How did the cycling team win eight gold medals?
The explanation used by the cycling performance director, Dave Brailsford, was that it was achieved through the “aggregation of marginal gains”. By looking for a 1% gain at everything they do, from mechanics upwards, they pulled together a whole series of small gains that enabled their athletes to dominate their sport.

I have used the quote before in a previous blog posting when I recognised I needed to review all aspects of my betting to seek improvements and achieve consistency.

When handicapping a race, I currently utilse objective measures or benchmarks for pace and speed ratings to evaluate each horse. Some ratings I have developed myself (pace) some created by other sources. Although profitable my approach still lacks consistency and unfortunately takes time to evaluate each race.

It’s no secret that I utlise ratings from the Racing Post. Yes there are various forum’s that slag off their inaccuracies and tweaks (back fitting) to make the hot favourite top of their ratings but all in all for the price they are good value providing *cough* “consistent” ratings covering National Hunt and Flat Racing every day of the week. However you cant get around that fact that there’s always room for improvement so I have decided to take the matter into my own hands.

A rating is the evaluation or assessment of something, in terms of quality (as with a critic rating a novel), quantity (as with an athlete being rated by his or her statistics), or some combination of both.

I guess it was Mark Coton (“Value Betting”) and Clive Holt (“Be A Successful Punter”) who were the first to apply their own race ratings as the foundation of their betting in allocating a score against certain factors such as ground, distance, jockey, trainer form etc etc and when totaled create an objective assessment of each horse. Since those early days, ratings have developed into sophisticated computer algorithms by the best brains money can buy.

Although I have Software Engineering and Computer Science qualifications I am not about to attempt to create my own computer program. I don’t have the time or inclination so like most of my handicapping, my inspiration for my ratings comes from the Americans who like to establish objective measures or “par” standards for speed, class and pace ratings.

My rating par scores are established using statistical techniques. Then  each horse is matched against these standards to create a rating and subsequently a relative ranking between contestants.

I have stated to create ratings for All Weather racing and now I have a statistically significant data set, for races at Bath racecourse as well. So far the ratings are performing as per all ratings in that the top rated horse has a poor strike rate. However the top 4 rated horses are producing some amazing results!

Thursday July 22 2010 – Bath 17:10
Titus Gent 63
Bateleur 60
The Name Is Frank 59
Witchry 57
Mandhooma 57
Emiratesdotcom 49
Talamahana 48
Wooden King 46
Blushing Maid 44
Dynamo Dave 39
Like For Like 38

Tote Win: £4.20  Tote Place: £1.20,£4.30,£5.00
Straight Forecast: £32.68  Tricast: £317.63  Exacta: £21.40  Trifecta: £119.20
Swingers:1&2:£4.80, 2&3:£15.40, 1&3:£7.80

If the ratings are proven during their trail period, the strategy is to let the them sought out the wheat from the chaff in the initial phases of the process. This should allow me time to focus my handicapping on the main contenders and time to analyse more races,  identifying value and construct profitable bets such as exacta, trifecta, placepot perms and spread bets … … …  in theory!

To close I’ll modify one of Nick Mordins quotes

Ratings are like vampires, once you bring them out into the daylight they wither and die

What I will say now is spread betting is not for the faint hearted. Not because most spread betting companies plaster warnings across their web sites indicating that this form of betting can be dangerous to your wallet.

No, it’s also the knowledge required to understand how the various markets are formed and determining techniques to find an edge that’s difficult and beyond most punters. Not that I am being snobbish, it’s just the way it is in this form of gambling.

Where to start? Well, real information (not top level stuff) on the mechanics of spread betting is scarce, which in some respects is good as it limits the knowledge to those higher up in the food chain that are prepared to put the work in to become successful verses those that are not. Think big fish eating little fish in the big pond that is the market and you get my drift.

Fortunately, I am in possession of Alan Potts book “The Inside Track” which upon reflection has an excellent section on spread betting. Dave Nevison’s book “A Bloody Good Winner” mentions spread betting in places and is on my list for a re-read.

I also came across spreadbettingwizard in a web search which in my view provides excellent advice for the novice and techniques to get you started. Many thanks to Billy who took the time to walk me though his thoughts on the subject.

Ultimately I shall work toward proficiency in the Racing Post Favourites spread.

In my view the Racing Post has a disproportionate influence in horse racing given the fact that the pages of this paper are plastered on the walls of every book maker and read at the morning coffee tables by mugs, enthusiastic amateurs and professionals alike.

Common sense dictates that you cannot outsmart the public if you are handicapping with the same information and methods as the public

As touted by many American handicapping authors the name of the game in horse racing is to beat the favourite.

