Thursday, December 6, 2007

Parham. Part Deux

John Pricci added his take "It's Investing, Not Betting" on the Dana Parham comments at the Arizona conference. A good read.

Mr. Pricci has been a long-time horseplayer, and relays some well known facts to those of us who play, but facts that seem to escape many.

Picking a winner and making the right bet are different animals. Much attention has been given to how to pick winners through scores of handicapping books and/or seminars. One could find a couple of handicapping seminars every racing day at Saratoga Race Course alone.

But no one ever bothers to explain that the odds players see posted on the tote board represents a financial market. As I’ve personally explained about a million times to anyone who would listen, there are prices at which each horse should be either bought or sold; bet on or passed over.

He is absolutely right of course. We have never sold the pari-mutuel market as just that, a market. If you tell a stock picker in Toledo that stock A has a 25% chance of going up, a 25% chance of going down, and a 50% chance of staying at the same price, he knows he should not buy that stock. Tell him he should play a horse who has a 50% chance of winning at 8-5 and frankly, he will look at you like you have six heads. We have not done enough to capture stock traders and stock players in racing.

Further in his article, which echoes some of the sentiments below:

If the industry leaves their annual meeting having learned the “betting market” principle and defines it as such; embraces the adoption of “betting exchanges” like those in Europe--a true marketplace concept--then markets both models to a young audience that enjoys solving problems, or follows Wall Street, it will be the most successful conference ever.
In this weeks Wire to Wire column, Andrew Cohen has jumped aboard the Parham train, as well, with some of his thoughts. If you have not bookmarked Cohen's weekly column, I respectfully suggest you do. It is a good read.

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