Handicapping Tip of the Day #54 – Risk Evaluation in Horse Racing

By Art Parker for agameofskill.com

In the financial world the “risk-return tradeoff” states that the potential return rises with an increase in risk. Individuals associate low levels of uncertainty with low potential returns, and high levels of uncertainty or risk with high potential returns. According to the risk-return tradeoff, invested money can render higher profits only if the investor will accept a higher possibility of losses.

What exactly is risk? Risk is the likelihood of an adverse event occurring within an identifiable sector, such as the private sector or government sector. Those who are risk analysts often work with forecasting professionals to minimize future negative unforeseen effects.

Profit Risk Evaluation in Horse RacingLet’s look at what happens when you go to the bank for a loan. The bank asks you to complete the application first. Why? This is the primary method by which the bank can analyze you as a risk. If the application looks good the bank orders a credit report, which is a critical way to evaluate you as a risk. If the bank then lends you the money it will tell you the terms, which is primarily the interest rate and other things. If your interest rate is lower than most, it is because you are a good risk.  If it is higher, then you are riskier to do business with. All of this is done so that the lender can expect a certain return with all risks balanced.

As far as horse racing goes, it would be unwise to select a horse in an upcoming race, regardless of the odds, without considering the risks, or what could happen to prevent the horse from entering the “Winner’s Circle.” Once the risks are analyzed it should be easier to grasp what the return should be.

How many times have we seen the lone speed horse miss the start, get squeezed or have early traffic trouble? If that lone speed horse can’t get the lead and no matter what the odds, all is lost. How many times have we seen the closer from hell become a victim of a slow pace or have traffic trouble and just can’t catch the speed?

It reminds me of a friend of mine, a very good player who loved to analyze pace. If he determined a horse was the lone speed in the race he would then look at those in the adjacent post positions. If those runners next to the lone speed have gate problems then the probability of the lone speed could be compromised. That’s very good risk analysis in our game.

In a recent piece I talked about finding the bargain horse, an effort that requires risk analysis in the overall race evaluation. A horse may be a bargain at 7-1, but if the amount of risk is excessive then 7-1 may not be enough.

Handicapping Tip of the Day # 53 – Try to love them before you bet them

By ART PARKER

It really makes no difference what handicapping method(s) you use to provide answers for who you wager on in horse racing. What’s important is how you use the answers you come up with. If you use a system and your system says bet number five (#5) then it is unwise to go and make the bet without examining the value of your wager.

I had a friend that utilized some sort of pace formula that, by his own admission, won about 30% of the time. I would shake my head at him when he whooped it up when his system horse would win at odds on. I could not get him to understand that you will lose money (even with a nice 30% strike rate) if winning wagers don’t return enough money.

John Templeton, the legendary mutual-fund manager who was a pioneer of international investing and later committed much of his fortune to scientific and religious causes, was known as the “Owl of Wall Street.” He earned a reputation for bargain-minded stock selection that consistently rewarded shareholders in his Templeton Funds family. Templeton’s number one rule was to look for and buy bargains. Learn from your mistakes was another one of his top rules.

If you have ever been to a brokerage firm you have probably seen the board flashing symbols and numbers across. As a stock is traded its most recent price is given. This is really no different than going to the track since the tote board gives you the information to determine what a horse is going for in terms of odds. If you put Templeton’s practice into horse playing the number one rule would be to bet on horses that are better than their odds; in other words look for a bargain.

Some of the best advice I ever received came years ago from one of the best horseplayers I ever knew. He had a great way to explain bargains at the track.  He once said, “If I think a horse should be 2-1 and he is on the board at 5-1, I really like him. If he goes up to 8-1 I really love him.”

How to Find Value: 4 Angles for Horseplayers

by Glen S.  for AGameofSkill.com

Sharp horse players are always looking for value.   Are you? It is tough enough to make money at the races, so betting underlays means you need to pick even more winners. The easiest way to find value is when the wagering consensus on the race, in your perspective, is incorrect.

I find the best way to find value is by uncovering overbet, vulnerable favorites.

Here are a few horse racing angles I always like to watch for to bet against:

-Maidens that finished 2nd and are now dropping a level.

Why would you drop a horse to a lower level when you just beat everyone at a higher level. The only way I may consider betting this horse is if the higher level was really slow time and the trainer knows that he needs to drop

– 28 days of no activity.

When a horse has not raced or worked out in over 28 days, I find this is a bad sign. Why wouldn’t you at least work your horse out if you can’t find a race for him to enter?  At “A” tracks this is a very strong angle, “B and C” tracks the top trainers still get away with it and may even hide a few works from time to time. I still would not make a strong bet on them.

-Dropping a horse after a good performance.

Why drop when the horse is competitive at a higher level while posting strong numbers? Sure the top trainers will run the horse down the others’ throat and you need to be aware of that. The poor trainers are poor oftentimes because they don’t have the stock to win. However, if a drop down off a good performance is trained by a weak (low %) trainer, then the class drop surely means a sore animals.  Small barns don’t have the luxury of “playing poker” like the big outfits, e.g. David Jacobson.

-First time front bandages.

This is strong when a horse was running well and is dropping. Also a horse that has had a good career and not worn them before, especially when the horse will be the favorite.

When these “bet against” angles occur, really take the time to find something to take a shot on. You will get your value. Maybe you will not win, but will feel much better knowing by picking a winner you will be rewarded. A few ways to play the race would be box a few horses in an exacta or take a bunch in a rolling pick three.   Consider even a bet in the win, place or show pool on your choice of the race.

Go find your value, it’s out there.

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