Under normal circumstances the jolly is the selection of the crowd who is the best handicapper on the planet. However, the Racing Post favourite is chosen by a very knowledgeable subset i.e. the Racing Post handicappers and odds compliers who like us all sometimes make mistakes. By focusing on this market my objective is to handicap the handicappers and the market makers i.e. Sporting Index and not the crowd.

Also a subtle but important point is my perceived edge over this subset. “in theory” I can tilt the odds in my favour in pitting specialist knowledge in All Weather racing against those that I suspect are generalists who, as mentioned above heavily influence the betting decisions of thousands of punters across the land.

if you want to make money … big money … do what nobody else is doing

The other advantage of the Racing Post Favourites Index is that the favourite is named before the race starts by virtue of the Racing Post Betting forecast which is published online at 7.30 pm the evening before the race. As they say, the name of game is to beat the favourite so I can devote significant time pre race finding false or vulnerable fav’s in isolation to market changes on the day of the race.

However Rome was not built in a day so to cut my teeth, I’ll dip my toe into the Race Index spread as it allows you to play bookmaker and provides attractive rewards for backing horses that make the frame (see below)

Given the makeup of both markets i.e. points allocated for coming 1st, 2nd or 3rd you do require a method to allow you to determine the probability of horse placing in the frame as well as winning.

After burning a lot of midnight oil in studying the various methods (and maths), I have now modified my tissue spreadsheet to automate this task.

For those that are interesting google “Harville Formulae” and note that what may seem an intuitive solution to the problem of calculating place probabilities in academia is quite different when applied to the real world. Its way beyond my maths skills however , based on advice from American handicapping literature I can derive a close approximation in the spreadsheet using simple and easier to understand logic.

Once each race is handicapped and prices calculated for each runner, I can form my own market and match this against the various spread betting firms to determine where the value is, BUY or SELL.

For example in today’s 3:40 at York I create a 100% tissue based on the current order of the market.

Obviously there is no edge as my tissue is the same order as the market. From a “value” perspective you can also see there is no edge by looking at the “% bank” column which uses the Kelly criterion in its calculation.

As this is a 12 runner race compare the 50-25-10 spread column with the race indices from Sporting Index

Again no edge, hmmmm maybe I’m onto something.

Note also the Betfair place odds of Moon Indigo below. BTW: my place book approximation in the spreadsheet correlates well with the Betfair market so an extra brownie point for me!

The following examples outline the up’s and down’s of spread betting.

The spread for Moon Indigo is Sell 4, Buy 6.

If you think he has a good chance of placing 2nd or 3rd on Betfair you get 7/1 or loss of stake if unplaced.

On SportingIndex If you bought Moon Indigo at 6 your return is 19/1; 25 points for 2nd minus 6 points = 19 which is multiplied by your stake to determine your actual payout. Happy days!

You would win 4 times your stake if Moon Indigo placed 3rd. The down side bit of the equation is Moon Indigo unplaced loses you 6 times your stake. Ouch!

If you wanted to oppose Moon indigo making the frame, on Betfair you would lay him at 9/1. If he subsequently placed you would lose 9 times your stake.

On SportingIndex if did the equivalent and sold at 4, Moon Indigo unplaced would net you 4 times your stake (4 – 0 points). A 3rd place costs you 6 times your stake, a 2nd place costs you 21 times your stake. Unfortunately, if Moon Indigo for some reason won the race, in selling at 4 points you would lose 46 times your stake; 4 minus 50 points for the win. Ouch to infinity and beyond!

Hence the need to paper trade spread betting and this market for a while to get a feel for its makeup and then move onto Racing Post Favourites if confidence builds and my tools prove reliable. I shall also get on the phone to Mr X who can refer me to Sporting Index to take advantage of their free bets for fresh fish.

It was a long journey home returning from the Winter Derby at Lingfield by National Express bus. Enough time to read and review my pre race notes, subsequent results and mull over my handicapping in general.

A free flow exchange of handicapping approaches and techniques with Sandracer during the meeting made me realise that I may be over complicating my tissue process. Making one and using it during in the cut and thrust of the betting ring necessitates a simpler approach. I have identified changes and will make adjustments in future races.

My records indicate I’m very good at picking horses to place, a pre requisite for intrarace exotic bets such as the Exacta and Trifecta, so what motivates me now to play these bets?

Overlays, payoffs that are higher than they should be are abound in the exotic pools because many players approach them as nothing more than complicated win bets rather than entirely different entities that require different approaches. Simply put, the exotic pools are still inefficient markets, and their inefficiency increases as the bets become more complex and the potential for big payoffs increases.

