Handicapping: You Always Need Value

We often hear the term “value handicapping”. It is generally defined as getting value for your money, or making a bet with a return higher than risk. I don’t really like the term because if you are not getting a higher return than what the board odds are, you should never make a bet.

When I was a grade-school kid, back in the 1970’s, a fellow student came up to me before the Super Bowl between the Dallas Cowboys and Pittsburgh Steelers. He was going on about how good the Cowboys were and how bad the Steelers were. He was a huge Roger Staubach fan. I hated the Steelers with a passion, but I had heard from my cousin that they were 4 and a half point favourites, so I knew they were probably the better team. He asked me, and others to bet the game. I did not really have any money to be betting, but when he wanted to bet just to win (no one really heard of a point spread at that time, certainly not in grade 5), I began to think I better make this bet. I was getting the Steelers straight up at even money and they were 4.5 point favourites?! I can’t remember what the bet was, or how I got the money to put up, but I said yes. I was getting value.

You should not care what the circumstances of any bet are; you should only consider yourselves with getting value. If you do not like the driver that is on the horse it matters not, as long as the horse is higher odds than his chances of winning. Mike Saftic or Phil Hudon win races. If you don’t like the horses gait it does not matter either. Many foul gaited trotters win at 20-1 with a 10% chance of winning. If you have any bias against a horse, maybe because you bet on it three starts ago and he stunk, it does not matter. You have to be dispassionate and learn that when you get value, you bet. When you are not getting value you sit on your hands.

Vegas Handicapper “Fezzik” who has his own radio show, recently showed just how value is determined. He began with the supposition that the lines for NFL games were correct. He is probably right since year after year the faves and dogs win a similar number of games. What he did was start a mutual fund type index where he line shopped and when he got better than Vegas odds on something, it was a bet. It didn’t matter what the team was, or the game. If the Patriots were favoured by 14 over the Jets, and he saw some other book offering New England minus 13, he made that a bet. Over time this index grew, at a very good rate. It was his definition of value.

In the next post we will look at how to judge value in horse betting, from then we will look at pulling the trigger on angles based on value. I think it is a good exercise and it might spur some interesting discussion. I'm working through this on a few things now, so it will hopefully help me, as well.

Note: Have you ever seen what $411,000 looks like? Well, someone was alive onto the 11 horse at Santa Anita today for a $411K pick 6. So, if you click here, you will see what $411K does not look like (the inside horse is the 11). Tough luck for some solitary soul. The pick 6 pool should reach around $2M tomorrow at Santa Anita if anyone is interested.