combining losing factors into profits (?)

[Aussieplayer]

Hey guys,

Good thread. In the past (and over more than just the one rating method), I have tested various analyis processes (re: taking into account the public's odds) that are perhaps a little more "practical" for some (read, easier, lol), than some of the methods talked about here. I'd like your (esp. Rick & GT's) thoughts.

I've looked at all the various combos of my actual "raw" odds vs. public's actual odds, rank vs rank, actual vs rank, rank vs actual etc. etc. etc. etc.

By far, the analysis that has consistently shown to be the best (for me), is simply degree of overlay.

After digesting all the thoughts of this thread, and similar comments in others, I can't help but wonder if (in all reality), this method "takes into account" the public odds (which is what we want to do), just as "much" as any fancy mathematical analysis? That's not meant to sound like a downer on the maths stuff BTW.

It just strikes me that the crude method I've been using to analyse odds lines really DOES account for the public - and is very easy!!

Hope that helps someone.

Cheers
AP

[GameTheory]

If it works, it works.

The idea of mathematically combining a line with the public's is to produce a line more accurate than either of them. But if you just use your line and insist upon a certain degree of "overlayness" and it works, then it works.

But you might find that certain odds ranges require a greater margin than others due to bias in your personal line, and the blending process helps smooth that out and you can just bet any overlay with the required edge with confidence. But it is more trouble to do all that true, and not necessarily worth the effort.

[Aussieplayer]

Hi GT,

You said, "But you might find that certain odds ranges require a greater margin than others due to bias in your personal line, and the blending process helps smooth that out and you can just bet any overlay with the required edge with confidence. But it is more trouble to do all that true, and not necessarily worth the effort."

.....This is exactly what I was trying to lay out, lol

What I am proposing to you, is that this method should/could/would work as well, or is as relevant, (perhaps), as more mathematical tests. What thinks you?

Perhaps it would have been clearer with an example.
You might find you can bet your top rated between 1 and 2 times your assessed price. Under that and it loses, over 2 times and you have....a false overlay!!
Of course you can then break this down into various race profiles, betting profiles (where the fav is in your contenders), your actual rated odds etc. But that's another story.

Cheers
AP

[GameTheory]

Obviously you need some amount of margin from (odds greater than) your line to have an edge. But you might find that you need a greater margin at different odds.

For instance, the public says 3-1, you say 2-1, you bet. You find this is a profitable situation.

Now, the public says 6-1, you say 7/2, and you find that in this situation you only break even or even lose money. What's going on? You may need 5/2 or better on your line when the public says 6/1.

A mathematical blending can smooth that out so a 20% edge (for example) always means a 20% edge no matter what the actual odds.

I have a feeling I'm making this more confusing...

[Aussieplayer]

....GT,
I understand. I think. You seem to be saying that I should go a step further, and actually change my line. In your example, when my line has 7/2 and public says 6/1, my line should be changed to 5/2. But why? What difference is changing my line going to do?

I would rather know that when my top choice is rated (by me) at 7/2 and the public says 6/1 (or more) that I have a "no play."
If you see what I mean.......

[GameTheory]

You should change your line the opposite way.

The odds on your line should move towards the public (in general), but the amount it should move is dependent on both the odds you initially assign and the the public odds. Your 7/2 might become a 5/1 and not enough edge to justify a play. If it started out at 5/2, it might become 4/1 with a still acceptable edge. How much edge you require is up to you but you have to leave some room for error.

I think you will find the greater the difference between the your line and the public's, the greater your line is in error (when the public odds are higher than yours) and the overlay is never quite as big as you think it is. Using the regression technique to blend the lines removes much of this error, and then an overlay is an overlay, period.

These ideas are all straight from Benter, by the way.

[kenwoodall]

Of course, overly complicated handicappong can cause loss of focus! My show sucess rate is high enough not to worry about odds, and my win picks are very strong picks or overlays with positives not based on speed or class. Too many bettors lose by betting too heavily ob speed and class, causing a personal underlay.
Aussieplayer- email me at kensav@webtv.net. University of Sydney has a great website on equine research and Australian track analysis!

[Rick]

AP,

The only reason to combine your line with actual odds is if you want a more accurate line than either one alone. That would allow you to really say you had a 20% overlay when the probability ratios showed that. But if your willing to ask for say a 50% overlay in probabilities and realize that your actual overlay won't be that large, then just use your calculated odds alone. I think we only got off on that tangent because there has been so much discussion of what the most accurate line would be.

I'm not really for complicating things at all. I don't even compare to actual odds, partly because final odds are not available before the race and partly because of convenience. I'm not sure what you guys have available there. You must have some sort of morning line odds or "starting price" or something. Do you have bookies as well as parimutuel betting?

As far as testing for statistical significance goes, it's helpful to find out as soon as possible, with a smaller sample, how much faith you should put in your method still working in the future. If you have a very large sample with a good ROI it's probably significant even if you can't show exactly what level of confidence to assign to it. I've tested several samples for my method in the past but I won't be bothering to repeat that after thousands of races and almost the same ROI that I used to prove significance before.

