Do you think it’s fair to punters to announce a change of tactics 5 minutes before the jump?

I could cite plenty of examples of very late notification, but Iridescente at Sandown Hillside this week will do just as fine. She had settled 1st or 2nd at her last six runs and with the two drawn inside her today (and one immediately to her outside) having no tactical speed whatsoever, most speed maps had Iridescente getting a comfortable lead and she was the favourite for the race.

Well at exactly 2:25pm, five minutes before the start of the race which also happened to be the first leg of the quaddie, it was announced that Iridescente was going to be ridden more quietly. Now I am not going to question Anthony Freedman’s tactics, but the timing of this information being made available to punters was simply not good enough. I’m not sure if this is due to complacency or incompetence, but either way the fact is it happens far too often and it’s a raw deal for punters.

Do you think it’s right to put just a handful of owners ahead of thousands of punters?

To 99% of people involved in the industry it seems ridiculous that unraced 2 year-olds don’t have to trial in public prior to being allowed to race in Victoria.  But somehow the 1% hold sway and refuse to budge in the face of overwhelming evidence that interest and betting levels are badly affected when a horse has literally no exposed form and punters can either guess or sit out.

How about this for a radical idea? Let’s trial trials and for the next racing season don’t allow a horse to race unless they have had an official trial. For that 12 month period we can see what that does to betting turnover on those races. If it doesn’t have the substantial improvement almost everyone expects, then we just go back to the old way where owners do what they want. Is that too much to ask?

Do you think we can get overall and sectional times that are actually accurate?

Every race, every day is wrong. It’s just a matter of by how much.

Vince Accardi of Daily Sectionals has proven this to various state racing bodies and while all understand the problem, only a few are actually doing something about it.

Samui Lad’s win at last Saturday’s stand alone Hawkesbury meeting is an example of how punters can be misled. The difference between the official time and the actual time was 1.04 seconds which is greater than six lengths.

There was not a single race at Hawkesbury that was within even 1 length of the actual time.

Punters deserve better.

Do you think it’s right that corporate bookies don’t have to take a bet?

On-course bookies have to take bets of a certain size or hand back their licence, whereas these corporate behemoths with multi-million dollar marketing budgets can cut off anyone they like as soon as they like. The funny thing is you don’t even have to be a winner. If your betting activity falls foul of their ‘find-anyone-who-has-a-clue-and-ban-them’ algorithm you are a goner.

For the corporates it is a race to the bottom where they only want to deal with losing punters and refuse to believe that using winning information can actually benefit their business. This situation is only getting worse and without any kind of regulation it’s unlikely to change any time soon.

Do you think the Racing NSW win is actually good for the industry?

V’Landy’s and co made the most of their court victory but anyone who understands punting won’t be celebrating too hard. The Betfair model is not sustainable in its current form and there aren’t many businesses that will continue operating if they can’t make a profit.

A betting exchange has punters and traders betting against each other with high turnover but in some cases little or no gross profit. Under the new 1.5% of turnover model it is possible for two punters betting against each other to turn over $1m, with both breaking even, but Betfair has to cough up $15,000 to the racing industry. Or a punter betting $1000 at $1.01 will win $10, yet Betfair pays tax of $15 on this bet.
Betfair creates new money in the market and produces a more competitive marketplace, but the court decision means that racing is now a more expensive product and is likely to slowly but surely lose market share to sports betting and other more cost-effective alternatives.

Do you think we can get a national tote pool in our lifetimes?

If we can have Hong Kong and Singapore bet into our pools do you reckon we can get the three totes together in our own country? It’s a simple request but one I understand has some complex aspects that would take time to resolve.

Well I believe that anything that is really worth doing is difficult so the fact that this project would take a lot of work and require interstate co-operation for a common goal is no excuse. Surely our smartest minds can get together and manage a 12-18 month project to make it happen.

Do you think I’m being unreasonable?

By nature I am a very positive person and it wasn’t so long ago that I wrote a post outlining a number of reasons why punters have never had it better. But there are so many areas we could, no make that should, improve if we really want racing to thrive.

As well as the above I’d also ask if you think we can work towards a track rating system that is a more accurate guide? Do you think it’s fair that breeders basically get a free ride even when selling for hundreds of thousands or even millions of dollars? Do you think we really need four racing channels on pay TV? Do you think race clubs should actually employ someone who has the dedicated role of attracting punters?

Everything in the racing industry starts and finishes with the punter, but do you think he’s getting a fair go?

Let’s start by looking at all runners in the first five in the market for the period 2009-2011.

A one per-cent difference in profit on turnover is not significant, but the fact is 2nd uppers were definitely not a bad betting proposition. Every horse and every race should be assessed on its merits, however as a very general rule the alleged 2nd up syndrome means nothing from a punting perspective.

