Insurance?

[Aner]

I have a spot play that returns 15+% if I restrict bets to horses going off at 8:1 or better. So where's the money? I finally realized I'm paying far too much for insurance. Say my horse goes off at 15:1. Obviously others in the race have a good chance to beat him. Sometimes I play an exacta with a couple of the favored ones on top of my long shot, or there is a 5:1 shot whose looks real good. Another $2 there. It finally dawned on me that I frequently have 20% to 50% of my money betting the long shot will not win. There goes any edge.

Is insurance ever warranted? If so, can the amount of insurance be estimated based on the win bet?

[classhandicapper]

Years ago I used to make the same mistake. I'd often play a bunch of savers over my key horse that cost me money over the long haul. Some combinations probably even had a negative expectation over the long haul. It took me awhile to realize the error of my ways.

There's nothing intrinsically wrong with playing a horse you like underneath a few others. You just want to make sure you aren't using the horse under clear cut underlays. Those are the combinations that destroy value.

As far as playing 2 horses in the same race goes, I think it's OK as long as they are both overlays. The problem here is bet size.

Do you bet your usual unit on each horse?

That has the effect of doubling your usual bet size on one race which could make you uncomfortable or be risking too much on one opinion.

Do you split your usual bet in half and bet the same amount on each?

That feels more comfortable, but you'll find that you cash a lot of those races and have only half as much on the winning horse as you usually bet. That has the potential to screw up your results. For instance, if you happen to do especially well in those races but not so good in others, you might have flat bet profits for the year but a net loss in actual money.

You could also split it other ways like trying to win the same amount no matter which horse wins etc..

Personally, after all these year I am still struggling with that scenario.

[cj]

The only time I can see using insurance is if you just can't handle not cashing tickets on an emotional level. If that is the case, you probably aren't cut out for serious gambling any way.

[Turkoman]

Originally Posted by Aner

I have a spot play that returns 15+% if I restrict bets to horses going off at 8:1 or better. So where's the money? I finally realized I'm paying far too much for insurance. Say my horse goes off at 15:1. Obviously others in the race have a good chance to beat him. Sometimes I play an exacta with a couple of the favored ones on top of my long shot, or there is a 5:1 shot whose looks real good. Another $2 there. It finally dawned on me that I frequently have 20% to 50% of my money betting the long shot will not win. There goes any edge.

Is insurance ever warranted? If so, can the amount of insurance be estimated based on the win bet?

Aner:

I'm just curious to know how many of those spot plays your method produces on a monthly basis, approximately. Is it possible to say? Thanks in advance.

Turkoman

[classhandicapper]

Originally Posted by cj

The only time I can see using insurance is if you just can't handle not cashing tickets on an emotional level. If that is the case, you probably aren't cut out for serious gambling any way.

If the saver wager is still a good value, you can argue for it as a risk management technique.

Suppose you had a 20-1 shot with an expected ROI of 1.30, but there were a few exacta combinations you could play with him second that were worth 1.15.

You'd win more money over the long haul just betting it all to win, but those exacta combinations are still profitable plays. Maybe you'd feel more comfortable mentally not blowing the bet totally in case he gets nipped at the wire for 1st and you could also bet a larger percentage of your bankroll on the race because you have a better chance of cashing something.

It's when you put a favorite that you don't even like much over that long shot and the expected ROI drops to .90 (or whatever) on that combination that you are really screwing yourself

[thaskalos]

If what you mean by "insurance" is the act of sacrificing a minor bet (or bets) for the sake of protecting a larger bet, or a large potential payoff...then I would have to say that it's a bad idea.

I have seen people, who are "live" going into the last leg of a pick-4, practically falling all over themselves trying to hedge their existing bets, in the face of what they consider "hot play" on the board on some other horse(s). Somehow, the idea seldom works out...

That said...I often will structure my superfecta tickets in such a way as to receive some kind of payoff, even if I am somewhat wrong about the race's outcome.

But this happens only under certain circumstances, and it's part of an overall, predetermined betting strategy...not a last-ditch effort motivated by fear.

[Aner]

Originally Posted by Turkoman

Aner:

I'm just curious to know how many of those spot plays your method produces on a monthly basis, approximately. Is it possible to say? Thanks in advance.

Turkoman

One year there were 1787 plays. I estimate this was from about 500 race cards.

[Turkoman]

Originally Posted by Aner

One year there were 1787 plays. I estimate this was from about 500 race cards.

Wow, not bad. That's almost 5 plays per day! With such an abundance of solid plays and a 15% profit, I'd say it's safe to say that no "insurance" is necessary. Just my opinion. Thanks for the answer.

