Tuesday, 26 August 2008

Value Betting - The Framework

As Markomar said in his comment on my last post: you will only get value if you identify something that has not been factored in to the price…
Graeme would have few peers when it comes to solving a competitive handicap – but whether his selection represents value, is out of his hands. A number of the big tipping lines seem to employ similar methods to Graeme for picking horses and once they have made public their views, the chance of getting a decent price has gone. Consequently, not only does Graeme have to resolve the riddle of a race – he also has to try and find an angle that will not be picked up by many others – a tricky job, made even more difficult…
I use to specialise in high class races. But similarly, these races are analysed and picked over to such an extent, that getting a value price on a selection, is nearly impossible.
If you bet in either of these situations, you have to be extremely accurate with your race reading, as the long term profit margins are extremely tight…

I’m a big fan of Tom Segal and he was bemoaning this very fact in his column in the Weekender a couple of weeks ago. If Pricewise doesn’t think there is value to be had any more - what chance have the rest of us got…!

Despite the difficulties - I still maintain that the vast majority of my bet are ‘value’ bets (I intend for them all to be value bets – but I have to admit that the occasional duff one gets through the net !).
In reality, I don’t have one method - I have a number. These have evolved to suit the type of racing I like to watch and the times that I am available to bet.
However, the bottom line is, that for every 10 bets I place; on average, 1 will win and 1 will trade around even money. This coupled with the fact that the odds of my average selection is 25-1, sees me comfortably in profit in the long run.
However, an average strike rate of 1 in 10 does mean that losing streaks of 20, 30 or even 40 aren’t that uncommon ! Whilst I have the belief to over-come these, they can affect judgement a little. Consequently, I place a low IR lay on all of my selections (around even money) which results in me winning approximately the same amount whether my horse wins or nearly wins… I refer to this as ‘smoothing out the luck curve’ ! It helps keep me sane when my horses are getting pipped on the post; just failing to get up or falling at the last…!

So, onto the methods I employ. The 10 or so ‘selections’ that I published on Saturday, Sunday and Monday were a fair representation of the kind of horses I back (with the exception of Coastal Path and Levera). I will therefore explain each of my methods, using these horses as examples. Therefore, if you haven’t read my previous posts or have forgotten the detail, now would be a good time to go and refresh yourselves, whilst I compose the next post…!!!

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