Insurance?

[Light]

Originally Posted by Jeff P

Are you keeping records?
.

If you're asking me, no, not on the bomb running second. Because I don't need to. The reason is the exacta payoffs are so healthy,it's a no brainer that it is a positive ROI with the small investments I make for them to run second.

As Maximillion pointed out, I am talking about bombs (12-1 and up). I am not talking about covering a 3-1 shot or something like that. Also contrary to what acorn54 said, my bombs have a much higher winning percentage compared to your run of the mill bombs who have a much lower win percentage. Of course finding these gem plays is pretty limited.

Jeff P. I don't use your software, but I think you have some sort of "modeling" in your software where you might be able to find a subset of factors for high priced horses that will win or place at a higher percentage than the norm for this group. From here you can then tell that betting $10 to win and a $1 exacta back wheel to 5 or 6 horses of your choosing should produce a positive ROI in both the win and "hedge" categories.

[Robert Fischer]

I would rarely hedge against a win bet.

If you want to box him with the favorites in an exacta or trifecta, that makes some sense, because that exacta or tri could actually be a parallel profitable play given the large exacta probables(depending on field size/pool distribution), the high% of probability and how much you love your win-longshot to run well.

In general, single race wagers are done for a reason and although the "hedge"(parallel play) may be a profitable play in isolation, when following a single race wager it will have to be in line with that wager and often takes a hit in value below the playable level.

You can also bet a 2nd horse to win, which in effect buys some hit% for a decreased value.

I was more thinking along the lines of sitting on an unusually large willpay for a multi-race wager.

[Jeff P]

Originally Posted by Light

If you're asking me, no, not on the bomb running second. Because I don't need to. The reason is the exacta payoffs are so healthy,it's a no brainer that it is a positive ROI with the small investments I make for them to run second.

As Maximillion pointed out, I am talking about bombs (12-1 and up). I am not talking about covering a 3-1 shot or something like that. Also contrary to what acorn54 said, my bombs have a much higher winning percentage compared to your run of the mill bombs who have a much lower win percentage. Of course finding these gem plays is pretty limited.

Jeff P. I don't use your software, but I think you have some sort of "modeling" in your software where you might be able to find a subset of factors for high priced horses that will win or place at a higher percentage than the norm for this group. From here you can then tell that betting $10 to win and a $1 exacta back wheel to 5 or 6 horses of your choosing should produce a positive ROI in both the win and "hedge" categories.

Models/UDMs along the lines of what you are describing are easy enough for me to develop and test. Over the years I've analyzed literally hundreds of them.

These results are for horses selected by one of my active UDMs - but only those horses that went to post at odds of 12-1 and higher:

Data Summary         Win     Place      Show
Mutuel Totals    1831.20   1398.10   1205.60
Bet             -1264.00  -1264.00  -1264.00
Gain              567.20    134.10    -58.40

Wins                  47        99       158
Plays                632       632       632
PCT                .0744     .1566     .2500

ROI               1.4487    1.1061    0.9538
Avg Mut            38.96     14.12      7.63

The place column IS profitable.

But also note that total money returned in the win column is greater than total money returned in the place column. Total money returned in the place column is greater than total money returned in the show column.

This same phenomenon holds true in the exacta pool as well. Playing the model's 12-1 and higher selections OVER other horses in the race produces profits greater than what can be had by playing the model's selections UNDER other horses in the race.

Here is what the exacta matrix looks like for the same data sample:

Exacta Matrix UPR Rank = 1

Description       Hits    Plays     Pct     Mutuel         Bet        Gain     Roi
----------------------------------------------------------------------------------
UPR1/UPR2       000010   000632  0.0158  002190.20  -001264.00   000926.20  1.7328
UPR1/UPR3       000009   000632  0.0142  002185.70  -001264.00   000921.70  1.7292
UPR1/UPR4       000003   000632  0.0047  000503.60  -001264.00  -000760.40  0.3984
UPR1/UPR5       000006   000632  0.0095  001118.80  -001264.00  -000145.20  0.8851
UPR1/UPR6       000010   000629  0.0159  002097.00  -001258.00   000839.00  1.6669
UPR1/UPR7       000002   000604  0.0033  000650.60  -001208.00  -000557.40  0.5386
UPR1/UPR8       000004   000503  0.0080  001909.30  -001006.00   000903.30  1.8979
----------------------------------------------------------------------------------
UPR1/X          000044   004264  0.0103  010655.20  -008528.00   002127.20  1.2494


