Small Sample Trend Demo

[traynor]

Modeling is weird, and rarely works out for the dogmatic developers intent on leveraging complex analytical techniques to gain a "statistical advanage." Specifically, building predictive models (in contrast to building close-to-worthless descriptive models) requires a much higher level of pattern-recognition skills than most dogmatic developers are able to muster.

The current model in this demonstration is a good example. It showed a good ROI, good match rate, and good win percentage on those matches. Most bettors would jump all ove such a model, and would have been betting with both hands on the last 13 races--in which 11 lost, and the two that won returned less than even money. This is the time in the life of a model in which the timid and the I-only-trust-statistics bettors tend to stop and think, "I don't understand--my numbers aren't working. What could be wrong?"

I have yet to decide if this model can be tweaked into being predictive. However, at this exact point, I would not be surprised in the least if the current group of races generated better results than the previous groups of test races. That is not an implied validation of small sample models. It is an indication that the tendency to get caught in the switches is very strong in building such models.

Again, these are not "betting recommendations"--this is still only a test. However, I would suggest one might learn something of value about building small sample models by watching the results of tonight's races.

May06PACE R02_1 BaksidebarNlounge

May06PACE R04_4 YaUBetCha

May06PACE R13_1 Justified

[SchagFactorToWin]

Originally Posted by traynor

In general, finding something that shows a positive ROI over a chunk of past races is fairly easy. It is similarly easy to continually tweak that something by adding more races, adding and deleting races, or whatever process is used, and re-calculating it. In general, it will continue--at each tweaking--to appear to have been "profitable" in those past races.

The point I am trying to make is that is a big reason why people lose--their "somethings" are utter nonsense when applied in the real world (by actually betting on them).[/i].

Every handicapper should read this repeatedly until it sinks in.

[traynor]

Results:

May06PACE R02_1 BaksidebarNlounge place

May06PACE R04_4 YaUBetCha FOOM

May06PACE R13_1 Justified place 39.40/1 paid $19.00

Models that go beyond the obvious are worth much more (to a bettor) than those indicating what everyone else sees. The results of the 13th race indicate this model may be one of such. Horses that the public lets go off at nearly 40/1--and come close to winning--means the model should not be abandoned as worthless just yet.

As for the "wisdom of crowds" the 1.10/1 favorite--Kansas Wildcat--finished third. I won't bore you with conjecture about exacta and trifecta payoffs. I assume you can work out for yourself what kind of leverage 40/1 shots in one of the top two positions can do for your bottom line.

[traynor]

Of the components of the original small sample demo, NONE met the basic criteria after additional races were added. That simulates building a model from a small sample of races, then wagering on the selections of that model as if a small sample represented a rational view of "reality." The ONLY thing a small sample represents is a description of a small number of events. There is nothing "predictive" about it at all--that is an illusion created by what seems to be a pattern, but is only anomalies in an otherwise perfectly normal distribution of discrete events sprinkled around a baseline.

To give you some idea of how thoroughly one can deceive himself or herself (and anyone foolish enough to take her or his "advice"), a "new" model--based on the addition of more races has emerged that meets the original criteria set for the original small sample demo:

Dec07 In 188 NON-SELECT Pace races 11 14 17 18 in 32 17.02 % MIQR 6.25 Won 40.63 % ROI 1.47 72.60 7

Dec07 In 188 NON-SELECT Pace races 20 21 23 25 in 32 17.02 % MIQR 5.73 Won 53.13 % ROI 1.79 18.00 6

[traynor]

The below should make clear why I think anyone risking money on a small sample of races is in for a fall. At any point, "positive ROI models" can be extracted from a set of races. Those models are worthless for wagering purposes.

Similarly, by continually tweaking the set of races used as the sample (adding new races, deleting old races) the illusion of profitability is maintained. "New" patterns (just as illusionary as the old patterns) will continue to appear. Just like the "new" patterns in the post above. It all looks good on paper, and in the computer output, but is pretty much worthless for betting.

The most basic test should be applying the model to a different set of races. If the model is predictive, it will select (approximately) the same number of matches, the same number of wins, the same MIQR, and the same ROI in a new group of races.

Bear in mind the demo model is not some wild-eyed, wishin' and hopin' nonsense that some seem to think passes for "handicapping." In particular, the distortion of unusually high mutuels (that is guaranteed to make any sample less than 5000 or so races extremely misleading) has been eliminated. I think anyone who fails to take that fundamental step in analyzing his or her data only does so because she or he knows out of the gate that it is worthless.

Nov20 In 102 NON-SELECT May Pace 12 15 17 19 in 18 17.65 % MIQR 5.45 Won 44.44 % ROI 1.43 105.40 3
Dec07 In 188 NON-SELECT May Pace races--ROI negative over entire sample

Nov20 In 102 NON-SELECT May Pace 13 12 17 19 in 21 20.59 % MIQR 5.16 Won 47.62 % ROI 1.47 105.40 4
Dec07 In 188 NON-SELECT May Pace races--ROI negative over entire sample

Nov20 In 102 NON-SELECT May Pace 13 14 17 19 in 21 20.59 % MIQR 5.16 Won 47.62 % ROI 1.47 105.40 4
Dec07 In 188 NON-SELECT May Pace races--ROI negative over entire sample

Nov20 In 102 NON-SELECT May Pace 13 15 17 19 in 17 16.67 % MIQR 5.45 Won 47.06 % ROI 1.52 105.40 3
Dec07 In 188 NON-SELECT May Pace races--ROI negative over entire sample