Turkoman

[Light]

Aner

I can't stress enough the monumental impact that a bomb running second will have on your ROI's health and your mental state when you do or don't cover him to run second.

"Insurance" is very important for the health of your ROI when you have a "bomb" as you alluded to. Doing the following procedure with a low priced horse will probably hurt your ROI as previously explained.

I hedge all the time (when I have a bomb). What that does is increases my ROI and hit rate significantly. Let's take the 20-1 shot I had in a 6 horse field recently. Put $10 to win. Going to get back $210 if he wins. Back wheeling him in the exacta cost me $5. He ran 2nd behind a 6-1 speed ball. $1 exacta came back $91.

You tell me. Do you want a profit of ($91-$15 win+cover bet) = $76. Or do you want a $10 loss (straight win bet)? Do the ROI math.

Or say my horse won. I would have gotten back $210 - $15 instead of -$10. Like that $5 difference is really going to be a huge impact on my ROI. There are other ways you could lose that $5 insurance. For example:

The bomb horse could have easily taken a hit in odds by the time the race went off. That would've cost me way more than the $5 insurance. Or, I could have randomly put $15 to win on him instead of $10 and lost. There goes your " cheap insurance" money. Big deal.

The point is the "insurance" bet is almost insignificant in amount but makes a significant impact towards a positive ROI and mental health, when you are dealing with a bomb.

[Aner]

Originally Posted by Turkoman

Wow, not bad. That's almost 5 plays per day! With such an abundance of solid plays and a 15% profit, I'd say it's safe to say that no "insurance" is necessary. Just my opinion. Thanks for the answer.

Turkoman

It seems there is a fly for every ointment, and the fly here is low hit rate that hovers around 5%. Sure it gets a lot of the horses paying $50+, but even at 5 bets a day you can strike out for days in a row. I simply don't have the patience to wait for these plays to hit.

Don't think Dave will mind if I quote a statistic from " Percentages and Probabilities, 2012". Based on over 200,000 sprint claiming races, if one bet to win every horse with odds 16 and higher, he would hit only 6.6% of the races resulting in about a 40% loss of purse. Obviously, my picks do not include most of the horses at these high odds.

I think fishing in "super high odds" waters might be a place where profits can still be had. Whales cannot fish here because large bets would devastate the odds. Most handicappers dislike the long run-outs so much they don't cast their nets here. Wish I had the patience to bet these picks only.

[Turkoman]

Originally Posted by Aner

It seems there is a fly for every ointment, and the fly here is low hit rate that hovers around 5%. Sure it gets a lot of the horses paying $50+, but even at 5 bets a day you can strike out for days in a row. I simply don't have the patience to wait for these plays to hit.

Don't think Dave will mind if I quote a statistic from " Percentages and Probabilities, 2012". Based on over 200,000 sprint claiming races, if one bet to win every horse with odds 16 and higher, he would hit only 6.6% of the races resulting in about a 40% loss of purse. Obviously, my picks do not include most of the horses at these high odds.

I think fishing in "super high odds" waters might be a place where profits can still be had. Whales cannot fish here because large bets would devastate the odds. Most handicappers dislike the long run-outs so much they don't cast their nets here. Wish I had the patience to bet these picks only.

Aner, patience is extremely important. I have one that produces about one a day, but I don't mind. I prefer very few winning ones, rather than play too many and end up like 98% do.

[Kevroc]

Originally Posted by thaskalos

I have seen people, who are "live" going into the last leg of a pick-4, practically falling all over themselves trying to hedge their existing bets, in the face of what they consider "hot play" on the board on some other horse(s). Somehow, the idea seldom works out...

This is sooo true and it is near impossible to not give in to the temptation to bet against yourself when staring at a board full of will pays that look nice... save for a few lowish numbers that "scare" you.

I mean.. if you are sitting on some astronomical payoffs compared to your investment.. there are some obvious "sanity" hedges that are no-brainers. I mean.. plunking down a few measly bucks on some really long bombs may be -EV bets in a vaccuum but, when you are sitting on big money, they are easily +EV in the big picture.

It's the middling ones that are trouble. You have to ask yourself why you played the serial bet in the first place if when you get to the threshold of victory.. you bet against yourself.

Bankroll has a lot to do with it, imo. If you played more than just the pick four pool, you wouldn't be scared into making these -EV bets.

Most horizontal players do not do this.

Consider a pick four sequence that has two races in it where you don't like the favorite. You manage to beat the favorite with a $40 horse and a $30 horse. Now you are sitting on the last leg and alive to the fave and second choice. The rest of the field are bombs and you could throw a few bucks down at small risk/large reward... but, the third and fourth choices are looming.

