic events at impossible odds. If I told you this in another space and time, you would probably tell me to read that book on coincidences and that I am only 1 person statiscally, that I have no validity,take 2 of these in the morning, and blah blah blah.

So this whole existence we lead is a freak accident? I don't think so. IMO,there was an intelligent energy that is interwoven with randomness that "willed" the birth of our world. Thus the impact of comets and meteors were not random and now scientist see they have a purpose in the formation of life. All the microscopical events that happen to us in our daily life (including who wins the 7th at Saratoga) are also subject to the same laws that govern celestial bodies and the creation of life, including my "random" experiences I described that you try to explain away because they don't fit your definition of reality.

First you need to realize that the odds of you being here are astronomically "random" as well. In other words,you are not random,you were meant to be.(In part to bug me). Randomness does not exist in an absolute form.

We are all living proof that randomness is part of an intelligent energy.You cant seperate them. Good thing it didn't read the crap about it in this thread before we were created.

[Dave Schwartz]

As I recall, from the Ed Thorpe years, the brains behind it all was Julian Braun. Funny thing was that Braun was very accessible back in the '70s.

I knew several BJ players local to Las Vegas who would call him with questions about the strategies. I was even present during some of the phone calls although I never spoke to him myself. I guess each phone call would end with "send me $20" and the player would comply.

Makes me realize that 1976 was really a long time ago.

[46zilzal]

46,

He has asked you a very good and direct question.

If you have no answer then your statement has no value.


What say you?



As stated elsewhere, this revelation is confirmation of observations I HAVE NOTED in over 40 years of wagering on the races. It is there, confirms MY position as I have stated ad nauseum: when the gates open, randomness can, and often, completely changes the contest.


It works as a constant reminder of what changes the outcome and allows me the option of hitting the home run ball which I do now much more often than before since it was included.

The idea never had any concrete basis until I met a scub nurse when we were playing soft ball and she invited me to go out to the harness races with she and her husband. HE imparted a simple wisdom to me that I never forgot but did not implement for many years: You cannot get big prices looking where every one else looks. There are potentially hundreds of unknown factors in racing trouble from the start to the wire. LOOK FOR THEM and bet accordingly. THAT night he hit three trifectas, one for almost $11K......Amazing guy who sadly met a premature death from a heart attack.

[Charlie D]

Did randomness have any impact in Sara 1 today 46???

[Charlie D]

when the gates open, randomness can, and often, completely changes the contest.





How often (an estimate will suffice) does randomness completely change the contest in your opinion??

[Dave Schwartz]

46,

You created this topic. So tell us - how does one use it in handicapping?

[46zilzal]

46,

You created this topic. So tell us - how does one use it in handicapping?
randomly, but it works in many situations but one of the best is the maiden "riding the coat tails" races where there is a SINGLE known: a maiden that is about set to graduate and a field of UNKNOWN firsters.

This is NOT the best one I could find either as several at Philly had the odds on finish third and the tri pay over $6000. One puts the KNOWN as a key to the field. Risky? possibly but the ROI is huge long term.

4th race - Aqueduct - January 29, 2009
Pgm Horse Win Place Show
1 Just Another Story 3.30 2.70 2.40 (Known)
2 Sage the Rage 8.20 6.30
9 Angelic Timber 17.80

$2 Daily Double 2-1 10.60
$2 Exacta 1-2 33.20
$2 Quinella 1-2 24.80
$2 Superfecta 1-2-9-3 5,137.00
$2 Trifecta 1-2-9 603.00

I so often get the "splitzacta" that a base wager for me in races that show two definite win possibilities include 1-all -2, 2- all -1, 1-2-all 2-1--all and on the turf (STRANGELY) all-2-1, all -1-2 and the payoff have been huge at times.

Know hooked to unknown and random

[lansdale]

As I recall, from the Ed Thorpe years, the brains behind it all was Julian Braun. Funny thing was that Braun was very accessible back in the '70s.