How many times does the second favourite place second? What is the Exacta payout when betting first and second favourite in a 7/2, 5/1 reverse forecast? If you don’t know the answer to these questions, then stop betting as your minnow stake swells the Exacta pool for the sharp minds and bookmakers whales to gobble up.

I didn’t fully recognise the value in the exotics until I started to miss out on some tasty payoffs (identified by my records) therefore I can assume that my handicapping has matured to the point where I can add exotics to my armoury; for the moment this will be the Exacta.

According the literature, the Exacta (picking the one, two finishers in order) and the Computer Straight Forecast CSF (the bookies equivalent) should be unleashed as follows

Exacta as a win bet
When the favourite is your first choice but an underlay as a win bet. Play the favourite on top (first) over what you consider to be the likely placed horses

Exacta as place bet
When the favourite is vulnerable to a long shot(s). Bet the long shot to win and play the favourite on top of your longshot(s)

In chaos races
If the favourite is false and there are multiple win contenders, write down the probable exacta payoffs in table or matrix and bet the highest paying combinations.

Note, the above assumes the following

1. You can identify a legitimate, vulnerable and false favourites
2. You can identify placed horses(s)
3. You can calculate the fair payouts of various horse combinations based on your own or the publics betting forecast

I’m setting up a separate bank for exotics to put the theory (and my handicapping) to the test.

It’s always folly to tempt the patience of the gambling gods but a pleasing set of results yesterday

Southwell 9th March – Contenders

4:10
Kings Ace
Louisiade 2nd
Madison Belle 1st @ 7/1

4.40
Exit Smiling
Mozayada
Trans Sonic 1st @ 7/2

5:10
Tri Chara
Hard Ball
Vogarth

5.40
Cape Of Storms
Don Pele
Fulford 2nd
Gracie´s Gift 1st @ 22/1

My weekend review of my Pace Process and assumptions (think aggregation of marginal gains)  really helped to visualise the running of each race to great effect.

What was really pleasing was the result of the 5:40 given that my recent visit to Southwell provided a real time lesson of how efficient the market is at this venue and therefore needs to be monitored closely up to the point when the runners enter the starting stalls.

The drift on Betfair of pre race favourite Fulford gave the “kiss of death” signal I needed to dutch the other contenders for a positive result.

The other lesson from my Southwell expedition was the requirement of early pace for distances up to 8 furlongs. Below are the in running comments for each of the winners from the races above

Madison Belle – led, headed over 4f out, led again over 2f out, soon pressed, ridden and held on gamely opened 8/1 touched 9/1

Trans Sonic – prominent, led after 2f , about 4 lengths clear over 2f out, ridden out touched 4/1 £1600-£400 (x8)

Bold Diva – held up, headway to chase leader over 1f out, ridden to lead narrowly inside final furlong, driven out opened 4/1

Gracie’s Gift – tracked leaders, led 2f out, ridden and ran on opened 14/1 touched 25/1 £5000-£250 Each Way

I don’t mind being wrong once in every four attempts in my pre race pace analysis as long as I can reduce the odds in my favour when eliminating horses that are running against the pace bias for the remaining three occasions.

Among serious handicappers there are two major schools of philosophy. In one intellectual camp are the empiricists, who view every race as a unique problem to be solved by intuition and analysis. They evaluate horses’ records by weighing many factors and subtleties, and reject the notion that a horses’ ability can be measured in any precise, concrete way. In the other camp are the rationalists, the speed handicappers, who believe that a horse can be measured by how fast he runs. Speed handicappers perform various arcane calculations to translate a horse’s ability into a number.

No area of handicapping inspires passion of controversy. The advocates of speed figures share the view of Pat Lynch, an astute New York handicapper, who says,, “Time is the one absolute truth in the game.” The critics, who include writers of most books on betting the races view speed handicappers as madmen looking for certainty and easy answer in a game in which they don’t exist. Author Tom Ainslie approvingly quotes a horseplayer who says, “very few speed handicappers are lolling in loot, In fact, one of them we know is rarely let out of the attic, and steadfastly maintains he is Martin Van Buren”

For the most of my career as a horseplayer, I shared this scepticism. But when I finally became acquainted, I was infected by their messianic fervour. I started making my own figures. I proceeded gingerly at first, with caution of a bather dipping one toe in a cold lake. But soon I was completely immersed. Discover figures were one of the momentous events of my life.

Andrew Beyer – Picking Winners

With an average strike rate of 15% and 96 pts profit since July 09, you would think that I was well on my way toward professional status. Alias when I benchmark my strike rate performance against newspaper tipsters, there is room improvement

How did the cycling team win eight gold medals?

