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[Dave Schwartz]

Originally Posted by Jake

Dave Schwartz, do you want to jump into this discussion? I know
you have have systems to do this kind of hedging. I will say that I
can certainly do it, systematically with considerable margins above
60%. However, I don't use a hedging approach. Just play my top 3
in Pk'3 or doubles, which beats hedging in my long experience.

I don't need the consistency of hedging. I do like the ROI of top 3
contenders in a single leg of horizontal betting. Different strokes for
different preference.

Jake

Thank you for the kind words, Jake.

Yes, I've done a lot but the impact of the Whales has taken everything in a different direction.

The biggest challenge is that the GATE ODDS (what I call them) are completely unreliable to bet into --- except for the whales, that is.

(For my shortest possible answer to this, just scroll to the bottom.)

Short version of how people handicap:
The Logical Steps
Step 0: Gather Data

This is the mark up your DRF step when you build factors that are important to you.
(Works with or without colored pens. LOL)

Step 1: Pick Contenders

Most people only do the following steps for their contenders.

Step 2: Estimate Chances

Think "I make this horse 3/1," meaning I think he's got about a 25% chance of winning.

Step 3: Estimate Odds/Consider Tote Board

This is usually done early but then adjusted when horses are in the gate.

Step 4: Determine Value

This is the point when they consider the combination of steps 2 & 3 to come up with who the VALUE PLAYS are.

Step 5: THE BETTING DECISION

Of course, this is where the rubber meets the road.

Step 6: WHALES START HERE!

At this point, we've made our decisions based upon our perception of the hit rates and the odds.

In HSH we expressed the "value proposition" as a letter grade, which went from A+ down to F, where an A+ projected to be at least a $2.40 $net (i.e. +20% edge).

A- was break-even.

What does, "Whales start here" mean?
It means that their work BEGINS where ours ends.

Imagine I have an A+ horse who is also the top hit rate horse.

Do I really believe that I am the only one who can see that this horse is a good bet AND a likely candidate for the winner's circle?

This is when we have a tendency to believe that our way of picking is just soooo unique.

What we conveniently forget is that even if we are the smartest handicappers on the planet, at least a few other people (with their obviously lesser methods) are betting the same horse.

THE POINT: The Whales beat us because they've made a business from adding step #6: CONSIDERING THE 0 THRU 5 STEPS and ADDING HOW THE TOTE WILL REACT TO THOSE STEPS!

Step 7: ANTICIPATE WHO THE WHALES WILL BET AND ADJUST

This is the goal of my AI, but you can mimic this on your own.
(How to do that is a deep topic and outside the scope of this post.)

Think of it like a chess game.
A simple player looks at the current state of the board and asks himself, "What's the best move?"

A master player, asks himself, "What move will my opponent likely make?"

A Grand Master, mentally studies the most likely moves and his opponent's likely responses.

Then he follows the path of each of those "threads" searching for his best course of action.

The shortest possible answer I can think of.

Almost 75% of all winners are going to be bet down from their GATE ODDS.

If you are a two-horse bettor, and you are wagering some simple approach like 60/40% on lower odds vs higher odds, that means that over 2/3s of the time you would be better off betting 40/60.

With 3 horses that gets way more complex.

I have tested 16 ways from Sunday and determined that the Gate Odds are actually WORSE than using a GOOD SET of PROJECTED odds. (HSH has those and I've shared the factors that we use many times.)

The Morning Line is worthless for this, but shockingly, a tiny bit better than the Gate Odds.

The key point of misunderstanding is that any form of ODDS PROJECTION is NOT to be measured by what the final odds WILL be.

Projected odds represent what the final odds SHOULD be.

Gate Odds WILL have value with that.




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