Testing Overlays

[pandy]

As some of you know, I do a lot of testing of handicapping angles and methods, both for my own betting and for my books and software that I sell. Lately, I've been using a new website, trackyourplays.com, which makes it easier for me run multiple tests because it automatically tracks results and ROI. It's not my website.

One of the things I'm working on is a new set of speed and pace ratings generated from averages. In my book, Speed And Class Handicapping, I used "best of last two on the same surface" to create the average speed figure. But now I've added an average of the best three figures in last five starts on the same surface, and also created two different type of compounded pace figures based on the same pacelines. I don't think that using one paceline is the best approach and my testing verifies this.

Another thing I'm testing, something that has always been a puzzle for handicappers is, do you play your top pick, or do you handicap contenders and then look for value? So say you handicap a race and come up with four horses ranked in order of preference. Regardless of what method you're using to handicap, I think you could make a case that you should never bet the favorite. So if your top pick is the favorite, you should either pass the race, or look over your other three ranked horses to see if there's any value there. But I'm not sure that you should ever bet the second choice, either. The first two choices win around 54% of the races, but the value is usually in the horses that win less often... it's sort of a paradox because you have to find the best value among the horses that are less likely to win the race.

[GBL]

"I think you could make a case that you should never bet the favorite."

I am surprised that someone would think this way.

Yes, it's true that bettors should consider the aspects of risk vs. reward, ROI and etc. before investing but implying that one should 'never' bet the favorite is plain wrong and ridiculous.

There're true favorites and there're false favorites. Your statement implies all favorites are bad.

One need to distinguish between the true favorite and the false favorite. If you think that horse is a true favorite and in your assessment he has, let's suppose 50% chances of winning the race, and consequently you assigned him the odds of even-money. Now, the horse goes off as 8/5 favorite. Should you still go against him? That 8/5 makes him the overlay for you. Why not bet him then? For all intents and purposes you should jump on him and, actually, bet him heavy if you have slightest faith in your handicapping system.

[DeltaLover]

Originally Posted by pandy

As some of you know, I do a lot of testing of handicapping angles and methods, both for my own betting and for my books and software that I sell. Lately, I've been using a new website, trackyourplays.com, which makes it easier for me run multiple tests because it automatically tracks results and ROI. It's not my website.

One of the things I'm working on is a new set of speed and pace ratings generated from averages. In my book, Speed And Class Handicapping, I used "best of last two on the same surface" to create the average speed figure. But now I've added an average of the best three figures in last five starts on the same surface, and also created two different type of compounded pace figures based on the same pacelines. I don't think that using one paceline is the best approach and my testing verifies this.

Another thing I'm testing, something that has always been a puzzle for handicappers is, do you play your top pick, or do you handicap contenders and then look for value? So say you handicap a race and come up with four horses ranked in order of preference. Regardless of what method you're using to handicap, I think you could make a case that you should never bet the favorite. So if your top pick is the favorite, you should either pass the race, or look over your other three ranked horses to see if there's any value there. But I'm not sure that you should ever bet the second choice, either. The first two choices win around 54% of the races, but the value is usually in the horses that win less often... it's sort of a paradox because you have to find the best value among the horses that are less likely to win the race.

Getting the average of previous figures is not useful for handicapping and betting reasons. In contrary, in most of the cases such an approach will suppress your chances of catching career best performances, which is where most of the betting interest lies in.

Also using constraints like “same surface” or “same distance” make your process more conservative focusing to an easier to attack problem that is also solved pretty well by the betting crowd. Focusing on more challenging problems, like surface, distance or circuit switches is way more attractive as this is where most of the crowd miscalculations occur.

As far as the second part of your posting, I think you are asking the wrong question. Your best betting selection should not be decided by its ranking (meaning whether is your top selection of the fourth one) but from the possibility of the crowd to misestimate its angles regardless of how its final price will be shaped in the market. The crowd is really good in ABC handicapping so trying to beat it by forming a superior ranking of horses (meaning where your top picks will win more often than the pubic favorite for example) is simply a dream pipe that is impossible to accomplish. The best you can do is to detect the way the public is forming the pools (something that changes constantly through time and also differs from track to track) and try to “correct” any potential mistake before the crowd realize it and encapsulate it to its betting.

[jay68802]

I set a minimum odds I am willing to take on the win bet, 5-2. If I do not get that, I look at the exacta with the second and third choice. Minimum odds on the exacta is 8-1.

