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Old 07-14-2018, 12:14 AM   #1
Que
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A Long Story

Last month I woke at 4 am at the Taipei Hyatt Regency and I couldn’t sleep, so I and went to the Club Lounge and waited until it opened for breakfast. While waiting, I picked-up a recent copy of “Bloomberg” magazine and read the article linked below:

https://www.bloomberg.com/news/featu...se-racing-code

I returned to Taiwan this time to reminisce about days-gone-by, but OMG, did this article bring back some great memories. I believe one of the major players mentioned in the article, Alan Woods, used to post to this website using the name “entropy”.

Although I never worked with one of those Hong Kong wagering syndicates, I was nevertheless obsessed with horse racing at the time. I spent over ten years of my adult life living and working in Asia, and I remember studying in Taiwan in the late 70s when one of my instructors asked me what I wanted to do when I graduated from college? I replied that I wanted to publish a “Racing Form” in Hong Kong. Needless to say, my instructor was speechless, and surely thought I was crazy. I explained that, albeit extremely popular, there was a dearth of good handicapping information in Hong Kong. I knew this because while in High School I had a subscription to the Daily Racing Form (much to the chagrin of my mother) and a collection of handicapping books; and when I went to Hong Kong I was amazed at how little handicapping data was available to the average punter. (Note. The Hong Kong Jockey Club now provides more free information to public than anywhere else in the world—combined!) To get started, I had already collected a stack of old Hong Kong newspapers with running times, race results, which also included pictures of the horse’s running positions at various points of call.

I was always obsessed with numbers, and in addition to my collection of old racing forms, I had a complete collection of all the yearbooks from the Chicago Board of Trade and the Chicago Mercantile Exchange—which at that time was the only way to obtain price data on commodities, e.g. soybeans and live hogs. I guess I was a “Quant” before it even had a name. Just to prove how obsessed I was, I remember driving from Sacramento to Reno and asking the manager at the MGM casino if I could purchase all the previous programs for the Jai Alai season. The manager was dumbstruck and didn’t know what to do, since I was barely old enough to drive and clearly not old enough to bet—but I remember proudly driving back home with a trunkful of Jai Alai programs and past results (until my Mom learned where I had taken the car).

I never did publish my Hong Kong Racing Form—life often pulls you in a different direction, but I didn’t lose interest in horse racing and handicapping. I also believed if you wanted a better mousetrap, you had to create it yourself. So I decided to build my own handicapping program and database. At one time, I probably had one of the largest private databases of handicapping data available. With my program, I could analyze races in hundreds of different ways, to include my own pace figures, trainer, jockey, and owner patterns—to include full stats, return on investment, and impact values. I would have tracked grooms too, if their names were published in the result charts.

It’s been almost ten years since I last bet on a horserace, and seven years since I last posted to PA’s website—and another four years since I posted before that. I stopped betting and following the races because I simply no longer had enough time to devote to handicapping. Even though I had more than tripled the value of my wagering account (and I got a lot of satisfaction watching my account value grow), I decided to close my “YouBet” account. I closed the account because I knew I was spending a disproportionate amount of time working on my handicapping program and playing the races, while neglecting my trading programs and trading account--which at the time was several hundred times larger than the value of my betting account.

To reminisce some more, last week my wife decided I needed to throw away some of the old boxes in the garage. When I opened a box filled with my collection of horseracing and handicapping books, I decided I wanted to keep five or six books which had most influenced me as a handicapper. Here’s my list of keepers (not in any particular order):

1. Doctor Z’s Beat the Racetrack – by William T. Ziemba & Donald B. Hausch. First published in 1984. This book still gets a lot of discussion—good and bad. Dr. Z’s method is not the final solution, but it’s a good starting point. If you don’t believe me, reread the article in the link above.

2. Racetrack Betting—by Asch and Quandt. First published in 1986. Similar to Doctor Z’s Beat the Racetrack, but more mathematical.

3. Winning at the Races – by William L. Quirin. A quantitative handicapping masterpiece. Published in 1979—it was years ahead of its time. Combined with the Dr. Z and Racetrack Betting books listed above, with a good programmer (especially in the late 80s and early 90s) you could have started your own successful betting syndicate (minus the starting bankroll).

4. Modern Pace Handicapping – by Tom Brohamer. Published in 1991. I think I highlighted this entire book—it’s was that good.

5. The Odds Must Be Crazy – by Len Ragozin. Published in 1991. How can you not gain information from someone who devoted their entire life creating what arguably might be the best speed figures available.