I knew several BJ players local to Las Vegas who would call him with questions about the strategies. I was even present during some of the phone calls although I never spoke to him myself. I guess each phone call would end with "send me $20" and the player would comply.

Makes me realize that 1976 was really a long time ago.

Dave,

Julian Braun is best known for the billions of hands of computer sims he did, through the 60s and 70s, at a time when few players had the knowledge of or access to computers that he did. But no one, least of all Braun, would compare himself to Thorp, who made the major breakthrough following what would be today, agonizingly slow computer runs in the late 50s. He truly is an extraordinary mind. Worth noting that he started one of the first and most successful hedge funds, and that he independently formulated the Black-Scholes model which later won them the Nobel Prize. The reason he chose not to publish, was that he was using it in connection with the hedge fund, and didn't want it known to the general public. Interesting also, that when these guys were putting together LTCM in the early 90s, they asked Thorp to join, but he refused by explaining that their model was flawed. To bad they didn't listen.

Cheers,

lansdale

[markgoldie]

randomly, but it works in many situations but one of the best is the maiden "riding the coat tails" races where there is a SINGLE known: a maiden that is about set to graduate and a field of UNKNOWN firsters.

This is NOT the best one I could find either as several at Philly had the odds on finish third and the tri pay over $6000. One puts the KNOWN as a key to the field. Risky? possibly but the ROI is huge long term.

4th race - Aqueduct - January 29, 2009
Pgm Horse Win Place Show
1 Just Another Story 3.30 2.70 2.40 (Known)
2 Sage the Rage 8.20 6.30
9 Angelic Timber 17.80

$2 Daily Double 2-1 10.60
$2 Exacta 1-2 33.20
$2 Quinella 1-2 24.80
$2 Superfecta 1-2-9-3 5,137.00
$2 Trifecta 1-2-9 603.00

I so often get the "splitzacta" that a base wager for me in races that show two definite win possibilities include 1-all -2, 2- all -1, 1-2-all 2-1--all and on the turf (STRANGELY) all-2-1, all -1-2 and the payoff have been huge at times.

Know hooked to unknown and random
Guess this may work as long as "random" factors such as stumbling, bumping, lameness, sickness, etc.,etc. doesn't take our "known" horse out of the race.

Wondering what we do with a field of firsters and dirt maidens on the grass. Box the field?

BTW, in your last sentence, what exact distinction are you making between "unknown" and "random'?

[Dave Schwartz]

46,

I do not understand how you call this "using randomness in your handicapping."

Could you please explain?

[46zilzal]

How often (an estimate will suffice) does randomness completely change the contest in your opinion??
I have seen on sloppy days 60% of the races modified by factors un-handicappable

[46zilzal]

46,

I do not understand how you call this "using randomness in your handicapping."

Could you please explain?
including the unpredictable, embracing the fact that I nor you, or ANYONE else can predict all the little things that alter the outcome of a contest. Over the years this has why I made sure to mostly wager on horses that were early since they are usually out front away from trouble....like this one

[Charlie D]

I have seen on sloppy days 60% of the races modified by factors un-handicappable


I've not noticed this at the circuit i play (NYRA) and if it were as you say. It would surely jump up from off the page.

[Charlie D]

exacta $98.50 based upon speed and energy distribution

Logic, not randomness.


:ThmbUp:

[Dave Schwartz]

46,

IMHO, you are not "using randomness." You're simply handicapping. If anything, you are using anti-randomness.

In the 1-previous starter example, using "randomness" would demand that you assume there were one or more "surprise horses" (for lack of a better phrase) in the bunch and look for a price. At least this is how it would seem to me.


I am reminded of the movie Jurassic Park. In that movie, Jeff Goldblum continually refers to "chaos theory" as a sort of "nature will find a way" reasoning to explain nature's version of Murphy's law. It is nothing of the sort.

Chaos theory is, effectively, "order out of seeming chaos." In the math sense, in order for something to be "mathematically chaotic" the order must have been discovered, else you have, well,... chaos.