But let’s dig deeper and focus solely on second uppers and for the purposes of this exercise I have excluded horses with just one career start, because I wanted to only assess those racing second up from a spell.

Track condition

What about today’s track condition? Is it better to be racing second up on a firm track or one with some give?

Well the answer is it doesn’t really make much difference.

Some other factors I looked at where the results didn’t prove to be significant one way or another were the horse’s age and sex, today’s distance and the first up track condition.

Trainers

In our series on first uppers it was interesting to note just how much punters over-rate first up horses from some of the big stables. Some of the biggest names in the Australian training ranks had poor first-up records in terms of their results for punters, but does this carry through to second uppers as well?

Bound To Blush was the expected leader here and found the front fairly easily, with Hallowell Belle sitting outside of it. Detours sat on the fence behind the leader and Ever The Same secured a good run, one out and one back. The eventual winner, Angel Of Mercy was getting a nice run 5th, three back on the fence. Hallowell Belle was asked to come after the leader in the straight but didn’t really ping. Perhaps this was a result of a lot of racing for her recently. Ever The Same tried to run on, but at the same time Angel Of Mercy had got the split and taken advantage of an easy run in transit. She sprinted well for a good win. Bound To Blush kept on ok, also after an easy run and there was not a lot to say about the rest.

Follow: Angel Of Mercy

Race 2

1st    Fat Al                       Nash Rawiller
2nd   Ambidexter                Kerrin McEvoy
3rd    Rekindled Alliance     Craig Williams

Huegill missed the start hopelessly here whilst the short priced favourite Fat Al was ridden with clear intent to lead. He did so after about 100m. Devonshire Duke and Ambidexter disputed second for a few hundred metres, with Ambidexter eventually finding the spot outside the leader. Rawiller slowed them up nicely on the leader and he seems to be the horse with the most upside in this race. Horses such as Iggy Pop and more so, Rekindled Alliance and Isopach found themselves a good way off the lead. The later two were second last and last with Rekindled Alliance taking off 600m from home to try and get into it. In the straight it appeared for a few strides that Ambidexter would go past Fat Al but once he wound up he came away for a clear win. Whilst that was going on, Rekindled Alliance had run away from the rest of the field into third, but he is a costly conveyance. Isopach made reasonable ground after being given no chance due to the slow pace and can find a suitable race.

Follow: Isopach

Race 3

1st    Pierro            Nash Rawiller
2nd   Dear Demi     James McDonald
3rd    Tatra             Tommy Berry

Raceway led as expected with Pierro outside him in the early stages. Tatra then came around them and took on Raceway, as we saw in The Sires. This gave Pierro a lovely run in third and really it was only ever a matter of how far. In the straight he gapped them, with Dear Demi running on well from the back and Tatra doing a good job to hold on for third. All credit to the winner, but I never get carried away with two-year-olds until I see them come back and do it as a three-year-old, many fail to as their peers mature further and learn more about the game.

Follow: Dear Demi, Tatra

Race 4

1st    Skyerush       Blake Shinn
2nd   Fibrillation      Brenton Avdulla
3rd    Divorces        Kerrin McEvoy

Plenty of them disputed the early lead here, with Fill The Page, as expected, eventually taking up the running from Miss Keepsake. Crafty Irna was wide all the way here and pushed even wider on the turn. Skyerush, which won the race, was a fair way back, but getting an economical run in transit. At the 200m mark you didn’t really know where to look, with plenty of chances spread across the track, but the gap was appearing for Skyerush, who accelerated nicely through it for victory. The run of Fibrillation off a months break was good to run second and Crafty Irna, although becoming costly, has to be given another chance after the wide run and not being beaten far on the line. Miss Keepsake was beaten at the 200m mark and I can’t find any excuses for her.

Follow: Fibrillation, Crafty Irna

Race 5

1st    Atlantic Jewel   Michael Rodd
2nd   Rain Affair        Chris Reith
3rd    Ofcourseican    Kathy O’Hara

Rain Affair showed his customary speed to lead easily, with Rodd electing to have Altantic Jewel right there in second placing. Happy Zero and Albert The Fat were the next two in running. Rain Affair took off before the turn which meant Atlantic Jewel was chasing. There will be those that say she was not impressive but in my opinion this was an excellent win. She was stepping up in class and made to chase a very good horse and she was never really in doubt in the straight, despite a smaller margin today. Rain Affair tried hard as always and the runs of Albert The Fat and particularly Ofcourseican were very good, but simply in another class.