[Handy Cap]

2 things.....

number 1, great great thread...I believe maybe the best I have read on PA!

number 2, So let me get this straight GT...If your odds say 2-1...and the public says 7-1 or greater perhaps...then theres a good chance that you have given the animal too much credit, and should sway his odds upward?? Am I on the same page here?

[formula_2002]

It might be of interest for some to view an excel table I have posted on my web page. You should be able to print it out

"How well the public does in determining the true winning odds in horse racing for over 91,000 uncoupled horses"

The table list the stats for segmented odds ranges .10 to 20-1.

I also indicate my odds line in relationship to the public's

Pehaps some one can offer advice on how I can get and edge, using my odds line.

Web page is my personal page, and is not a commercial site.

Thanks
Joe M

[GameTheory]

Originally posted by Handy Cap

number 2, So let me get this straight GT...If your odds say 2-1...and the public says 7-1 or greater perhaps...then theres a good chance that you have given the animal too much credit, and should sway his odds upward?? Am I on the same page here?

Yeah, exactly.

[cj]

What difference would it make to adjust your odds upward? Regardless, the horse would still be considered an overlay up until you made him the same odds as the public. It this point, why make a line? I'm saying adjusting your odds line is a waste of time, like Rick said, just demand a higher % overlay.

CJ

[Dave Schwartz]

CJ,

The concept is well-grounded in reality. We do the same thing.

COnsider this: You have 2 horses that you both give a 25% probability to (or 3/1 if you prefer). One of them goes off at even money and the other at 20/1. Do you really believe both of those horses have the same probability?

So, in my view, the issue becomes not, "Should I move my line?" but "How MUCH should I move my line?"

Regards,
Dave Schwartz

[GR1@HTR]

Originally posted by GameTheory
As you know, an odds line is the same thing as a set of probabilities that represent the chances of each horse to win the race according to you, the public, or whoever is determining the line in question. (i.e. 2/1 = 33% chance of winning, expressed as a probability is .33) The probabilities in a race must all add up to be exactly 1.0. With the public's odds, you have to renormalize them to add up to 1.0 because of the takeout. For the rest of this discussion we'll assume we've already done that.

For those not familiar with our lovely tote system, the total probabilty of all the horses winning is not 100%. The total of the percentages is about 125%.

Example:

 FG  2/9/03   Race 1   6f dirt for 4 YO & Up  Fillies & Mares
                                                                               
 C25000 Track fast  Time  22.99 47.20 59.80   113.16 Weather cloudy
                                                                               
 ----------------------------------------------------------------------------- 
  sc horse             pp st  2f      4f                5f      6f        odds
 ----------------------------------------------------------------------------- 
  4 Ice Queen           4  6  3-2     2-0.1             1-0     1-0        2.9
  2 Pearly Starnet      2  4  5-2.5   4-3               4-2.5   2-0.05    14.8
  7 Plush               7  1  6-4     5-4               5-5     3-3.5      5.6
  6 Zarb's Love         6  2  2-1     1-0               2-0.1   4-4        4.1
  1 Sacred Gem          1  5  4-2.5   6-5.5             6-6.5   5-4.25     1.2
  5 Just Robin          5  3  1-0     3-1               3-1     6-7.25    22.7
  3 Hilga               3  7  7-5     7-7.5             7-9.5   7-7.5     17.4
 ----------------------------------------------------------------------------- 
                                                                               
             4  Ice Queen..................   $7.80    $4.20    $3.40
             2  Pearly Starnet.............            $9.80    $5.40
             7  Plush......................                     $5.80
                                                                               
              EX 4-2 $86.20
              QU 2-4 $42.20
              TF 4-2-7 $397.60

Horse#...........Odds........Probablity based on final odds
#4.................2.9.............2564
#2.................14.8...........0633
#7..................5.6...........1515
#6..................4.1...........1961
#1..................1.2...........4545
#5.................22.7..........0422
#3.................17.4..........0543

The sum of the above probabilities is 122 for the above example vs the assumption that the total of the odds is 100 or 100%

[GameTheory]

Originally posted by cjmilkowski
What difference would it make to adjust your odds upward? Regardless, the horse would still be considered an overlay up until you made him the same odds as the public. It this point, why make a line? I'm saying adjusting your odds line is a waste of time, like Rick said, just demand a higher % overlay.
CJ

I never said, "This is something everyone should do." It is something to do if you want or require the most accurate probabilities possible. Most people don't care (not that they necessarily should) about the degree to which they have an edge, only that they have one.

But if you are varying your bet size, for instance, with the amount of the perceived edge, you'd better take care to get it as close as possible. If all you are interested in is, "Do I bet this $20 on this horse or don't I?" then you're right, it is probably a waste of time and you just need to demand a decent margin to assure value.

It is also a technique which lets you know how much "value-added" information is in your own line. If after making a blended line via regression or similar, you find your line to more or less disappear (i.e. the blended line is no different than the public line), then you know your line is crap and is adding no information not already accounted for by the public odds.

Whether or not any of these ideas are of any worth to your particular approach is up to you...