6. Woulda, Coulda, Shoulda – by Dave Feldman. An old, but funny book by someone who really knew how to handicap a race.

I’m not sure why I am taking time to write all this. I’m sure only a few people will take the time to read it, and those who don’t read it might still reply with sarcasm and negativity, not to mention that I have some trading algorithms that still require some work. But maybe I wrote it just to share a great article, or maybe just to think about what coulda, shoulda, or woulda been, or maybe just to remind myself, that I am still not too old to tackle racing one last time--albeit the Hong Kong Racing season closes this weekend… but there is still next year.

Que
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Last edited by Que; 07-14-2018 at 12:18 AM.
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Old 07-14-2018, 12:23 AM   #2
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Your story is an enjoyable read. Thank you.

Last edited by Helles; 07-14-2018 at 12:25 AM.
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Old 07-14-2018, 12:34 AM   #3
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good post! Did you ever make any money on Jai Alai?
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Old 07-14-2018, 12:46 AM   #4
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Hey Que! Wow...it's been a good long while, hasn't it?

I was so happy to see your name tonight, but a little bummed you're likely not here to stay a little while.

There was some discussion on that article here when it first came out. I can't find the thread at the moment...

Anyway, I read your post, for what it's worth. And I too, find myself spending way too much time at building that better handicapping mousetrap as opposed to improving my trading algorithm...weird eh?

Good to read your stuff again, even if it ends up being a one time driveby...
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Old 07-14-2018, 01:01 AM   #5
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Enjoyed reading the post. Thanks
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Old 07-14-2018, 01:10 AM   #6
Afleet
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the article linked is an excellent read
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Old 07-14-2018, 01:12 AM   #7
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I really enjoyed reading your post! Thank you
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Old 07-14-2018, 01:41 AM   #8
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Que was here AT THE START basically...as you see, his reg date is March 2001, just like mine (although the website message board started in July 1999. We lost a whole lot of early years posts due to early message board software crashes etc).

Que always provided some excellent contributions...
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Old 07-14-2018, 03:11 AM   #9
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Quote:
Originally Posted by Que View Post
I’m not sure why I am taking time to write all this. I’m sure only a few people will take the time to read it, and those who don’t read it might still reply with sarcasm and negativity, not to mention that I have some trading algorithms that still require some work. But maybe I wrote it just to share a great article, or maybe just to think about what coulda, shoulda, or woulda been, or maybe just to remind myself, that I am still not too old to tackle racing one last time--albeit the Hong Kong Racing season closes this weekend… but there is still next year.

Que
Hi there Que.
That was an interesting read about your reminiscing particularly about the racing in HK.
I believe that the thread that PA was referring to was started in early May covering the Bill Benter interview. http://www.paceadvantage.com/forum/s...ht=Bill+Benter
That was certainly an fascinating interview and even some of the posts were enlightening to say the least. Although I’ve been playing and advocating the racing in HK for the last 5 years, I didn’t want to replicate my feelings about it by posting on that particular thread. Most here know how I feel about the best game on the planet.

If you don’t mind I’d also like to reminisce a bit by re-posting something I personally find very much in line with my game. That’s only because as you’ll see, Bill Benter resigns himself to espouse the very philosophy I follow. I realize that this sort of stuff may antagonize the typical handicapper to no end. Because apparently they’re laboring over each and every race using whatever subjective methodology seems to work at any given time. Meanwhile, I only spend the elapsed time for each race’s betting cycle to first determine if the race is playable (based on a valued return) and then make selections based on the only objective information I believe is available: Money Flow.

BTW if there’s any interest an on going thread covering the current HK race meet can be found here: http://www.paceadvantage.com/forum/s...d.php?t=140560

Quote:
Originally Posted by Nitro View Post
I posted this on another thread related to HK racing. However, it actually has more significance here as related to the value of statistical analysis.

Quote:
Originally Posted by castaway01
However, I will point out that the chief cheerleader for Hong Kong here, Nitro, claims he only bets based on tote-board action. So, for all of the wonderful, amazingly clean Hong Kong racing he always trumpets, he's STILL wagering based on insider moves and supposed conspiracies. Sounds wonderful.
Correct.
It is “wonderful” when you can often glean an inside track of potential contenders in a race!

For those like me, who acknowledge the significance of money flow as a “Given”, we really could care less about where it’s coming from. What’s more important is it’s flow: When and Where its going in to the various betting pools. Insinuating “Conspiracy theories” is a feeble explanation for underestimating the objectives and intent of those on the inside: The connections. Who BTW don’t often publicly reveal their intentions, but would rather “Let their money do their talking" as objective evidence of their confidence.

Yet, you have to enjoy comments like these (At least I do); because it clearly demonstrates (once again) a complete lack of appreciation of the realities of the horse racing game from the perspective of the typical handicapper. I’m not going to pursue this very deeply, because it’s getting old.

