Horse Racing ROI vs Stock Market

[badcompany]

Hall of Fame caliber stock market investors like Warren Buffet and Walter Schloss show a long term ROI of ~20%. With a 25% trifecta takeout, a bettor would need a ROI of 33% just to break even. So, would it not stand to reason that, unless the possible long term ROI for horseracing is greater than that of the stock market, showing a long term profit betting tris is impossible?

[Dave Schwartz]

Apples to oranges.

The stock market ROI is over the course of a year.

The horse player's over a single day.

A big, consistent player can turn his bankroll 50-125 times per year.

Example: Peter Wagner, who is repudited to wager $300m per year with a profit of around $30m, does so out of a $3m bankroll. Therefore, he is making $30m profit from $3m investment.

Let's see any wall street investor match growth like that!


Regards,
Dave Schwartz

[PaceAdvantage]

Originally Posted by Dave Schwartz

Let's see any wall street investor match growth like that!

Me thinks you'd be shocked. There are plenty of silent types out there who you'll never hear about making gobs and gobs of money in the financial markets (there's more to life than just stocks you know).

[Dave Schwartz]

PA,

I recently read a Trend Following: How Great Traders Make Millions in Up or Down Markets, suggested by someone here.

There were plenty of traders mentioned who had averaged 25-30% for 30 years!

However, I do not think there is anyone doing 1,000% per year consistently.


Dave

[Valuist]

Ken Heebner has been the top fund manager over the past 10 years or so and he was getting 20% plus.......until this year. His fund is down almost 50% this year so far.

[Dave Schwartz]

The majority of the fund managers in that book have made huge money during bear markets.

I would suggest that book as a "good read" but understand it is about them more than their specific methods.


Dave

[badcompany]

Originally Posted by Dave Schwartz

Apples to oranges.


Example: Peter Wagner, who is repudited to wager $300m per year with a profit of around $30m, does so out of a $3m bankroll. Therefore, he is making $30m profit from $3m investment.



Regards,
Dave Schwartz

So he's betting six million a week?

Where could he make these bets that he wouldn't be a bridgejumper turning his overlays into 1/9 shots?

[Robert Fischer]

FG dime supers

[Dave Schwartz]

So he's betting six million a week?

More in the summer and less in the winter, but, on average, yes. Spreads across multiple horses and multiple pools.

If you find that hard to believe get this... there is another player equal to him and a third player who wagers twice as much.

The top 6 wagered around $1.6 billion last year.


Dave

[raybo]

Originally Posted by badcompany

Hall of Fame caliber stock market investors like Warren Buffet and Walter Schloss show a long term ROI of ~20%. With a 25% trifecta takeout, a bettor would need a ROI of 33% just to break even. So, would it not stand to reason that, unless the possible long term ROI for horseracing is greater than that of the stock market, showing a long term profit betting tris is impossible?

Your talking apples and oranges.

How long is "long term"? Let's just say a year in the stock market, which, by the way, isn't anywhere near "long term". But, just for grins, let's say a year. 20% per annum would be considered a pretty good investment vehicle in the market. So, if your original investment was $1000, at the end of a year you'd have $1200. There are handicappers averaging $200 profit, or more, daily!

Superfecta takeouts are very high also, but if I couldn't turn over an original bankroll of $1000, on the average, at least twice monthly (and that's playing only 2 or 3 days per week and only 1 or 2 tracks), I'd quit handicapping.

[Valuist]

Originally Posted by Dave Schwartz

The majority of the fund managers in that book have made huge money during bear markets.

I would suggest that book as a "good read" but understand it is about them more than their specific methods.


Dave

I really wonder about that. Like Jeff Macke on Fast Money says, "bear markets get everyone, even shorts". The strongest, most vicious rallies are bear market rallies, usually due to short squeezes. The hedge funds may have survived the tech meltdown, but they are getting murdered now. And I wonder if Bernie Madoff was one of those mentioned in that book.

[Dave Schwartz]

This book is quite interesting to me. It actually has germinated a seed for an entirely different statistical paradigm; different than anything I have ever heard anyone speak about.

If I can figure out how to get it implemented, it might just change the way we handicap. But that is a long time down the road and outside the scope of this conversation.

Here are the featured traders:

Bill Dun
John W. Henry
Ed Seykota
Keith Campbell
Jerry Parker
Salem Abraham
Richard Dennis
Rcihard Donchian
Jess LIvermore & Dickson Watts


Regards,
Dave Schwartz

[asH]

Originally Posted by Dave Schwartz

Apples to oranges.

The stock market ROI is over the course of a year.

The horse player's over a single day.

A big, consistent player can turn his bankroll 50-125 times per year.

Example: Peter Wagner, who is repudited to wager $300m per year with a profit of around $30m, does so out of a $3m bankroll. Therefore, he is making $30m profit from $3m investment.

Let's see any wall street investor match growth like that!


Regards,
Dave Schwartz

Hey Dave,
the difference is exposure, in your example the initial bankroll ($3M) is exposed 100 times..unless you compare this example to a day trader's profits it's apples to oranges

differences between the two markets : financials are for money about money, spare no expense. Horse racing, in general is seemingly counterproductive (less reliable).
asH

[LottaKash]

Originally Posted by Dave Schwartz

. It actually has germinated a seed for an entirely different statistical paradigm; different than anything I have ever heard anyone speak about.

If I can figure out how to get it implemented, it might just change the way we handicap. But that is a long time down the road and outside the scope of this conversation.

Regards,
Dave Schwartz

Dave, You have my full attention in this matter.......Now, please go to work....Stirs the imagination.....

best,

[asH]

I believe you would have to divide profits by initial investment multiplied by exposure factor to come to a fair value.


asH