Follow: Ofcourseican

Race 6

1st    Niwot                    Dwayne Dunn
2nd   Efficient                 Michael Rodd
3rd    Once Were Wild    Jim Cassidy

Solid Billing would have been expected by most to find the front and did so, with Once Were Wild sitting second. Within no time at all, both Permit and Niwot had found lovely positions on the fence, not too far from the pace. Our Serena was about the only one that covered any extra ground early. They strung out a bit in the middle stages and at the 1000m Permit was in all sorts. This was later put down to a problem with a shoe. Just before the 600m the runs started to come from the back, most noticeable was Precedent who took off from last. Efficient had also started to make his move from well back. Niwot due to being positioned well in running got to wait until the corner before coming out to make a run and this was the difference in the end. He outstayed the other two whose long runs told on them. Once Were Wild, that was on the speed all the way ran well for third and realistically the rest just plugged. Drunken Sailor that was in the market never came into it and perhaps 3200m is not really his go, as he has only won once over it in 8 attempts. The usual suspects such as Nextanix and Anudjuwan were running on – surprise surprise!

Follow: Once Were Wild

Race 7

1st    More Joyous       Nash Rawiller
2nd   Manighar             Damien Oliver
3rd    Secret Admirer    Brenton Avdulla

The More Joyous Stakes – that’s what this race should have been called such was the impressive nature of her win. Rawiller took the initiative to take up the running and she was never going to be beaten from there on. Rekindled Interest settled outside of her, with Jimmy Choux on the fence in third. They pretty much stayed in their order until the 600m when the runs came. Americain was off from the back and that got Rekindled Interest going. They both basically moved up to More Joyous before the turn. Americain was gone as quickly as he started his run and I am not sure what to make of him from here. The bolter Speediness got a run through on the fence and ran the race of its life, although beaten a fair way late in the peace, whilst Rangirangdoo and Secret Admirer did their best to come down the outside. It was all academic, as More Joyous had bolted away. Manighar didn’t have the clearest run early in the straight, but proved his great form by running a clear second and wins the race bar running into a freak on the day. Jimmy Choux does not appear to have come up this campaign.

Follow: Manighar, Speediness in something easier.

Race 8

1st    Tiger Tees     Chris Reith
2nd   Pinwheel       Kerrin McEvoy
3rd    Neeson         Michael Rodd

Tiger Tees showed his customary barrier brilliance to take up an early lead. Dee’N'Gee was outside of him and Neeson was trapped three wide. Latin News was back along the fence with Nobby Snip one off the fence, but didn’t really look comfortable between horses in running. Hood tracked closer to the outside rail than the inside the whole way and dropped out badly. Pinwheel was in what seemed like a hopeless position on the turn, but got inside runs to flash home and only narrowly miss. Tiger Tees just kept defying them in the straight and is an under rated horse with a good record. Neeson was very good after being wide, whilst Riva De Lago again confirmed its position in the “sack book”. Nobby Snip worked home ok once clear of horses and can be forgiven for this run.

Follow: The first three were all very good, forgive Nobby Snip. Continue laying Riva De Lago this campaign.

Specials from the meeting: Angel Of Mercy, Speediness, Pinwheel, Neeson.

Race 1 – Monjon Security Handicap  

PLACEMENT            Katelyn Mallyon    $4.60
TURNITUP                Linda Meech         $4.60
FOLDING GEAR       Ben Melham         $3.20F

Placement continued her good run of form with another excellent ride from Mallyon. They jumped well and she settled in the lead and was able to get a pretty easy time of it from in front. A few were making a couple of moves throughout but it wasn’t enough to catch her when she kicked away from them on the turn. Turnitup hit the line well and Folding Gear who didn’t look suited at all ran on well for third.

Worth noting: Forgive Folding Gear, he was down in distance, up in weight and on unsuitable ground.

Race 2 – Dr. Michael Irlicht Handicap        

GALBRAITH              Katelyn Mallyon    $4.60
GENERAL TRUCE     Ben Knobel          $3F
BROKEN                  Dean Yendall        $5

Galbraith broke through again and continued to perform really well over the short trip. He camped off of the back of Fab Fevola who led them (as he does) but he was unable to finish off. Another good ride by Mallyon who stalked them on Galbraith and he was too good. General Truce is the best horse in the race but he has been up for too long and wasn’t at his best. He needs a spell. Broken is a handy horse who was off of a long break and he ran well into third.

Worth noting: Happy to follow Broken in suitable, more than capable horse in the right race.

Race 3 – TROA Supports National Jockeys Trust Handicap  

VATICAN                 Billy Egan            $7
ZAMORAR              Jake Duffy            $2.30F
COUNTER SIGN      Katelyn Mallyon   $11

All the talk was about Zamorar who was coming off of a good run in Adelaide and had some Sepoy form in a previous campaign. He ran well but was nailed late by the fast finishing Vatican who had the sit on him and finished off with an excellent sprint. It was a nice win by Vatican who is a specialist 1000m horse. Tres Vite got caught wide and had no luck at any stage from the wide gate. She beat Vatican the start before and can be forgiven.