I, like you, use more than 1 race to evaluate a horse. My latest experiment is using the track variant in the process also. I simplified the variant to five categories. You would be surprised at how often a horse shows good performances on tracks with the same variant. Then today gets a surface that does not have the same variant and throws in a clunker. The reason behind doing this was because of another thread here, Late Odds Changes. I was tracking the late money and noticed that a lot of times the late money was not showing in the first few races of the day. My thinking is that people are trying to get a feel for how fast or slow the track is and adjusting their picks accordingly. GL.

[DeltaLover]

Originally Posted by jay68802

I set a minimum odds I am willing to take on the win bet, 5-2. If I do not get that, I look at the exacta with the second and third choice. Minimum odds on the exacta is 8-1.

As discussed in depth in the Odds changes thread, in todays game it is meaningless to rely on pre-race minimum odds; is simply does not work like this!

[jay68802]

Originally Posted by DeltaLover

As discussed in depth in the Odds changes thread, in todays game it is meaningless to rely on pre-race minimum odds; is simply does not work like this!

Then what exactly tells you when to bet and when not to bet? To me, this is simple. You bet when the odds on the horse are above what your win % is.

[headhawg]

[HalvOnHorseracing]

A person I worked with in the 1980's told me he had never been to a racetrack. He lives in Riverside and since I was at Santa Anita last week I asked him if he wanted to go and he said he'd come on Friday.

One of the things I was told very early in my racing career was that it is good betting to turn 4/5 shots into 7/2 shots. It can be done by using the horse in a combination bet.

Anyway there was an odds on horse in the 5th race on Friday. I told my friend I was just going to bet an exacta with that horse and the 1 horse. He bet $20 on the same exacta. It paid $9.80 for $2. In other words, we turned a 4/5 shot into almost a 4-1 shot.

Not the payoff of the century, but it makes the point that you can get a decent return on your investment, even with short-priced favorites, if you focus a combination bet properly.

My friend collected $98 for his $20 investment. Not bad for your first bet.

[pandy]

Originally Posted by GBL

"I think you could make a case that you should never bet the favorite."

I am surprised that someone would think this way.

Yes, it's true that bettors should consider the aspects of risk vs. reward, ROI and etc. before investing but implying that one should 'never' bet the favorite is plain wrong and ridiculous.

There're true favorites and there're false favorites. Your statement implies all favorites are bad.

One need to distinguish between the true favorite and the false favorite. If you think that horse is a true favorite and in your assessment he has, let's suppose 50% chances of winning the race, and consequently you assigned him the odds of even-money. Now, the horse goes off as 8/5 favorite. Should you still go against him? That 8/5 makes him the overlay for you. Why not bet him then? For all intents and purposes you should jump on him and, actually, bet him heavy if you have slightest faith in your handicapping system.

I get what you're saying, but that's a theory. Yes, in some instances the favorite may actually appear to be a good bet, but the problem is, no matter how good you are at handicapping, there isn't enough leverage there to show a long term profit on favorites. If the takeout was in single digits, maybe, but with the takeout 15% or higher, there just isn't enough room for error, and the rebates are too low on win bets to make up the difference.

Favorites are a false temptation. You hit a few overlaid favorites and you think you can bet them, but in the long run, they're a losing proposition. Of course, sometimes you have to use the favorite in exotics, but that's different. As win bets, they are fools gold. Theory is one thing, real life results is another.

[pandy]

Originally Posted by DeltaLover

Getting the average of previous figures is not useful for handicapping and betting reasons. In contrary, in most of the cases such an approach will suppress your chances of catching career best performances, which is where most of the betting interest lies in. .

I'm not saying that you can't use a single paceline, but I am saying that my testing has shown that averages are better for ROI over the long run. One thing you have to be very careful about is using the last line. For instance, just in the last two weeks alone, I've seen quite a few horses win off or horrible lines, but they were coming off a layoff of a few months and they ran back to their best lines from several races back. So whatever was bothering them, the trainer fixed it. They all paid double digit odds, too.

[pandy]

Originally Posted by HalvOnHorseracing

A person I worked with in the 1980's told me he had never been to a racetrack. He lives in Riverside and since I was at Santa Anita last week I asked him if he wanted to go and he said he'd come on Friday.

One of the things I was told very early in my racing career was that it is good betting to turn 4/5 shots into 7/2 shots. It can be done by using the horse in a combination bet.

Anyway there was an odds on horse in the 5th race on Friday. I told my friend I was just going to bet an exacta with that horse and the 1 horse. He bet $20 on the same exacta. It paid $9.80 for $2. In other words, we turned a 4/5 shot into almost a 4-1 shot.