The explanation used by the cycling performance director, Dave Brailsford, was that it was achieved through the “aggregation of marginal gains”. By looking for a 1% gain at everything they do, from mechanics upwards, they pulled together a whole series of small gains that enabled their athletes to dominate their sport

Using similar techniques I have reviewed my overall process and determine that I should reinstate the use of Speed Ratings in my approach.

Why use Speed Ratings?

The purpose of a speed rating is to take the different tracks and conditions creating a common number using a complex computer generated number that gives us a representation of how fast a horse is. The numbers are generally between a low figure (say 50) and high figure (say 100,) the higher the number the faster the horse.

Speed Ratings allow a handicapper to analyse a horse’s particular performance in a race simply and easily, without having to worry about which size track the time was run at, or what the condition of the track was during the race, or in some cases even the distance of the race itself.

As outlined in various All Weather racing books, given the nature of racing on this surface, Speed Ratings are particularly useful for contender selection (by the use of Class Pars) as most races are pace oriented and therefore truly ran (in theory)

Back in 2004 in my fledgling punting career (my mug days) I utilised Speed Ratings extensively based on the teachings of Mr Mordlin. In fact way back then I created a price of software to automatically produce “pseudo” Speed Ratings based on final time and beaten lengths. With the demise of my free online source of data for the software (Teletext), I abandoned their use in preference of form analysis.

Little did I know that it would take me years to become proficient in other aspects of handicapping before returning to Speed Ratings.

As normal my dog Muttley woke me up early for his morning constitutional and food. Border Terriers are a stomach on legs so can be persistent in the pursuit of a tasty morsel even at 6:30 am Sunday morning.

Instead of firing up my Nokia E72 to check out price movements on Betfair, with only one race of interest today decided to continue my read of Dave Nevison book No Easy Money: A Gambler’s Diary. I have read his first book (A Bloody Good Winner) which was brilliant as it contained many crumbs of comfort for us aspiring professionals.

Though sceptical of his second book based on reviews in various forums, the book was purchased by my daughter as a Christmas present (there’s a rumour doing the rounds, often repeated that people find it difficult to buy me presents) so decided to plough through each page for educational reasons.

Dave and I are alike in that we like a punt and a good party (combining both if we can, ah my days in Las Vegas) so the pages which recited his exploits from race courses up and down the land didn’t educate me in that respect.

For me the revelation was contained in the chapter “Drowning in the Pool” where he has a crisis of confidence after losing bundles chasing the Tote Scoop 6 pool.

Dave is a value punter  (and I try to emulate him) therefore constructs a tissue.

My job is to apply my knowledge of the form to the particular circumstances of the race in order to put a figure next to each horse, expressing its chance of winning. The figure is the price I consider to be an accurate reflection of its chance, whether 6-4 on or 25-1 against.

Pre race, he matches his opinion (tissue) against the market and backs horses that are paying > 15% edge.

However that opinion is sooooo 2009, when reading the chapter above and after yesterday’s observations plus corresponding drift on Betfair.  The new mantra for 2010 is the efficiency of the market

It was interesting to read Tom Segal, Pricewise in the Racing Post, arguing in the Weekender that no-on knows better than the collective wisdom of the market. That wasn’t true a few years ago but I am beginning to thing that it might be today.

The market is different from pre-Betfair days. It is now an amalgam of the best racing brains in the country and it reflects horses’ true chances of winning more accurately than ever before. I have come to terms with that and try to use it to my advantage rather than stick two fingers up at it. There isn’t much profit to be made from following the crowd but if the crowd is the one that forms the market, which means Betfair, then instead of being against the crowd, I have to try to be ahead of it.

I think that more than before, in decent-quality races horses who drift from their morning prices don’t win while those who are already prominent in the market shorten further, do. These price movements represent market sentiment, as opposed to the opinions of individual odds compliers, and market sentiment has become a more important factor

I don’t completely subscribe to all of the comment in the above passage. The market doesn’t always get it right (the current turmoil in the financial markets is testament to that) however, those us who are statistically minded note 80% efficiency in the SP market. If I were to repeat numbers like that I would be writing this post from my beach house in a costal resort somewhere in the Caribbean.

Also Tom Segal was not the first to highlight the efficiency of the market as applied to horseracing. In his book “Fast Track to Thoroughbred Profits” written in 1984, Cramer highlights the collective knowledge of the crowd using a fictitious time traveller who listed the betting public as his top three hero’s of the century. Why? Through their collective opinion they achieve i.e. the favourite the best strike rate of any handicapper.