However, I would enjoy reading a valid argument (from any credible source) as to how any typical handicapping methodology in general (Computerized or otherwise) can rationalize 2 very basic but critical aspects of the game from an Outsider’s perspective:
1) Can it predict whether or not each and every entry in a race is actually going to make an attempt to Win it?
2) How all of the past performance data or statistical analysis can determine the current physical and mental well-being of each horse entered in a race?

Although I won’t take this any further, you might want to consider what Bill Benter has personally stated. If you don’t recognize the name here’s a link:
http://www.worlds-greatest-gamblers....illiam-benter/
If you don’t respect his credibility, I would assume that you’re beyond his accomplishments and capabilities. So don't bother trying to comprehend the significance of his comments (below):

Excerpts from:
Computer Based Horse Race Handicapping and Wagering Systems:”
A Report by William Benter


INTRODUCTION
The question of whether a fully mechanical system can ever "beat the races" has been widely discussed in both the academic and popular literature. Certain authors have convincingly demonstrated that profitable wagering systems do exist for the races. The most well documented of these have generally been of the technical variety, that is, they are concerned mainly with the public odds, and do not attempt to predict horse performance from fundamental factors. Technical systems for place and show betting, (Ziemba and Hausch, 1987) and exotic pool betting, (Ziemba and Hausch,1986) as well as the 'odds movement' system developed by Asch and Quandt (1986), fall into this category. A benefit of these systems is that they require relatively little preparatory effort, and can be effectively employed by the occasional race goer.

The complexity of predicting horse performance makes the specification of an elegant handicapping model quite difficult. Ideally, each independent variable would capture a unique aspect of the influences effecting horse performance. In the author's experience, the trial and error method of adding independent variables to increase the model's goodness-of-fit, results in the model tending to become a hodgepodge of highly correlated variables whose individual significance's are difficult to determine and often counter-intuitive.

Additionally, there will always be a significant amount of 'inside information' in horse racing that cannot be readily included in a statistical model. Trainer's and jockey's intentions, secret workouts, whether the horse ate its breakfast, and the like, will be available to certain parties who will no doubt take advantage of it. Their betting will be reflected in the odds. This presents an obstacle to the model developer with access to published information only. For a statistical model to compete in this environment, it must make full use of the advantages of computer modeling, namely, the ability to make complex calculations on large data sets.

The odds set by the public betting yield a sophisticated estimate of the horses' win probabilities.

It can be presumed that valid fundamental information exists which can not be systematically or practically incorporated into a statistical model. Therefore, any statistical model, however well developed, will always be incomplete. An extremely important step in model development, and one that the author believes has been generally overlooked in the literature, is the estimation of the relation of the model's probability estimates to the public's estimates, and the adjustment of the model's estimates to incorporate whatever information can be gleaned from the public's estimates. The public's implied probability estimates generally correspond well with the actual frequencies of winning.


BTW the last 2 sentences express exactly how Mr. Benter was able to achieve his success.
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Old 07-14-2018, 09:18 AM   #10
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Que,

I completely enjoyed your article.

We miss guys like you in our forum.
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Old 07-14-2018, 10:02 AM   #11
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Welcome back, Que! One of the Founding Fathers!
And thanks for a great read.
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Old 07-14-2018, 11:41 AM   #12
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Nice post. Thanks for the link. Keep posting if you can
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Old 07-14-2018, 01:58 PM   #13
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Enjoyed your post.

Especially liked your list of influential handicapping books. I like it because the books were written long ago, and concepts from decades ago still win.

My go to library includes ---

Eliminate the Losers--Bob McKnight 1965

Total Victory at the Track--William L. Scott 1988

Pace Makes the Race--Howard Sartin and others 1990

Handicapping Magic--Michael Pizzola 2000

And anything by Andy Beyer.


Using the ideas in these books are the foundation for my handicapping method.
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Old 07-14-2018, 03:09 PM   #14
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Thanks to everyone for all the kind words. According to the PA’s forum records, I hadn’t logged onto this site since 02-04-2011, so I missed all the great posts regarding “The Gambler Who Cracked the Horse-Racing Code.” I think all the responses were excellent, and I don’t believe there was as single response I disagreed with or wasn’t enlightened by. Had I read all those comments beforehand, I probably wouldn’t have even posted again. But being back in Asia and blindly stumbling across the article stirred up a lot of great memories—and I knew that there must have been a lot of active commentary about the article on PA’s great website. I also really enjoyed reading the posts from some of the older members, e.g. PA, Dave Schwartz, Tom, C.J., etc., just to name a few--not to mention all the posts from the newer members as well. There is an incredible wealth of knowledge on this board—and its longevity holds some hope for the future of this game. It doesn’t matter whether you select your picks by your gut, or by your computer, it is your decision on how and if you want to continue playing the game.

