Predicting Your Profit (or Loss)

[baconswitchfarm]

Originally Posted by traynor

Meaning that--as Thaskalos indicated--your return goes up and down rather than remaining relatively stable?

My wagering almost always lie in those windows. In 2012 I had one losing month after rebate. All the other months the profits fluctuated greatly. I think I played the same and the payoffs and outcomes differ. Some days I play well and lose. Other times I feel I played poorly but was rewarded for my incompetence.

[Cratos]

Originally Posted by DeltaLover

I do not think NPV is suitable for horse betting (altough even if it was this would not have been a reasonable justification for your 'Really' question, as it is quite possible for a question to have multiple valid answers)

Two reasons why I think like this are the following:

1) NPV is assuming a known (or estimated) Cash Flow (which is not known when betting horsess

2) NPV is adjusting for risk modifying the discount rate (clearly does not apply to betting horses)


Traynor's question can be answered very well having an initial assumption of the combination of expected value and standard devivation over some time increament, applying the Central Limit.

The logic I am describing here

http://www.paceadvantage.com/forum/s...0&page=3&pp=15

can be easily modified to answer the original question

My "really" response wasn't an affront to you, but a surprise to me that it was suggested and I apologize if you felt that way. However from a practical application I find the NPV methodology more useful in this case than the central litmit theory which is all about theory and conjecture and not about practical application.

[Twenty Seven]

Originally Posted by thaskalos

My wagering total remains in the same ballpark month to month...but my bottom line fluctuates wildly.

I would imagine that this would be case for other exotics bettors as well.

This is my experience as well. Luckily, I can trade on Betfair, which is where most of my profits accrue. (other than that, I focus on P3s and P4s.)

Andy Beyer said it back in the early 80s in The Winning Horseplayer, and it hasn't aged: he knew very few people who made a living betting in the win pool on overlays. Most of the successful players came from good handicappers who still had to have a significant measure of luck to hit their handful of scores a year in the exotics that made them the lion's share of their profits.

But no one wants to hear about risk. There's supposedly a rainbow of certainty out there just waiting to be seen.

[DeltaLover]

Originally Posted by Cratos

My "really" response wasn't an affront to you, but a surprise to me that it was suggested and I apologize if you felt that way. However from a practical application I find the NPV methodology more useful in this case than the central litmit theory which is all about theory and conjecture and not about practical application.

No problem at all...

The truth is that trying to predict the behavior of a bankroll is more about theory rather than real world. The assumptions needed for any method include a lot of uncertainty thus any expectation should only be seen as a rough estimate and nothing more...

[traynor]

Originally Posted by Twenty Seven

This is my experience as well. Luckily, I can trade on Betfair, which is where most of my profits accrue. (other than that, I focus on P3s and P4s.)

Andy Beyer said it back in the early 80s in The Winning Horseplayer, and it hasn't aged: he knew very few people who made a living betting in the win pool on overlays. Most of the successful players came from good handicappers who still had to have a significant measure of luck to hit their handful of scores a year in the exotics that made them the lion's share of their profits.

But no one wants to hear about risk. There's supposedly a rainbow of certainty out there just waiting to be seen.

I don't know how much luck is a factor, but I do know that many track their major scores to a handful of races within a given time frame. I have literally never encountered anyone who considered a slight percentage edge as meaningful (or believed that it existed, other than in retrospect).

That may be due to the fact that serious bettors tend to be a bit more aggressive than the average. I think if anyone actually believed they had some consistent 5% or 10% advantage they would set about taking all the marbles as fast as they could and then head for the Costa del Sol or wherever to enjoy it. There seems to be a distinct dichotomy between the "advantage player" and serious bettors. The former seeks certainty and "guaranteed" results. The latter knows that the only survival is to go for the whole enchilada at every opportunity.

[Maximillion]

Originally Posted by Twenty Seven

This is my experience as well. Luckily, I can trade on Betfair, which is where most of my profits accrue. (other than that, I focus on P3s and P4s.)

Andy Beyer said it back in the early 80s in The Winning Horseplayer, and it hasn't aged: he knew very few people who made a living betting in the win pool on overlays. Most of the successful players came from good handicappers who still had to have a significant measure of luck to hit their handful of scores a year in the exotics that made them the lion's share of their profits.

But no one wants to hear about risk. There's supposedly a rainbow of certainty out there just waiting to be seen.

Everybody is different.For myself, Im finding I am much better off placing my money on win wagers.I love exactas, trifectas etc. but Im losing money on them and weeding them out of my game.

[Greyfox]

Originally Posted by traynor

I think if anyone actually believed they had some consistent 5% or 10% advantage they would set about taking all the marbles as fast as they could and then head for the Costa del Sol or wherever to enjoy it.

We agree to disagree. Comfort zone is a huge factor w.r.t. bet size.
I suppose your operative word is "consistent."

[Greyfox]

Originally Posted by Greyfox

We agree to disagree. Comfort zone is a huge factor w.r.t. bet size.
I suppose your operative word is "consistent."