Worth noting: Follow Tres Vite, best horse in the race.

Race 4 – National Jockeys Trust Redoute’s Choice Stakes

WALES        Steven King         $21
DOMINANT   Andrew Mallyon   $9.50
MAURY        Danny Nikolic      $3F

Maury had the exposed form and a couple of good wins and led for most of the way but was no match for the impressive and well bred debut winner Wales (Redoutes Choice/Valkyrie Diva). He settled back in the field and came with a big strong run and was too good for Dominant. Pretty impressive to win on debut like that over 1200m and Wales looks to have a bright future. Dominant protested but it was dismissed.

Worth noting: Maury had been dominant before so the first two might be pretty handy

Race 5 – PFD Food Services Handicap    

LUCKY PENNY      Linda Meech   $4.80
TAI TAI TESS         Craig Newitt     $9.50
ROSE PATTERN    Damian Lane    $41

Lucky Penny won well on debut in a maiden by 8L and was being asked to take the next step, straight to Saturday grade at Caulfield. She settled just off of the leaders and enjoyed a good ride from Meech before heading into the straight and running away from them. Very impressive performance at her second race start. Tai Tai Tess did well to run into second with the big weight, she had 5.5kg more than the winner and was beaten 2.75L.

Worth noting: Follow the first two over the line

Race 6 – Ranvet Handicap    

ZABISCO               Nicholas Hall        $6
SIGNOR SOCKS    Dean Yendall        $41
THE ZEEBAC         Lincoln Coffey       $101

Looked a hard race on paper but the market pretty much got it right with the winner Zabisco. He looked at home when he was able to settle off of the speed and come with a strong run down the middle late to get the money. Good ride by Hall who rode a treble for the day. He looks a horse that has taken the stable a little while to work out. Signor Socks and The Zeebac did well to finish second and third at big odds.

Worth noting: Be a little wary with the form through this race

Race 7 – LUCRF Super Handicap

THE NIGHT’S HOT   Nicholas Hall       $5
MANILA JEWEL      Ben Knobel         $6
IPIOGA                   Jake Noonan       $31

The Night’s Hot got a city win on her resume when she finished too strong for them with a run from back in the field. Again another great ride by N Hall who seems to be one of the best at timing his runs from back in the field. Manila Jewel gave another good run, I prefer her on dry so she is going well and close to a win. Ipioga was a long way away from the first two and ran into third. It was one of the weaker fields we have seen at Caulfield on a Saturday.

Worth noting: Not much to get excited about here, follow Manila Jewel.

Race 8 – The Louise Cooper Plate

BONNIE MAC             Nicholas Hall     $2.80F
PRINCESS NARINE    Mick Price         $8.50
SUSSURO                 Jake Noonan      $10

Bonnie Mac won well at the provincials and bought her form straight to Caulfield with a super win. Again a good ride from Hall. She camped just off  them and when they straightened it was pretty clear from early in the straight that nothing was able to go with her and she outsprinted them and won very well. Princess Narine did well running into second but and Sussuro worked home really well from the back. La Praline was disappointing.

Worth noting: Happy to follow the winner over the sprint trips.

You might think that the shorter the better for first up horses because fitness should be less important. This theory holds true for races under 1000m, but for other sprint races the market tends to factor that in so there isn’t a significant edge either way.

The appearance of JB Cummings in this list may surprise you considering his reputation as a very patient trainer, but again it comes down to perception. So many punters write off the chances of a Bart Cummings first-upper that they actually represent good value.

Now I will look at the trainers whose horses racing first up had the worst record from a punting perspective. Bear in mind that this is not necessarily the trainers fault, because (a) they don’t control the betting market; and (b) many trainers don’t want their horse to be at their very best first up because their main goal is further into their preparation and they would rather use a race or two to bring them to their peak.

Least profitable first-up trainers – Brian Guy (-43% profit on turnover), C Waller (-12%), D Weir (-14%), G Portelli (-18%), G Waterhouse (-19%), K Lees (-15%), M Moroney (-16%), M Kent (-20%), MW&J Hawkes (-22%), N Parnham (-17%), P Perry (-22%), P Moody (-12%), P Messara (-16%), P Snowden (-16%), R Griffiths (-34%), R Smerdon (-23%).

Even a casual punter would know that Moody, Hawkes, Snowden, Waller and Waterhouse are five of Australia’s most successful trainers throughout the last decade or two. The problem is that punters love these big names and back all of their runners, even when it’s very clear that having a horse at their peak first up is not part of their training stategy.

Quick summary

To succeed as a punter you must find value, which means that at times you will need to be a contrarian. You must have the courage and confidence to pull the trigger when you are getting overs, instead of just worrying about being on the Sportingbet market mover.