Nov20 In 102 NON-SELECT May Pace 13 17 19 36 in 19 18.63 % MIQR 5.56 Won 47.37 % ROI 1.55 105.40 4
Dec07 In 188 NON-SELECT May Pace races--ROI negative over entire sample

Nov20 In 102 NON-SELECT May Pace 14 10 17 19 in 22 21.57 % MIQR 5.20 Won 45.45 % ROI 1.41 94.40 4
Dec07 In 188 NON-SELECT May Pace races--ROI negative over entire sample

Nov20 In 102 NON-SELECT May Pace 14 11 15 19 in 18 17.65 % MIQR 5.50 Won 44.44 % ROI 1.44 94.40 4
Dec07 In 188 NON-SELECT May Pace races--ROI negative over entire sample

Nov20 In 102 NON-SELECT May Pace 14 11 17 19 in 20 19.61 % MIQR 5.20 Won 50.00 % ROI 1.55 94.40 4
Dec07 In 188 NON-SELECT May Pace races--ROI negative over entire sample

Nov20 In 102 NON-SELECT May Pace 14 12 17 19 in 23 22.55 % MIQR 5.73 Won 47.83 % ROI 1.61 105.40 4
Dec07 In 188 NON-SELECT May Pace 14 12 17 19 in 33 17.55 % MIQR 5.73 Won 33.33 % ROI 1.12 105.40 4

Nov20 In 102 NON-SELECT May Pace 14 13 17 19 in 23 22.55 % MIQR 5.73 Won 47.83 % ROI 1.61 105.40 4
Dec07 In 188 NON-SELECT Pace races 14 13 17 19 in 33 17.55 % MIQR 6.54 Won 39.39 % ROI 1.48 105.40 5

Nov20 In 102 NON-SELECT May Pace 14 15 17 19 in 20 19.61 % MIQR 6.11 Won 45.00 % ROI 1.60 105.40 5
Dec07 In 188 NON-SELECT May Pace races--ROI negative over entire sample

Nov20 In 102 NON-SELECT May Pace 14 17 19 36 in 20 19.61 % MIQR 5.60 Won 45.00 % ROI 1.49 105.40 6
Dec07 In 188 NON-SELECT May Pace races--ROI negative over entire sample

Nov20 In 102 NON-SELECT May Pace 15 12 13 19 in 18 17.65 % MIQR 5.38 Won 44.44 % ROI 1.42 94.40 4
Dec07 In 188 NON-SELECT Pace races 15 12 13 19 in 41 21.81 % MIQR 4.84 Won 39.02 % ROI 1.14 72.60 6

Nov20 In 102 NON-SELECT May Pace 15 13 14 19 in 18 17.65 % MIQR 5.38 Won 44.44 % ROI 1.42 94.40 4
Dec07 In 188 NON-SELECT May Pace races--ROI negative over entire sample

[traynor]

So, is it all hopeless? Not at all. I am still looking at one component, that may just turn out to be predictive. This component is the one that selected Justified last night. It also selected the 105.40 winner in the sample chunk of races used initially. I especially like that last number--5--which is the maximum number of losses between wins.

Nov20 In 102 NON-SELECT May Pace 14 13 17 19 in 23 22.55 % MIQR 5.73 Won 47.83 % ROI 1.61 105.40 4
Dec07 In 188 NON-SELECT Pace races 14 13 17 19 in 33 17.55 % MIQR 6.54 Won 39.39 % ROI 1.48 105.40 5

[traynor]

May12PACE R06_4 KennansNancyLee

[traynor]

Originally Posted by traynor

May12PACE R06_4 KennansNancyLee

Won $4.80. Not exactly something to brag about, but a winner is still better than a loser.

[eurocapper]

Originally Posted by traynor

Bear in mind the demo model is not some wild-eyed, wishin' and hopin' nonsense that some seem to think passes for "handicapping." In particular, the distortion of unusually high mutuels (that is guaranteed to make any sample less than 5000 or so races extremely misleading) has been eliminated. I think anyone who fails to take that fundamental step in analyzing his or her data only does so because she or he knows out of the gate that it is worthless.

Maybe I'm wrong but I get the impression you are saying the crowd can be both right and wrong, by taking it into account in the model building stage but (as I gather from other posts) ignoring it in the analysis/betting stage. Why not ignore it and mutuels consistently?

[traynor]

Originally Posted by eurocapper

Maybe I'm wrong but I get the impression you are saying the crowd can be both right and wrong, by taking it into account in the model building stage but (as I gather from other posts) ignoring it in the analysis/betting stage. Why not ignore it and mutuels consistently?

Easy. That is the only way to build a realistic model for wagering. If it is strictly for win percentage--ignoring mutuel prices--it is rarely profitable. ROI is a compound of (average, mean, cleaned, adjusted, whatever) mutuel price and win percentage. Ignoring mutuel prices completely would effectively mean ignoring ROI--not a good thing for betting.

[traynor]

Maywood 12/13 -- Nothing fits the model in tonights races.

[traynor]

May19PACE R04_5 KennansNancyLee

[traynor]

Originally Posted by traynor

May19PACE R04_5 KennansNancyLee

Won at $2.40. Ugh.

[traynor]

Maywood 12/20 -- Nothing fits the model in tonights races.

[traynor]

Nothing fit the model last night. One race tonight.

May27PACE R03_4 RichessNestor