Beating the Game While Never Forgetting We're Betting the Underlying Equity

If you're anything like me, and if you're reading this oftentimes silly blog you probably are, you find this game incredibly fascinating. 

There's just nothing like sniffing out a winner, and there are so many ways to do it; some of which make an already confusing game ever more confusing. 

I was checking out a penny stock last week of a company I was involved with at one time, and still held shares in. 

There was a brief signal that something may be happening. I looked at the "PP's" - previous press releases - and there was nothing too exciting going on, but they did raise some money and were doing work on a project. There was enough in the buy side market depth where I decided to take a shot and sit a bid where I got filled. 

The volume continued, the stock was up about 30%, and I had to make a decision with completely imperfect information. How real was this action? Was it momentum traders trying a flip, was it something more concrete? 

Looking at the project and the work they were doing on it, it felt pretty unsexy, and to my eye, any news that could possibly move the market seemed low probability. I decided to close my trade. 

Today that looks smart. A press release was issued and it is kind of blah. The stock is down. Maybe there is something to the noisy trading, and next week it'll be roaring again, but I sold my flip trade because in my view the "horse" wasn't fast enough, and the price offered didn't match it. 

We notice this exact same thing every single day in horse racing. 

With so little public money, and so little bet early, the odds board is all over the place. Sometimes the pricing gives signal and sometimes it yields noise. It's our job to differentiate which is which.

Make no mistake - just like the trading on my penny stock told a story, so does your average odds board, from TO Elvis on Derby Day to the third at Delta Downs. Understanding how a race is bet is an edge. The people who can read it best are probably playing the game with pocket queens. 

But in the end, yes, we can let the market uncover things we can't see. It does a great job of showing us its hand, even though the sharpest money tries its best not to. And yes, we can let it guide us. But we still have to be able to spot if the market is right or wrong. 

Despite being a big believer in markets, I still live this game with a heuristic: I never forget that the horse I choose is the thing doing the running; it's the underlying equity. 

It still has to be fast enough to win, and I still have to be able to bet them at the price I want them.

Have a nice Tuesday everyone!

Harness Racing Greatness is as Clear as Glass

As we've seen this year and last with Sovereignty and Journalism in the runners - watching a couple good horses go at it is fun. We just wish they'd race more!

Over in harness racing, this year's big expectation falls to two untested three year old colts in Canadian star Beau Jangles and Indiana's World Champion Odds on Mr. Mamba. 

The hype has certainly already started. If you watch the WEG feed you'd think Beau Jangles was the second coming of Somebeachsomewhere. Over in the Hoosier state, the Beach comes in a close second in a match race (with Beau third). 

Everyone has an opinion, and I do too. Mine is: The chances of either of these horses being the great Somebeachsomewhere are between slim and none, and slim left to bet sports because of the CAW's. 

Why am I so sure? Because good horses encourage debate, while great horses end them. 

When Beau Jangles won his first real test by a half a length - the Metro - there was chatter in the handicapping sphere that if Frantic Hanover got out easily (and he reportedly bled) he would've beaten him. Not to mention, is Frantic Hanover even any better than the Ontario breds he's been beating up? Whether that's true or not is irrelevant, it was valid talk from sharps. 

When Odds on Mr. Mamba set the world record in 147.4, there was a horse near him and the talk was about other things as well. "Who is that other horse, was the track souped up, was the time real?" Is this horse that good? Again - we watched a potential freak horse horse freak - but these were questions that were completely valid. 

Meanwhile back at the 2008 ranch, it was just different. 

The Metro Stakes in '08 - the Beach's first real test - was turning to the gate and it featured horses who we didn't have to wonder if they were good or not - including several millionaires, and double world champion Shadow Play - he himself likely one of the better colts we've seen this century. 

Less than 110 seconds later there was no such talk about the big son of Mach Three. 

The talk was instead about how he made those other exceptional horses look like 3 claimers. The talk was about how fast he could possibly go. About the separation, about the rebreak, about how little was asked of him. About how much he could've won by; about what we just watched. 

There were no 'what if' questions because the true greats don't pose questions, they answer them with incalculable ease. 

Three year olds since Beach have gotten their comparisons in the media. Whether they be Rock n' Roll Heaven, or Captain Treacherous, and others. 

Often times we hear excuses for younger horses facing older - about how hard it is to transition from three to four, or how it has to be late in the year for a three year old to compete in these instances. 

While Captain Treacherous was a takeout reduction at 4-1 odds in the TVG against older foes, you can bet your bottom dollar the Beach entering the same race would've been 1 to 5, and probably an overlay. If he raced at four, we'd probably be mortgaging the house each race at 1-9. 

Age doesn't matter. Nothing really matters when you're dealing with a dominant animal with that kind of DNA. 

I'm very much looking forward to this season to watch Beau and Mamba settle this on the track. They're obviously two very good colts. Heck I'm interested to see any new shooters who wintered well join the fight, too. 

But with a full admittance I'm no PTPstradamus, I'm pretty sure that in six months, the Somebeachsomewhere comparisons will be relegated to the dust bin, just like they have every single year since that incredible animal set foot on the racetrack.

Have a nice Tuesday everyone.  

Squeezing Value From Multis - It Changes Over Time

Playing multi-race wagers is a staple in the modern betting game, and like with most things in our vocation, it evolves and changes over time. 

This type of wagering strategy started with caveman tickets where we weighted everything equally. Then after Crist's seminal book, the ABC method took hold. In the late teens of this century, the warm and cuddly one was flamed from just about everywhere and by everyone in racing for sharing his weighted, DFS-type multi-race play, which added quite a bit of game theory to the mix (a lot of which is shared in Chris's excellent book). 

One plank of multi-race betting theory - which primarily fit with harness racing, due to its 20 cent multi-leg bet minimums and short prices - was taking advantage of people who spread, because they are going too deep in each leg, because they're betting not to lose. 

Optimal play meant we'd want to hit a sequence skinny and heavy, especially if you like the chalk. You'd get your value boost from the spreaders. This worked for quite awhile. 

I think that's started to change a little bit.

Last night at Flamboro, with their 20 cent pick 5 carryover, a 2-1, 3-5, 18-1, 1-2 and 4-5 sequence paid $4,405 for $1 (the parlay was about $250). The juicer was the 18-1 horse who was like zero for 30. Zero for 30 horses aren't being keyed by sharps on $10 tickets. 

At WEG, the 20 cent pick 6 with only an $8,800 pool would've resulted on a parlay price of $135 with the big chalk in the last leg, with the bet itself paying $93. The heavy chalk lost the last race, and the payout was still only 20% above parlay because the horse that beat him was logical. 

This is not a new phenomenon (with the shorter prices at the Big A on 50 cent tickets I think we're starting to see a little of the same thing). People (teams, sharps) are getting better and better at *not* spreading 20 cent or 50 cent pools.

Despite this slight pivot, I think ITP's methods still hold. To beat this game we have to "hit them where they ain't".

In a chalky looking sequence that we like (especially with a smaller pool) for a $5 or $10 base play, we have to differentiate when it's apparent, and be willing to lose our bet to gain value. 

Free squares, again especially in a small pool, might have to be sit-outs or be faded, where again we need to be willing to lose. For years I have been fading a 1-5 or 1-9 chalk when they are in leg one, but I'm starting to look at them in later legs as well. 

Time will tell how that goes, but I think there's mounting evidence that with less and less non-sharp money in the pools spreading like peanut butter, it's starting to make a lot of sense. 

Have a great Monday everyone!