If you merely follow the herd you’ll run right over the cliff.

So here are three quick ‘takeaways’ to remember:
(1) Favourites that are first up have a far better record than those that have had a recent start, as do 2nd/ 3rd/ 4th /5th faves.

(2) Horses that have never won first up before have a much better record than those that have. This may sound counter-intuitive at first, but the fact is the market overbets proven first up performers.

(3) For a few good reasons to consider backing first uppers remember ‘FFF’: favourites, firm tracks and females.

The Turtles themselves entered markets on breakouts. For example, if a contract made a 55 day breakout (ie higher than at any time in the past 55 days), it was a buy. Similarly, if it broke to the downside they would sell. They were buying rising markets and selling falling markets….the age old wisdom of “buy low and sell high” turned on it’s head! The Turtles also used  a shorter term breakout system that operated over 20 days. Each turtle was allowed to use either system or both or any mixture of the two.

In terms of staking, the Turtles were taught about risk management and how much to risk on each trade. This was done by calculating the daily volatility in each market. Again it was a relatively simple calculation. Given this, it is perhaps surprising to note the differences in returns made in that first year by the Turtles. Jim Melnick produced an outstanding +102% in 1984, wheras Liz Cheval managed a loss of -21% over that same, initial 12 month period.

The story itself is a fascinating one and I cannot do it justice in such a short article, but the result was that Dennis was proven correct as a number of the Turtles went on to take their place among the most successful traders on Wall Street over the following three decades.

How does this relate to betting? My interest has always been in the utilisation of systematic, objective, non-discretionary applications (exactly as The Turtles were taught) to betting, whether it be horse-racing, sports or financials. As a boy, I was both fascinated and perplexed, in equal proportions, by The Sporting Life Naps Table. Each year less than 20% of the full-time racing journalists in the competition, ever managed a level stake profit, and, every year it was a different 20%! Their results looked completely random. The conclusion that screamed at me was that fundamental/subjective analysis of form (as practiced by virtually every racing journalist) was very difficult to profit from, and, individuals, over a lengthy period of time are just not suited to profiting from their own opinion.

Given this, why is fundamental/subjective analysis of form, going, distance, trainers, so popular? Because most people know no other way? Because we need to feed our ego (ie my opinion is superior to your opinion)? Because it seems the most logical thing to do? Probably it is a mixture of these reasons and maybe others that I have not considered.

Returning to the financial world where information is available 24/7 and is far more public than in sports betting, I researched the published results of the most successful funds. To eradicate luck and optimisation, I looked for exceptional performance over a lengthy period of time. I chose 20 years to cover bull and bear markets and a myriad of economic conditions. I settled on 20%+ pa average returns over the 20 years. Unsurprisingly, with the bar set so high, only 7 funds qualified.

Name of Fund                   Inception         Average Return   

Eckhardt Trading Co            1990                22.34%
Hawksbill                                  1988                22.11%
ECM Capital Man.                  1987                21.75%
MJ Walsh & Co                        1985                21.14%
Blenheim GL                            1986                22.06%
Tudor BVI Global                  1986                20.67%
Berkshire Hathaway             1965                20.30%

Of these 7 funds, 4 are systematic investing funds. The definition of systematic would be “rule based trading”. One of the others (Paul Jones Tudor) certainly uses a systematic approach, even if it is not strictly rule based. And, of course, Berkshire Hathaway is the investment vehicle of Warren Buffet! That more than half of this most exclusive league table is made up of systematic investing funds is even more remarkable when you know that less than 1% of all funds available worldwide operate on a systematic basis.

So, why does an objective approach achieve superior results to a subjective one? The major reason is Psychology. The brain isn’t the rational, calculating machine that we like to believe. Over it’s evolution it has developed many shortcuts, biases and downright bad habits. Some of these would have helped early humans (fight or flight etc), but they create problems for us today. In addition, some of the brain’s flaws may result from socialization rather than instinct, As a result of both nature and nurture, the brain can be a deceptive guide for rational decision making.

The brain’s inadequacies have been rigorously studied by social scientists. In my world of economics and investment, Behavioural Economists question the basic assumption of human beings as rational decision makers. They are correct to do so because the evidence is overwhelming. The insights presented here, primarily from the world of finance, are equally relevant to sports betting. Investments are no more than bets on the financial markets and sports bettors can learn plenty from the, more sophisticated, financial world.

OVERCONFIDENCE

Our brains are programmed to make us feel overconfident. This has been tested in numerous studies. For example, people were asked to guess the weight of a London Double Decker Bus, but rather than a precise figure, give a range within which they were 90% confident they had the correct answer. Time and again, they fell into the trap of quoting too narrow a range and thus missing the correct answer. Most of us are unwilling to reveal our ignorance by specifying a very wide range. We prefer to be precisely wrong than vaguely correct.
Overconfidence in our own abilities spills over into over-optimism. This can have dangerous consequences when developing strategies, as these are based on what may happen and, too often, an unrealistically precise and over-optimistic estimates of uncertainties.

