Sounds like an interesting book

[andicap]

For those of you interested in how much randomness there is in handicapping. This might explain why so much of our research is for naught. Or why trainer patterns fluctuate so much.

http://www.amazon.com/exec/obidos/AS...698357-9947226

[Dick Schmidt]

Indeed it does. I just ordered it from Amazon. Thanks for the tip.

Dick

[Dick Schmidt]

Andy,

Was just pointed to this article on Taub, who wrote this book.

http://www.gladwell.com/2002/2002_04_29_a_blowingup.htm

Interesting guy indeed.

Dick

[Triple Trio]

Thanks for the interesting link, Dick.

The black swan reminds of what happened to the bookies in England on September 28, 1996. On that day at Ascot, jockey Frankie Dettori swept the card and won all seven races. After Dettori's first few wins, money poured in for his remaining rides, to the extent that even longshots were bet down to short odds. The bookies who had not seen a black swan before thought Christmas had come early and happily accepted all the bets. And some of them went broke as a result. Even with hindsight, some bookies were still unrepentant and said under normal circumstances those bets would have been hugely profitable and it was just their misfortune that Dettori won all seven races that day. Clearly someone should send them a picture of a black swan.

[andicap]

Originally posted by Dick Schmidt
Andy,

Was just pointed to this article on Taub, who wrote this book.

http://www.gladwell.com/2002/2002_04_29_a_blowingup.htm

Interesting guy indeed.

Dick

Thanks..I should really open up those New Yorkers I get every week

[Derek2U]

heheh yeah chance events .... guys i read that taleb book &
then what ... i work in a wall st company that has more PH.D.s
in physics .. math .. economics etc etc than most universities.
there a departments (yeah real whole departments) that only
work on regression/AI/fuzzy logic/neural networking ... hehe ...
as an aside did you know that, according to them, most software
programs have huge math mistakes in all the above, so much so
that they joke that hundreds have gotten their PhD thinking
they had positive results when all they got was a bad math program ... hehe ... at any rate, maybe it will surprise you that
with few exceptions, all the bugs on all these math techniques
have been worked out AFTER SPENDING MILLIONS $$$ ... and
this is particularly true of fuzzy & neural networking .... now
chance events like 9/11 ... sudden & catastrophic do happen....
but then things most likely settle in like before, so to speak.
Oh lastly, for all you who sweat over issues like "sample size"
you should take heart that these brains have sorted that problem
out a long, long time ago...

[anotherdave]

I've got the Niederhoffer book mentioned in the article. Enjoyable read. He says that he makes all of the new brokers read Robert Bacon's "Secrets of Professional Turf Betting" when they start out!

AD

[bedford35]

I read this book a few weeks ago and loved it. Unfortunately I don't think it has too much relevance for racing other than making you think which is always a plus. The book is primarily related to the financial markets and the main thesis is that results can be extremely misleading due to randomness. Although this can apply to bettors, at a certain point, with enough actual races of betting data, meaningful conclusions can be drawn. Horserace betting doesn't quite have the "rising tide carries all boats" syndrome like the financial markets. Nevertheless I would highly recommend this book. It is quite unlike any other I have read. The authors style can grate on many people and he can definitely be called arrogant. Yet I enjoyed it immensely, primarily because of his intelligence and the fact of its uniqueness. I enjoyed it more because of his "attitude". The author has a website and if you type in the author's name "nassim taleb" in a Google search it will come right up. He has many papers and articles online and most of it very interesting. He is a big fan of literature and has lists of favorite and most overrated books in his not so humble opinion. Actually for the last two years, before his book was recently published, the whole manuscript was online in its various versions. I actually have a printout of an earlier version that I thought was better than the published one. More personal stories and quirks that were edited out that they should have kept in in my opinion. Anyway I think many of the members here will really like such a thoughtful book as this.

bedford35

[alyingthief]

i read the niederhoffer book years ago, and i was struck by his candor. he says he made his money from managing money, NOT from successful investing. he relates Soro's complaint against him ("you've lost me more money than any other money manager i use") as a point of pride.

it would seem mr. n. is a sigma event all to himself: he has the connections and the gall to do himself, if not his clients, well.

[Lefty]

Derek, I wouldn't call 9/11 a chance event by any stretch but I get your drift.

[wes]

Has anyone read Calculated Bets
by Steven S. Skiena ?

wes

[gumbo]

Hey Derek,

I am one of those PHDs to which you refer (Physics, Ga. Tech, 1986). The concept that a someone would make false interpretations/conclusions due to a "bad math program" is the most absurd thing that I have ever heard of. All calculations that are included in your research must be verified - either by so-called "hand calculations" or by another program (maybe we have a "bad math program" conspiracy??).

I suspect that the so-called "bugs" that you claim have been worked out (e.g. fuzzy logic and neural networking) are not bugs at all; rather they are the natural progression of research that is still in its infancy - there will be more "bugs".

And lastly, "sample size" is extremely important - the "brains" have sorted out the statistical reality of the concept; I'll give you a hint - in most cases, it is dependant on statistical variance. It is that variance that makes our game exiting (to get back to horse racing for a minute). It is that variance that we discuss every day - we call it handicapping. I can generate a perfect statistical model for success if you can define the variability associated with handicapping. That is the beauty of this game. Enough math to appeal to many of us (GameTheory comes to mind) - enough variance to confound all of us.

gumbo