Therefore to ignore the crowd is potentially a loss making strategy. Within this in mind I’ll probably adopt Dave’s approach and use my tissue to identify value in the early price markets. In the minutes before the off I’ll accept shorter prices on horses that have shortened though my tissue and side with the market in avoiding horses at longer “drifting” prices than my tissue.

The only benefit of spending all afternoon in Corals earlier this week was that it enabled me to observe each race on the Southwell card from early show to finish. . In between each race I had time to review the thoughts of the Racing Post commentators and tipsters (Trading Post, Training Centres et al). I was amazed that their opinion matched my own yet they (like I) ended up getting it wrong.

My observations matched against my expectation (pre race handicapping) resulted in a recognition that I need to bring something different to the game instead of replicating what everyone else is doing.

There’s no sense playing this game if you can’t sit back after a long day of racing and analysing your play. If you can’t learn from your mistakes or accentuate your strengths, then there is just no way you can be a winning horseplayer. In horse racing, honesty really is the best policy. If you’re deceiving yourself, either in terms of your handicapping ability, your proficiency at making smart bets, or your money ledger at the end of a meet, then you’re destined for the poorhouse. To win consistently over time, you need to be honest and analytical about the way you play the game.

“What is means to handicap yourself” – Six Secrets of Successful Bettors

In working toward identifying what needs to be addressed, in post race review I shall measure my performance in respect to of the following categories (I may add more or modify the ones below)

Selection

• Win: The race was run as expected, money in the pocket, life’s good
• Pass Legitimate Favourite Win: Passed the race as pre race analysis indicated that the favourite was a good thing that subsequently won.
• Lost – Final selection lost the race

Money Management

• Poor Value – Obtained the wrong price for my bet
• Discipline – Bet like a mug punter or bet on the tilt.
• Staking – Bet too much (or too little)
• Price – Obtained value odds for my selection

Process

• Handicapping Error – Over/under handicapped the race or missed an obvious factor
• Pace Analysis – Read the race completely wrong
• Contender Selection – The winner of the race was missing from my pre-race shortlist
• Categorisation Error – Short listed eventual winner incorrectly (Win, Place, Show column)
• Professional – Followed the handicapping process which resulted in a positive outcome

Using Excel Pivot Tables I can create a chart to visualise my performance and identify areas for improvement.

I’ll kick off the metrics collection in January as part of my New Year improvement plans

My “when I become professional” fund is “invested” tucked away in physical gold for the interim therefore the relatively small sums I’m betting now can be written off to “education expenses”. However it’s still disappointing that results have not gone my way after a lot of hard work. I’m 36 pts down since records began in July.

The fact of the matter is that I have a lot to learn and skirmishing in the mud and the blood of grade 5 and 6 All Weather races is bound to place a strain on my handicapping (and betting bank).

Racing is full of experts who have been trained to watch the sport for years. Why should a novice punter have any chance of being able to identify the occasions when the experts have it wrong?

The simple answer is that this expertise can only be required over time and that betting will only become serious business when the necessary skills have been mastered. By realising that you are seeking to back a horse with underestimated factors and bet against a horse with overestimated factors, you will start to acquire the right mindset. By learning to take no interest in betting factors that are merely positive i.e. good for a horse’s chance of winning, you will start to train your eye in what to look for.
Patrick Veitch – Professional Punter

With the comments above the focus for this month is to look beyond typical and obvious form analysis to focus on handicapping factors that provide wager value. I shall also spend more time reviewing race videos of past performances.

Unfortunately this will increase the time required to analyse races; to counteract I shall limit bets to one a day or at weekends as indicated in the betting calendar.

For the approach to work, one requires a knowledge of the prevailing track pace bias.

Previous at Wolverhampton any horse drawn low that raced prominently over 5,6 and 7 furlongs instantly made the shortlist. Having just updated my pace charts for Wolverhampton I note a fundamental change in the track bias which now favours hold up horses over 6 and 7 furlongs.

Not sure if this is due to the long spell of dry weather we have had (polytrack rides deeper when there is no moisture in the air) or the Clark of the Course has instructed the maintenance boys to harrow the track a bit deeper.

Either way I shall keep on eye on the bias as there may be opportunities to oppose short priced front runners at tasty prices in the coming weeks.

In recognition that the fact that I am modifying my handicapping approach based on the grade of the race, instead of trying to shoe horn a one size fits all approach to my tissues I should also modify my odds compilation process to take account of the fact that the form of horses running in the lower grades is suspect, unreliable and the nature of the races are too chaotic for a process that is determintistic.

Keeping it simple, I shall revert to the process outlined in this post for grade 5,6,7 races and this process for races above these grades.