MENTAL ACCOUNTING

This term was first coined by a pioneer of Behavioural Economics called Richard Thaler. He defined Mental Accounting as “the inclination to categorise and treat money differently, depending on where it comes from, where it is kept, and how it is spent.” For example, a gambler who loses his winnings, typically feels he hasn’t really lost anything, despite the fact he would have been richer had he stopped when he was ahead.

STATUS QUO BIAS

Nothing to do with Francis or Rick! In a classic experiment conducted by Samuelson and Zeckhouser, students were given a hypothetical inheritance. Some were given the inheritance in the form of a low risk profile portfolio, others were given it in the form of a high risk profile protfolio. Both sets showed a reluctance to change the allocation. The rational choice would have been to re-balance the portfolios, but the students largely chose not to change. The fear of changing comes from aversion to loss.

A similar bias is the Endowment Effect, which is an irrational desire to hang on to what you own. To demonstrate this, Thaler gave students a mug emblazoned with their University Logo. On average, the students demanded $5.25 before they would sell. However, students without the mug were only willing to pay $2.75 to acquire one.

Both the Status Quo Bias and the Endowment Effect make for poor decision making.

ANCHORING

A well known bias. Present the brain with a number and ask it to make an estimate of something completely unrelated, the estimate will be anchored by the original number.

The classic example of this is, write down the last 3 digits of your phone number. Now estimate the date that Genghis Khan died. Done that? Any correlation? Is your estimate of the date he died a 3 figure number? He died in 1227, but most will have estimated a year with just 3 digits!

Anchoring can be seen in price negotiations (buyer starts low, seller starts high), or advertising a retail price. Fund managers advertise past performance, and, despite the fact that there is very little correlation between past performance and future performance, it is anchored in the consumers mind.
Related to Anchoring is the need for really statistically robust numbers for predicting the future. A great example is Equities. Anyone looking at the 1980′s and 1990′s would have a double digit per annum return firmly anchored. But the noughties have brought a negative return! And the 60′s and 70′s returned a miserable 2%pa. Double digit returns have been achieved in only 4 of the past 13 decades. So beware of a mere 20 year track record!!

SUNK COST

Otherwise known as “throwing good money after bad”. Why do we do it? Loss aversion is the broad answer and the current trend for “kicking the can down the road” by the governments of the world is a classic example. Bailing out countries such as Greece (that can never repay their debts) is deemed preferable to accepting the inevitable loss today.

On a more personal level, you buy shares in ABC for £1, but the price falls to 70p….do you accept the loss? For most people, the answer is “no”, indeed Anchoring kicks in (ie you may sell if the price recovered to £1…despite the fact at £1 you originally felt the share was a buy).

HERDING INSTINCT

The desire to conform to the opinions and behaviour of others is a fundamental human trait and an accepted principle of psychology. We don’t mind being wrong, if everyone else is also wrong! To quote Warren Buffet, “as a group, lemmings may have a rotten image, but no individual lemming has ever received bad press”

For punters, the herding instinct is difficult to resist. Give yourself half a chance, and, stop reading the Racing Post!

FALSE CONSENSUS

The tendency to over-estimate the extent to which others share your views or beliefs. This happens for a number of reasons; Confirmation Bias is the tendency to seek out opinions and facts that support your own beliefs (readership of newspapers with a certain political bias is a good example). Selective Recall is the habit of only remembering facts and experiences that reinforce our assumptions. Biased Evaluation is the quick acceptance of evidence that supports your own hypothesis, whilst reserving rigorous analysis for any contrary opinion. Finally, Groupthink is the pressure to agree with others in team based cultures.

False Consensus is a very dangerous psychological trait, in either financial investments or betting.

An awareness of the brains flaws and psychological traits can be a major factor when attempting to be successful in any form of investment/betting. The human brain itself makes it unsuitable as a primary tool for financial analysis. Therefore attempting to profit from betting using a subjective approach, whilst emotionally satisfying when proven correct, is fraught with dangers and difficulties that can be circumvented if one adopts and maintains a 100% objective, rule based approach.

Russell Clarke is a long serving professional sports gambler and hedge fund manager. He runs the horse racing betting advisory service RCBetting contactable at rcbetting@gmail.com.

KOLONGA                       ANDREW MALLYON   1st     $13
ANNIVERSARY BELLE    DARREN GAUCI          2nd    $9
AFFABLE                        MARK ZAHRA              3rd    $4

Ellerton and Zahra have a good little you tube clip every Friday covering their runners and they gave this debut runner a pretty good push and it didn’t let them down. Kolonga was far too strong for them and won well. The favourite Frupper was well beaten and had a slip at the start and then copped a bump. He first win was pretty good so pay to be forgiving.