Not the payoff of the century, but it makes the point that you can get a decent return on your investment, even with short-priced favorites, if you focus a combination bet properly.

My friend collected $98 for his $20 investment. Not bad for your first bet.

I agree, I use favorites in exotics, but they're bad win bets over the course of time.

[pandy]

Originally Posted by jay68802

I set a minimum odds I am willing to take on the win bet, 5-2. If I do not get that, I look at the exacta with the second and third choice. Minimum odds on the exacta is 8-1.

I, like you, use more than 1 race to evaluate a horse. My latest experiment is using the track variant in the process also. I simplified the variant to five categories. You would be surprised at how often a horse shows good performances on tracks with the same variant. Then today gets a surface that does not have the same variant and throws in a clunker. The reason behind doing this was because of another thread here, Late Odds Changes. I was tracking the late money and noticed that a lot of times the late money was not showing in the first few races of the day. My thinking is that people are trying to get a feel for how fast or slow the track is and adjusting their picks accordingly. GL.

That's a good point. There was a race at Aqueduct Saturday, Go Get The Money won his debut going 7f over the Aqueduct track in 1:26.2 and earned a big fig, 94 bris, and Timeform also had him as the clear top figure. Gleason won his debut at 7f at Tampa and went 1:23.3, almost three seconds faster!...but his figure was 85. Obviously, different track, much different variant. But I'm very suspicious of high figures earned in slow times, as I've mentioned before. The public made Gleason the 4/5 favorite, despite the fact that he won his debut for a much lower purse, and Go Get The Money was 8-5. Both horses lost but Gleason ran a fine second, Go Get The Munny was last and completely outrun. I would never bet a horse at 8-5 odds that ran once and ran slow. 8-5 is for fast horses.

[green80]

Originally Posted by GBL

"I think you could make a case that you should never bet the favorite."

I am surprised that someone would think this way.

Yes, it's true that bettors should consider the aspects of risk vs. reward, ROI and etc. before investing but implying that one should 'never' bet the favorite is plain wrong and ridiculous.

There're true favorites and there're false favorites. Your statement implies all favorites are bad.

One need to distinguish between the true favorite and the false favorite. If you think that horse is a true favorite and in your assessment he has, let's suppose 50% chances of winning the race, and consequently you assigned him the odds of even-money. Now, the horse goes off as 8/5 favorite. Should you still go against him? That 8/5 makes him the overlay for you. Why not bet him then? For all intents and purposes you should jump on him and, actually, bet him heavy if you have slightest faith in your handicapping system.

A horse you figure at even money and going off at 8/5 is just as good of overlay as the horse you figure at 10/1 and is going off at 16/1. If your system is correct you need to be all over him.

[pandy]

Originally Posted by green80

A horse you figure at even money and going off at 8/5 is just as good of overlay as the horse you figure at 10/1 and is going off at 16/1. If your system is correct you need to be all over him.

Again, that's a theory, and I get the theory, but it doesn't work in real life. Many years ago I said the same thing in some of my columns, but I was wrong. That's why testing is better than theory. A great handicapper, someone who is great at picking winners, is still not going to be able to show a profit on win bets on 8/5 shots, or favorites in general. If you can get to something like a 5% loss betting favorites, you're a master handicapper. Everytime I've had a good year and actually went back and checked the results, the favorites I bet only provided a mental stability that cut down on a series of losing bets, but they were not profitable. All of my profit came from longshot winners that I keyed in winning exotics. Most winning players get the bulk of their profit from several nice hits each year. 8/5 shots don't provide that, and you simply can't overcome the takeout with favorites.

There are also a lot more overlays in the higher odds range because it requires a really sharp handicapper to see that a 15-1 shot should actually be 6-1. But with favorites, everyone can see why the horse is favored.

Now, I agree, that it's good to have the ability to spot bad favorites and bet against them. But that doesn't mean that it's smart to bet on the horses that appear to be legit favorites. Bet against the bad favorites, pass the races where the favorite appears legit.

The best and fastest horse in the race still loses more than it wins, so you simply can't take short prices.

[pandy]

By the way, here's a simple test that anyone can do. After you handicap, narrow the race down to three horses, or four if the field is more than 10 horses. Now keep results of how you would do if you bet the shortest odds of those three horses, and bet the longhot odds of those three horses. If you are a good handicapper, the bet on the horse that goes off the longest odds, of the top three, should produce a higher ROI than the bet on the lowest odds horse.