Your idea of randomness, as was suspected and challenged by many here, is not really randomness at all.

Is there randomness in racing? Of course there is. No great revelation there. Some percentage of the time the horse that is supposed to go to the front simply doesn't. Now, not all of that is randomness. Some of it is attributable to poor handicapping on our part; we simply missed something.

But if you can find the guy with the most accurate prediction method of who is going to the front, whatever that accuracy percentage might be, he still cannot tell you with absolute certainty whether THIS is the time that his horse will remain in the gate. THAT is randomness.

And that randomness is no different than the house faces booking the hard eight; they have the best of it on every bet. That's predetermined. But they still cannot tell you whether or not they will win THIS bet. That's randomness.

To paraphrase Wikipedia on the topic: "... randomness implies a lack of predictability."


As horse players we would be wise to heed the advice of one Warren Nelson, former owner of the Cal-Neva casino in Reno. When asked (by Jack Parr, I believe) if card counters were a threat to the casino, he replied, "When the lamb goes to the butcher, the lamb might kill the butcher, but we like to bet on the butcher."


(If that quote needs explaining, 46, if the lamb kills the butcher, that is randomness in action.)

[46zilzal]

Funny as it is, I don't see a randomness book with your name on it.....I will just keep what has been confirmed to me and cashing tickets till the cows come home with the home run ball in mind.

Another part of this book and several others I have read on cognitive psychology promotes the same illusion which you, and many other here are under: overly languishing in the confirmation when Taleb, and many others, require the NEGATIVE BE CONFIRMED. Many psychologists bemoan the narrative that many people overlay over what is unknown as a human requirement of understanding: people don't understand many of the things that go on each day and simply make up a reason (not able to confirm it) and overlay that reason to the event.......

Like Taleb says these are unknown unknowns which effect each and everything we deal with at some point...Being aware of that makes handicapping even better..

QUOTE:To paraphrase Wikipedia on the topic: "... randomness implies a lack of predictability." YES IT DOES that is why one has to grasp and understand its influence.

Lets see how Random Highs does in the 4th tonight at Hastings.

[46zilzal]

Many break through ideas, as a matter of fact most of them, were knocked by dogmatists. This is certainly not new territory in may outlook on things

[banacek]

I agree that randomness is always there. As Pizzolla says SWSWSW..some will, some won't, so what. But while putting all into your splitzacta ticket is acknowledging randomness...it isn't handicapping.

[46zilzal]

I agree that randomness is always there. As Pizzolla says SWSWSW..some will, some won't, so what. But while putting all into your splitzacta ticket is acknowledging randomness...it isn't handicapping.

Some one who has a grasp of it...IT is wagering not handicapping. The two are mutually exclusive to one another.

No one is trying to assign reason to what happens, just profit from it.

While the crowd unloads on those CONFIRMED sure things from their databases, I go elsewhere.

[thaskalos]

As horse players we would be wise to heed the advice of one Warren Nelson, former owner of the Cal-Neva casino in Reno. When asked (by Jack Parr, I believe) if card counters were a threat to the casino, he replied, "When the lamb goes to the butcher, the lamb might kill the butcher, but we like to bet on the butcher."

(If that quote needs explaining, 46, if the lamb kills the butcher, that is randomness in action.)I think you will agree that the casinos proved to be a lot more afraid of the counters...than the butchers are of the lambs.

[banacek]

Some one who has a grasp of it...IT is wagering not handicapping. The two are mutually exclusive to one another.

Then the title of this thread should say wagering not handicapping? That's what I think Dave was getting at (correct me, Dave, if I'm wrong)

[46zilzal]

Then the title of this thread should say wagering not handicapping? That's what I think Dave was getting at (correct me, Dave, if I'm wrong)

I suppose that is at the heart of the misunderstanding.

To quote a really knowledgeable source: One misunderestimated the outcome of it

[Dave Schwartz]

I think you will agree that the casinos proved to be a lot more afraid of the counters...than the butchers are of the lambs.