Description       Hits    Plays     Pct     Mutuel         Bet        Gain     Roi
----------------------------------------------------------------------------------
UPR2/UPR1       000013   000632  0.0206  000970.90  -001264.00  -000293.10  0.7681
UPR3/UPR1       000010   000632  0.0158  001287.90  -001264.00   000023.90  1.0189
UPR4/UPR1       000006   000632  0.0095  000970.90  -001264.00  -000293.10  0.7681
UPR5/UPR1       000006   000632  0.0095  000953.80  -001264.00  -000310.20  0.7546
UPR6/UPR1       000006   000629  0.0095  000845.40  -001258.00  -000412.60  0.6720
UPR7/UPR1       000005   000604  0.0083  000281.40  -001208.00  -000926.60  0.2329
UPR8/UPR1       000004   000503  0.0080  001742.40  -001006.00   000736.40  1.7320
----------------------------------------------------------------------------------
X/UPR1          000050   004264  0.0117  007052.70  -008528.00  -001475.30  0.8270

In the exacta pool, playing horses selected by the model (it's always the top UPR horse because of the way the model is constructed) OVER the 2nd through 8th ranked UPR horses in each race outperforms playing horses selected by the model UNDER the 2nd through 8th ranked UPR horses in each race. This effect isn't limited to just this model. It is true for nearly all of the longshot models that I have tested.



Ok, Q&A Time...

Q. Given the above, what wagering strategy generates the greatest profit for the player over a significant time horizon?

A. Two units to win?

B. One unit win and one unit place?

C. Two units place?

Unless unit size is so large that betting 2 units to win negatively impacts the win pool, the correct answer is A.

Put another way: If I have 2 units to bet and I opt for strategy B (which involves hedging) as opposed to strategy A... Choosing strategy B over strategy A every time a playable race comes up causes me to earn less money over a sizable series of races than I otherwise could have.

In business this is sometimes referred to as an opportunity cost.

There's also something called the law of large numbers and I think it applies here. The longer the series of races that a player insists on using strategies B and C instead of using strategy A: The more likely it becomes that avoiding strategy A will end up costing the player money.

Light, I'm not saying that hedge betting is wrong. However, I am saying that hedge betting is not for me.

There IS one valid reason (mathematically) I can think of where hedge betting makes sense. I'll try to come back and post it later if no one else does.


-jp

.

[Kevroc]

Originally Posted by castaway01

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.

I understand AND agree with you.

It's just that when you look at your p4 tickets.. if you looked at the cost of adding that long horse in there... for example take a caveman ticket 5 x 3 x 3 x 3 with a 19:1 and 14:1 shot being two of the first leg runners.. those additions are raising the cost of the ticket from $81 to $135. An increase of over 50%. Surely, they are worth something in the win pool. Even a small amount would lessen your "need" to devise a hedge plan for sanity reasons. If you liked the price horses enough to add to a sequence, they should be worth some type of wager in the win pool (especially at those inflated odds)

I also agree with what Robert said above. There are ways to structure your play where hedging is part of the plan. I do it all the time. I am not against hedging at all. I merely tried to illustrate that hedging the last leg out of fear (making negative expectation bets) can hurt you long term.

My main point was that some players approach the races not properly rolled, and they dip into these pools and these pools only. That could lead to some scared play and not very well-thought out last minute hedges.

Over the course of time, this is a leak.

[phattty]

hedging your long payout for multis ending with a bomb?

IMO you played the bomb because you didn't like the lower price beasts,

so... my hedge here is too scatter a few longer priced horses over my bomb as i already expect a surprise winner in the race...not much $$$ required to make the place finish of your Bomb quite rewarding

expected chaos generally leaves anything under 10-1 trailing home

[Light]

Originally Posted by Jeff P

Light, I'm not saying that hedge betting is wrong. However, I am saying that hedge betting is not for me.

I don't think we are that far apart.

You do acknowledge that there is a subset of high priced horses that are profitable.That is the main hurdle to seeing my point.

There may be a misunderstanding of what I am saying/doing about playing the bomb 2nd. To clarify. If I play $10 to win and $6 with the bomb 2nd in an exacta, I am NOT removing those $6 from the win bet. I would simply not bet them.

What I am saying is there is an exacta place resource that is going untapped. By using the bomb second, I am maximizing profits instead of the misconception that I am diluting profits.

It's like you find a small oil well. Then you notice this oil well feeds another, smaller oil well. Both are profitable. To say that I will only stick with the bigger oil well because the other oil well may dilute my profits is absurd. Why not take advantage of the 2nd oil well too.Why leave an additional resource untapped.

[pondman]

Play it as it is. Unless you can get your win percent higher.

[Jeff P]

Originally Posted by Light

I don't think we are that far apart...