You do not like these horses on paper but, don't want to waste the $40 and $30 winners you "had" earlier.

Well... if you bet those races individually as well, you wouldn't have this dilemma. The win money would be in your pocket and you wouldn't be frightened into making sizable win bets on horses you don't like.

Could you "lock" in a profit betting those horses? Yeah, sure but at what cost? You may win the day... but, you are theoretically throwing dollars down the drain.

[castaway01]

Originally Posted by Kevroc

This is sooo true and it is near impossible to not give in to the temptation to bet against yourself when staring at a board full of will pays that look nice... save for a few lowish numbers that "scare" you.

I mean.. if you are sitting on some astronomical payoffs compared to your investment.. there are some obvious "sanity" hedges that are no-brainers. I mean.. plunking down a few measly bucks on some really long bombs may be -EV bets in a vaccuum but, when you are sitting on big money, they are easily +EV in the big picture.

It's the middling ones that are trouble. You have to ask yourself why you played the serial bet in the first place if when you get to the threshold of victory.. you bet against yourself.

Bankroll has a lot to do with it, imo. If you played more than just the pick four pool, you wouldn't be scared into making these -EV bets.

Most horizontal players do not do this.

Consider a pick four sequence that has two races in it where you don't like the favorite. You manage to beat the favorite with a $40 horse and a $30 horse. Now you are sitting on the last leg and alive to the fave and second choice. The rest of the field are bombs and you could throw a few bucks down at small risk/large reward... but, the third and fourth choices are looming.

You do not like these horses on paper but, don't want to waste the $40 and $30 winners you "had" earlier.

Well... if you bet those races individually as well, you wouldn't have this dilemma. The win money would be in your pocket and you wouldn't be frightened into making sizable win bets on horses you don't like.

Could you "lock" in a profit betting those horses? Yeah, sure but at what cost? You may win the day... but, you are theoretically throwing dollars down the drain.

I think the problem with this scenario is that most of the time the $30 or $40 winners we have in the Pick 4 sequence aren't horses we like enough to bet individually to win. In the situation you present where you don't like the favorite in a race, maybe you bet five other horses in that race in the Pick 4 and got lucky with a $40 winner. That situation is hard to cover with win bets though, so it's tough to blame the player for ending up only being alive with the Pick 4 and feeling vulnerable in that last leg. The best way to get longshots in your Pick 3 or 4 is, understandably, beating vulnerable favorites, but it's not as easy to have a strong opinion on good-odds horses in every leg (unfortunately).

However, if you're saying your key horses (horses you are singling) are frequently winning and paying $30 or $40 in races where you're beating vulnerable favorites yet you only bet those horses in the Pick 4, then yes, that's a major error that needs to be rectified immediately. Then back up the Brink's truck for your profits.

I think sometimes insurance is necessary for psychological well-being, even if it's not the best financial move. If it keeps you from losing your focus for the next two weeks because you collected nothing when you could have won a substantial amount, then in select situations it's worth it. Overall, you have to have confidence in your picks, but there are scenarios when you can back yourself up a bit with insurance (like the Pick 4s mentioned earlier).

[thaskalos]

Originally Posted by castaway01

I think sometimes insurance is necessary for psychological well-being, even if it's not the best financial move. If it keeps you from losing your focus for the next two weeks because you collected nothing when you could have won a substantial amount, then in select situations it's worth it. Overall, you have to have confidence in your picks, but there are scenarios when you can back yourself up a bit with insurance (like the Pick 4s mentioned earlier).

I agree with you, it can be psychologically damaging, at least for a short while, to narrowly miss out on a huge super-exotics payoff.

Here is what I have experienced from my own adventures in this aspect of the game:

When you get to the last leg of the aforementioned pick-4, and you are only alive to one or two of the horses in the field...then, in most cases, you have quite a lot of ground to cover in your attempt to "secure" a profit in the race, in the event the pick-4 goes wrong.

After all...are we trying just to recoup the cost of our bet...or are we trying to make a decent profit overall?

If we make a calculated effort to secure a decent profit overall in this case...then we have to be prepared to lose BOTH the original pick-4 bet AND the supplemental "insurance" bet...and that can be even more psychologically draining.

If, on the other hand, we have half the field covered with our original pick-4 bet in the last race...then I have to say that hedging in this spot is based on unreasonable fear.

The regular pick-4 player faces this situation pretty often...and soon learns to deal with it.

The infrequent pick-4 bettor gets an education on the heartache that is the super-exotic bettor's constant companion...

[Robert Fischer]

If you are playing with cash-in-hand HEDGE.

Playing with a bankroll do not hedge unless the willpay is very large or your opinion has honestly changed in the last leg.