Worth noting: These races are hard as we have no idea what the unraced horses are like due to no trials.

Race 2.     1600M    echucamoama. com Handicap

STAR OF GISELLE              DAMIAN LANE      1st     $4.60F
KY’S THE LIMIT                   JAKE NOONAN     2nd    $5
SENSATIONAL REPORT     SALLY WYNNE      3rd    $7.50

Star Of Giselle made it a race to race double for Ellerton and Zahra. She surprised me a little with how well she ran out the mile and did a great job on the speed. It was a good ride by Lane who continues to improve. Ky’s The Limit did a good job to run into second, she should be ready to go and will be at her peak next run. Sensational Report continued a great run of form to get into third.

Worth noting:  Keeping a very close eye on Ky’s The Limit and fancy her if she can get a dry track.

Race 3.     1100M    Story Landscaping Handicap  

RUE MAPLE                 DAMIAN LANE           1st    $4.80
SILKSTONE SPECIAL   BEN KNOBEL            2nd    $20
DELABOMBELL            PETER MERTENS     3rd     $5

Rue Maple was given another great ride by Damian Lane and was too good for them. She hadn’t won for a while but had been racing against some good types. Silkstone Special continued her good form after a freshen, she is worth following wherever they go next over a suitable trip. Delabombell lost her claim when Stead was stuck in the airport and was three wide the trip and did well to run into third. Spartini was well backed but she didn’t run on and is probably looking for the paddock.

Worth noting: Rue Maple may just go on with it now and win a few races.

Race 4.     1200M    Vintage Photobooth Plate  

VAIN ATTRACTION     KATELYN MALLYON     1st     $5
CLASSY CHLOE        STEVEN KING              2nd    $3.20F
BONARIA                  CHAD SCHOFIELD        3rd     $16

Vain Attraction won well when she came through late at Moonee Valley and did the same here. The pace was good and Mallyon put in an excellent ride as she didn’t panic and got a bit of luck when the gaps all appeared at the right time for her. The horse let down really well. Classy Chloe and Bonaria did well for second and third. Paid close attention to Roxit who we had doubts on over 1200m. She did pretty well but should do even better if they drop her back to a shorter trip next start.

Worth noting: Follow Roxit and back her over 1000.

Race 5.     1400M    Cath White Memorial Handicap  

AMAH ROCK          JAKE NOONAN   1st     $6.50
SIR FERNANDO     GLEN BOSS        2nd    $2.90F
FAST AND FREE    STEVEN KING     3rd     $20

It was nice to find out at the end of the day that the race distances were published wrong (still are) and this was really a 1440m race. Livigno jumped well and led while Sir Fernando sat in behind the leaders. Before the turn Boss decided to round them up which probably cost the horse the race as the run he gave up was then given to the eventual winner Amah Rock. Amah Rock did well, thought he may have been half a run short but he certainly wasn’t.

Worth noting: The winner is worth following here Amah Rock.

Race 6.     1400M    7-Eleven Pink Ribbon Cup  

UTAH SAINTS     CHRIS SYMONS          1st     $15
DUSTY STAR      JAMES WINKS            2nd    $11
FREERETURN    ANDREW MALLYON    3rd     $5.50

Pago Rock is still looking for a run, he never seen daylight at any stage during the race. Probably be unders next time as he was stiff so be careful. Been up a while also. Liked the run of Freereturn at his first try at 1400m. Have a bit of time for this horse. Great ride C Symons on Utah Saints, the horse is a 1400m Caulfield specialist as is Dusty Star who did a good job for second.

Worth noting: Keep a close eye on Freereturn, he is still improving and will come right on from that run.

Race 7.     2000M    Eastern Bridge Plate  

ZABEELIONAIRE     JAKE NOONAN      1st     $4.60F
CHIEFTAIN JACK     JASON BENBOW   2nd     $15
CAMPEAO              DANNY NIKOLIC     3rd     $14

Last start Zabeelionaire had no luck early from the gate and Boss had to use the petrol tickets early and he was unable to show his turn of foot at the end. This time Noonan went straight back, rounded them up and won really well. He is a pretty good horse on his day but hard to catch. Chieftain Jack fought on pretty well, he continues to improve. Campeao also did well running into third, these will probably head to the SA Derby.

Worth noting: Hard not to like what Zabeelionaire did today, he is the one to follow here.