There may be a misunderstanding of what I am saying/doing about playing the bomb 2nd. To clarify. If I play $10 to win and $6 with the bomb 2nd in an exacta, I am NOT removing those $6 from the win bet. I would simply not bet them.

What I am saying is there is an exacta place resource that is going untapped. By using the bomb second, I am maximizing profits instead of the misconception that I am diluting profits.

No. We're not that far apart.

What I'm saying is this:

If I have $16 to bet on a live longshot in a given race, a review of my own wager history tells me the following:

I am better off (in the long run) betting the entire $16 on the horse to win the race outright (vs. betting $10 on the horse to win the race and using the remaining $6 to make a hedge/insurance bet.)

Hey, to each his own!


-jp

.

[pondman]

An exacta:

(Win % 1st * Win % 2nd)/ time

It's not your ROi that's important. It's having a hit ratea high enough. Some people single. Some people use combinations .

If you catch the first leg at 40% and the second leg at 40%, then you'll win 16% of your exacta. You have to do the math, and see if you are on par. Some enjoy it, others don't it and don't play it. I don't think you have enough of a margin on the 1st leg.

[Robert Fischer]

Originally Posted by phattty

hedging your long payout for multis ending with a bomb?

IMO you played the bomb because you didn't like the lower price beasts,

so... my hedge here is too scatter a few longer priced horses over my bomb as i already expect a surprise winner in the race...not much $$$ required to make the place finish of your Bomb quite rewarding

expected chaos generally leaves anything under 10-1 trailing home

This is why it can be favorable to either use a couple lower priced horses in the final leg with the bomb, or try to find a sequence where that bomb is not the final leg. Can't always be done, and even when it can - you still may want to play that leg in the rolling or overlapping sequences.

[Light]

Originally Posted by Jeff P

I am better off (in the long run) betting the entire $16 on the horse to win the race outright (vs. betting $10 on the horse to win the race and using the remaining $6 to make a hedge/insurance bet.)

If you can live with that low hit rate,go for it. I need multiple sources of income at a greater hit rate for sanity. At a low hit rate, the rate of run outs is longer and the psychological drought will do you in resulting in abandoning the process.That's why I do not bet the entire $16 on one thing. I diversify my portfolio like a mutual fund.

[Robert Fischer]

Originally Posted by Light

If you can live with that low hit rate,go for it. I need multiple sources of income at a greater hit rate for sanity. At a low hit rate, the rate of run outs is longer and the psychological drought will do you in resulting in abandoning the process.That's why I do not bet the entire $16 on one thing. I diversify my portfolio like a mutual fund.

racetrack is a terrible place to buy insurance

[Light]

It's not insurance.

[Maximillion]

Originally Posted by Jeff P

Models/UDMs along the lines of what you are describing are easy enough for me to develop and test. Over the years I've analyzed literally hundreds of them.

These results are for horses selected by one of my active UDMs - but only those horses that went to post at odds of 12-1 and higher:

Data Summary         Win     Place      Show
Mutuel Totals    1831.20   1398.10   1205.60
Bet             -1264.00  -1264.00  -1264.00
Gain              567.20    134.10    -58.40
 
Wins                  47        99       158
Plays                632       632       632
PCT                .0744     .1566     .2500
 
ROI               1.4487    1.1061    0.9538
Avg Mut            38.96     14.12      7.63

The place column IS profitable.


There IS one valid reason (mathematically) I can think of where hedge betting makes sense. I'll try to come back and post it later if no one else does.


-jp

.

This is eye opening stuff....

In your sample the win roi is over 30% vs. place, despite double the hit rate.....

I only bet to place on a "bomb" when I feel the race is up for grabs,and cant get a handle on the other contenders....I usually opt for a few exacta boxes as a way of trying to take more out of a race.

Of course everyones records are different, but maybe I ought to re-think that approach.

Would love to hear the situation wher hedge betting makes sense?

cheers

[rubicon55]

Originally Posted by Maximillion

This is eye opening stuff....

In your sample the win roi is over 30% vs. place, despite double the hit rate.....

I only bet to place on a "bomb" when I feel the race is up for grabs,and cant get a handle on the other contenders....I usually opt for a few exacta boxes as a way of trying to take more out of a race.

Of course everyones records are different, but maybe I ought to re-think that approach.

Would love to hear the situation wher hedge betting makes sense?

cheers

Jeff's, stats verifies everything I have read on place betting longshots, statiscally over the long haul it is a losing proposition - it is better to go for the win. I have faulted on my self doing the same thing. I think it is fear driven and not fact driven based on my personal expierence IMO. I think the only place that may vaugely or possibly warrant hedging is a place bet is possibly on a bridgejumper that you think might fail. Robert Goren may know more about the exact stats about bridgejumpers that he has noticed.