Thask,

Absolutely. I never said he got it right - I'm a former successful BJ player myself - I said we she heed his words.


46, I have learned my lesson from this thread. Wonder what you learned?


Dave

[hcap]

I have no definitive answer.Wish I did. Racing is both random and ordered like so many other things. Fractals come to mind.

Fractals combine an 'envelope" to constrain randomness within limits. When pavement cracks due to weathering and wear, the pattern of cracks is non predictable other than the overall distribution of major path to secondary to tertiary and so on down to the finest lines limited by the size of the smallest granular particles that make up the composition of the pavement. The growth of trees also can not be absolutely predicted as to where branches and leaves will specifically grow . But the overall distribution of one to many is recognizable as cracking of pavement. Same for geological patterns. Rivers, mountain ranges and coastlines

http://www.ipod.org.uk/reality/reality_fractal_forest.gif

Fractals demonstrate this. Individual nodes may not be predictable but overall patterns are echoed on many different levels.

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So individual races with individual runners make up a tiny node in the overall patterns of racing. There are overall constraints but finding them may or may not apply at that particular node (race) we are studying. A database may catch an overall pattern but the mix of causal factors-are not necessarily constant in significance.

[Greyfox]

Then the title of this thread should say wagering not handicapping? That's what I think Dave was getting at (correct me, Dave, if I'm wrong)

:ThmbUp: Agreed. See Post # 92 of this thread where I said:

Subject: Randomness is a Wagering Tool

Overlay, has perhaps pointed out that:
"Randomness cannot be excluded from wagering."
108 posts later and 46Z finally acknowledges that.

[thaskalos]

:ThmbUp: Agreed. See Post # 92 of this thread where I said:

Subject: Randomness is a Wagering Tool

Overlay, has perhaps pointed out that:
"Randomness cannot be excluded from wagering."
108 posts later and 46Z finally acknowledges that.Doesn't the horseplayer already account for this "randomness"...by the mere fact that he only commits a tiny % of his total bankroll to any one race?

[PaceAdvantage]

Funny as it is, I don't see a randomness book with your name on it....The king of elitism rears his ugly head yet again...

[Greyfox]

Doesn't the horseplayer already account for this "randomness"...by the mere fact that he only commits a tiny % of his total bankroll to any one race?

That's a fear factor and depends on the horse player. You're talking about what Mitchell and others have advised to do. That doesn't necessarily happen at the track.

[speculus]

Many break through ideas, as a matter of fact most of them, were knocked by dogmatists.

Not every idea that gets knocked is great.

Also, I don't think any of us here putting up a contrary viewpoint are "dogmatic".

[speculus]

......But they still cannot tell you whether or not they will win THIS bet. That's randomness.....

I don't think THAT is randomness, that's purely (1 minus their success probability), which, in a way, is also QUANTIFIED, isn't it?

....To paraphrase Wikipedia on the topic: "... randomness implies a lack of predictability....."

hmmm... I think randomness (as Taleb sees it) is a function of TIME, and his theorem is that at NO GIVEN TIME, you can reduce the element of randomness (mind you, RANDOMNESS, not UNCERTAINTY as implied by Heisenberg which concept is in a different league altogether!) to ZERO.

[46zilzal]

How can one QUANTIFY or for that matter even PREDICT, randomness?....By its very nature of being unexpected and unpredictable how in the world can one quantity something that is unpredictable?

[speculus]

How can one QUANTIFY or for that matter even PREDICT, randomness?....By its very nature of being unexpected and unpredictable how in the world can one quantity something that is unpredictable?

46z,

I think you are confusing between RANDOMNESS and UNCERTAINTY.

RANDOMNESS is something over which you have no grip, no handle, no control. So you (or anyone else) cannot leverage randomness.

However, UNCERTAINTY can be leveraged! All the bookmakers in the world are doing it every minute.

Think it over.