Race 8.     1100M    Visvanathan Memorial Plate  

STRATCOMBE         GLEN BOSS        1st     $4.20
WALTZES                DAMIAN LANE     2nd    $26
ALPHA PROXIMA     JAKE NOONAN    3rd     $13

Zedi Knight and Beyond Pardon were on the pace throughout and got off the rails on the home turn. In doing so they left enough room for Stratcombe to scoot through and put a couple of lengths on them as soon as the straightened. He has really come on this campaign Stratcombe. Curtana was wide and midfield and never really had much go right, I think Flemington down the straight would be a good chance to back her in suitable races. Waltzes did well late to burst through. Alpha Proxima did very well, he is going to get better over further.

Worth noting:  Alpha Proxima is bet at 1400, the run here suggest he is going very well, make sure you back him when he hits that trip.

In our recent Q&A recap we said that “Odds-on, look on” is just another punting myth that has no basis in fact.

We mentioned (yet again) that the favourite/longshot bias is alive and well; as a general rule longer priced horses should in fact be even longer and shorter priced horses should actually be shorter. Many punters are surprised to learn that their money will last longer backing favourites than any other segment of the market and that odds-on horses are the best performers of all.

But at least one reader wasn’t convinced:

Odds on look on a myth??!! You really have to be joking. The quickest way to the poor house and fatten the bookies is to bet odds on. Think Eddie the fireman for one. I really find it hard to comprehend a professional site as you claim to be can mislead punters this way. Gavin.

Well when someone like Gavin has believed something to be true their whole life, they are not easily persuaded to acknowledge that what they have been told as a fact is actually just a myth.

So let’s go through some irrefutable facts:

Favourites are clearly the most profitable market rank (or if you prefer to think of it the other way, they are the least unprofitable) as you will see from the results for the almost 47,000 races run at TAB meetings in the 2009-2011 period.

What will have happen to the bookmakers?

The major bookies will build the new tax into their product mix and look at different ways to develop incremental margin like promoting multis etc., but clearly the millions that they have invested into marketing racing in NSW will now be diverted into the other states and sport. They have been promoting racing in NSW with expensive TV commercials and adverts in the print media, but due to RNSW exclusive arrangement with their buddies at the TAB, the bookies have been banned at the track.

U.K. Betting power house, Bet365 is one of the world’s largest gambling sites and has been set up in North Sydney for almost six months now waiting on the High Court’s decision. We can expect an announcement shortly once they re-write their business plan.

The small to medium bookies will likely struggle to maintain a tax on turnover and it is known that not all bookies accrued the back payments with at least one high profile medium bookie not expected to be splashing out of expensive eggs this weekend.

Sportsbet Executive Chairman, Matt Tripp, who also founded Sportingbet Aust., expressed concern that last Fridays decision may lead to reduced income for racing.

“As has been proven by the increase in wagering turnover since the emergence of corporate bookmakers, competition stimulates choice and in turn drives growth and revenue to racing. Giving the TAB a walk-up start will hinder competition, and restrict growth which may harm revenues to Racing.” Tripp said.

“However, we will continue to provide competition to the TAB by providing our one million-plus customers with the best prices, the best range of products, and the best service in Australia. For every dollar staked, the TAB takes more than twice as much from punters as we do. This won’t change as a result of the court’s decision.”, he added.

“If product fees are pushed too high, it has the potential to reduce both competition and consumer choice, to reduce racing’s wagering appeal compared to sports, and ultimately some wagering operators may decide to relocate offshore.”

The 10 to 20 year window

The major benefactors from the court decision is racing’s “fat cats”, the big breeders and owners,  who can now buy and sell yearlings for more as the punters money will increase prize money.

“Things just got more expensive after Friday”, according to Sky Racing’s Ron Dufficy when asked if he will be buying at the sales.

Racing in NSW would have declined to prize money levels of the 60s had they been unsuccessful in court, and many observers are concerned that the industry should  never have been put in such a precarious position, especially when Racing Victoria are thriving under a gross profit strategy with bookies.

RNSW were on their financial knees when they were defeated in the initial court case almost three years ago by the corporate bookmakers, giving them a powerful bargaining position, but in the interests of the racing industry, the bookies agreed to allow RNSW access to the accrued funds of some $150m. The bookies could have played hard ball and withheld the funds pending the appeal which would have activated enormous pressure to negotiate a mutual early agreement. What RNSW do not know is that the major bookies would have passed on the funds even if they were successful in the High Court as a gesture of good will and to cement their position as a future long term strategic partner.

Sadly, a tax on bookies turnover as opposed to gross profit will make the NSW racing product less attractive and competitive, and long term the turnover tax will continue to reduce consumer investment and crowds at the track. As Matt Tripp correctly pointed out, “the emergence of corporate bookmakers has been a wonderful shot in the arm for punters” as they have a choice now and experience expanded markets that are more attractive to consumers stimulating interest levels that where not prevalent when the punter only had the TAB and SP Bookie.