I don’t know how the future will unfold for this great game… but I know I have chosen to withdraw from it. It wasn’t an easy decision, and it wasn’t a decision based on return-on-investment, intellectual challenge, or the pure enjoyment of watching the race unfold. As I stated earlier, I decided to devote more time to my financial models rather than to my handicapping methods. That was my decision.

I think I really started losing hope for this industry when I posted the following back in 2001, i.e. Rage against the Machine:

http://www.paceadvantage.com/forum/showthread.php?t=133

Rebates drastically changed the level of the playing field. Even “entropy”, a man who was much richer and smarter than myself, tried to warn everyone about the dangers of rebates back in 2004, i.e. Horse Racing's Biggest Bettors Get Rich Rewards

http://www.paceadvantage.com/forum/s...ad.php?t=11543

In my very last post, back in 2011 (before this thread), I outlined how you might be able to beat this game by building a better machine, i.e. High-Frequency Trading vs Robotic Wagering:

http://www.paceadvantage.com/forum/s...t=79617&page=3

For the most part, I described the machine I had already built… minus “the native API hardwired directly into the data centers or ADWs to submit wagers”—because I wasn’t allowed to do that. And because of the jurisdiction where I lived, I wasn’t allowed to get the highest rebate possible (or any rebates). And the part about collocating my computer server in Sacramento, CA and Mount Laurel, NJ where wagers are processed from all the tracks and ADW wagering platforms might have been a tad over-the-top. The colocation part, albeit common with high-frequency traders, was actually a very subtle reference to another concern of mine at the time. It wasn’t about placing bets at the last possible second, it was more about how long you could to wait before you could no longer withdraw your money after the start of the race—there would be no faster way to do that than to have your machine located at its very core. I never did it, and I could never prove anyone else did it, but I couldn’t prove that it wasn’t being done either–such was my mistrust of the system at the time.

And PA is right, the financial markets are harder to beat than people think, and there are thousands of more whales in the financial markets than there ever were in horseracing. But in the financial markets, the commissions are extremely low, and the take is difference between the bid and the ask—i.e. the playing field in the financial markets has never been more level than it is now.

With regards to Jai Alai, despite the fact that nobody knew anything about game at the time—including most of the players, I never made any significant money on the game. On paper, the odds on the players who actually knew how to play wasn’t much smaller than those who didn’t—sometimes it was like watching the Harlem Globetrotters play against an 8th grade basketball team at even odds. (I think their practice sessions went something like this... "Ok, now watch how I do this...", "oh s..."). But the pools were so small, a $20 wager just bought you the new favorite. In reality, the logistic costs, i.e. cost of admission, cost of the program, cost of driving between Sacramento and Reno, didn’t make sense even to an obsessed teenager like I was—plus I had no desire to have my old car break down at midnight on Donner Summit in January. Jai Alai didn’t last too long in Reno, I think management realized they could more money from a row of slots than an entire arena—plus the games took so long to finish (only baseball took longer) it just wasn’t worth the expense.

Since reading the subject article, I’ve already created tote readers for the Hong Kong win/place, quinella/quinella place, tierce, trio, first 4, and quartet pools. But I will only wager again if I believe the playing field is level enough to create an advantage, which in my case, I have my doubts. Since gambling winnings in Hong Kong aren’t taxable, and I am not eligible for the 10% rebate on my losing wagers—I think I’d be starting with a significant disadvantage. But if they introduce Jai Alai next year, I might give it another go.

Since I no longer maintain a database, and I don’t follow the races that often anymore, I’m not sure if I have that much more to contribute, but it was great to reminisce and read some of the posts again.

And PA, if you ever have any questions about machine learning algos and the financial markets, shoot me an email.

Best of luck… Que
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Old 07-14-2018, 05:15 PM   #15
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Nitro... thanks for posting the link to the posts. I also agree with everything in your post. Its certainly not the only way to try to beat the game, but it was the same methodology I used--and the same methodology I would use again if I had it do all over.

PA... I forget to congratulate you on your 500 posted picks with a positive ROI! I remember that was one the challenges that we used to make years ago when this board started. Only a few people even dared to try the challenge, and only a small percentage of those who attempted actually succeeded. And to do it twice in row is a huge accomplishment!

Finally, I don't want people to misinterpret what I posted. I am not saying that this game can't be beat--yesterday, now, or tomorrow. PA just proved you could, and I think CJ's numbers proved you could too. And I know there are all sorts of ways to try to beat the game; but for a systematic bettor like myself, I sincerely believe that unless you are getting a substantial rebate, beating the game is much harder now than it was before.

Que.
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Last edited by Que; 07-14-2018 at 05:24 PM.
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