I should have added to the above, the "edge" for me, is based on a very small number of races that I am willing, and interested, in handicapping each day.
I don't have the energy or interest, to do more than a few per day.
There are other things in life.
Also, until you spend what you win at the track elsewhere, you haven't earned a nickel, as I see it.

[Twenty Seven]

Originally Posted by Maximillion

Everybody is different.For myself, Im finding I am much better off placing my money on win wagers.I love exactas, trifectas etc. but Im losing money on them and weeding them out of my game.

But by "better off", do you mean "profitable"? Because without rebates, and in today's brutally competitive environment, you have to overcome the single race takeout of at least 16% just to break even.

The added trouble is that odds frequently change after the off, so you don't know what value, if any, you're getting. Also, markets are much more efficient in win pools than in various exotics.

I'm with you on exactors and triactors, though. I used to hit some nice triactors many, many years ago, but the extra takeout -- at least 25% at most tracks -- is tough to overcome, at least for me. I admire people who can beat the game on those bets.

[traynor]

Originally Posted by Greyfox

We agree to disagree. Comfort zone is a huge factor w.r.t. bet size.
I suppose your operative word is "consistent."

Perhaps. My comfort zone is having all the marbles. Things change. Today's cash cow is tomorrow's drain on assets and resources. It seems reasonable to me to apply available leverage strongly, rather than tiptoeing timidly around the edges because it is more comfortable. I will have time to be comfortable when I have all the marbles. Until them, it is all just playing and pretend scorekeeping.

I understand that many do not share my view, and approach wagering like some endlessly replenishing fountain of wealth. That seems completely out of touch with reality. I am very definitely not the only one after all the marbles. Just one of the nicer ones.

[traynor]

Originally Posted by baconswitchfarm

My wagering almost always lie in those windows. In 2012 I had one losing month after rebate. All the other months the profits fluctuated greatly. I think I played the same and the payoffs and outcomes differ. Some days I play well and lose. Other times I feel I played poorly but was rewarded for my incompetence.

I know exactly what you mean. I have been "absolutely certain" about the outcome of three races in my life--and lost all three. Some of the best returns I have had were on races that I was almost indifferent to, bet because they fit a pattern with a decent expectation, and ignored until I saw the results the following day.

[traynor]

Originally Posted by CincyHorseplayer

Peaks and valleys.

Usually my really bad losing streaks last for either about a racing week and/or 25-40 bets where I'll lose about 38% of my capital.Scary and humbling.

I've had win betting streaks of 40% hit/4-1 avg mutuel for up to 12 racing days before I'll have a series of 2 for 10 etc.In exotics I have had a 10 day run of 229% ROI before cooling,but they are usually shorter.Last year I only had 1 mild run of 4 days with a 120%+ ROI.The rest of the year I was a turd.I aim to change that this year.

One of the things I found advantageous is to code a function that increments a counter with each loss and re-sets to zero after a win. Going through a big chunk of races gives me a good idea of the number of races I can expect to lose in a given sequence, so that if reality exceeds the theory, I know about it.

For example, in a base of 1000 races, a particular pattern wins whatever percentage, with a maximum number of losses of some number. If I am betting on that model and the losses reach that number, I might want to take a long, hard look at what I am doing to make sure some other factor (the mysterious "confounding variable") is not influencing the results.

I understand that calculating standard deviations can give me nice numbers to look at. I like my way better. I have seen way too many blackjack banks tap out while anticipating a reversal of "a perfectly normal negative swing." Including some being "advised" by experts who supposedly know so much about blackjack they squeak when they walk.

[Greyfox]

Originally Posted by traynor

Perhaps. My comfort zone is having all the marbles. Things change. Today's cash cow is tomorrow's drain on assets and resources. It seems reasonable to me to apply available leverage strongly, rather than tiptoeing timidly around the edges because it is more comfortable. I will have time to be comfortable when I have all the marbles..

I like your thinking on that , on what I've bolded.

Go for it. But in doing so "don't lose all of your marbles."

My post was simply related to your comment that if you have a 10% advantage, one would truly go for the Costa del Sol.
In my instance, no.
There are more things to life, for me.

[traynor]

Originally Posted by Greyfox

I like your thinking on that , on what I've bolded.

Go for it. But in doing so "don't lose all of your marbles."

My post was simply related to your comment that if you have a 10% advantage, one would truly go for the Costa del Sol.
In my instance, no.
There are more things to life, for me.

The Costa del Sol was used for illustrative purposes only. If I had the option of luxuriating somewhere for a year or so, I would most likely spend it in a very plain dojo that no one has ever heard of, way off the beaten track, on Okinawa. I get very little from luxury resorts, and even less from popular vacation destinations. Like Thoreau wrote:
"If a man does not keep pace with his companions, perhaps it is because he hears the beat of a different drummer."

[Greyfox]

Originally Posted by traynor

Like Thoreau wrote:
"If a man does not keep pace with his companions, perhaps it is because he hears the beat of a different drummer."

Yes. Thoreau also penned:

“The price of anything is the amount of life you exchange for it.”

There is more to life than handicapping horse racing.