The "Market"

[TAUTO]

I keep reading in the replies to the posts in these forums that the "market" is efficient, accurately reflects the chances of runners, etc. And it can be used as a tool to assess the winning chances.

Personally I reckon this is another racing Myth. Less than 30% Favourites win for a start. Hardly an impressive figure.

Stats show that on level stakes we lose on all runners at any odds you wish to nominate. On this basis alone, I don't accept that it is an efficient market.

As posters rightly point out there is no logic in this game and the market myth is just one of too many to mention.

[becareful]

Tauto,

Sorry but I have to disagree with you there. If you take into account the TAB take (around 15%) then the prices ON AVERAGE are quite a good indication of winning changes. For example around 50% of $1.80 starters win and around 10% of $8.50 runners win - once you adjust for the TAB take this is almost exactly what should happen. There is a slight bias in the market towards longshots (ie. short priced runners win slightly more often than their odds suggest whilst long priced runners win slightly less often than their odds suggest) but not enough to overcome the TAB take.

The fact that around 30% of favourites win is exactly what you would expect - given the average price is around $3.00. An efficient market does not imply that the favourite will win all the time - instead it means that the price of runners is a good indication of their winning chances.

This does not mean, of course, that ALL runners are priced correctly, merely that ON AVERAGE the market gets it right - the challenge is trying to work out when the market has got it wrong!

[GettingItRight]

I cannot agree.

(1) If you add up results accross the market for any odds range you must lose due to the fact that the market is set at greater than 100%. So if the market is efficient you will lose at all odds ranges and lose a similar amount accross all odds ranges.

(2) The fact that favorites win less than 30% of the time does not mean the market is inefficient. For the market to be efficient favoites must win more than second favorites and second favorites must win more than third favorites. This is true.

When looking at averages accross a large number of races the market is efficient. However an average says nothing about an individual event. And this is why it is possible for some punters to make money even though the market is efficient.

[osulldj]

T Auto,

Your definition of "efficient" a little skewed and Becareful has expertly explained just how the market is in fact efficient. It's about assessing the win rates against the probability as indicated by the prices....not that every favourite should win.

Gettingitright, your point that because the market is set to >100% means you will lose across all odds ranges is spot on. The loss is not exactly the ame though, as Becareful pointed out, because there is a favourite - longshot bias in our betting markets. You will lose less if you backed every even money favourite than you would if you backed every 2/1 shot, which would lose less than backing every 5/1 shot etc. This characteristics exists world wide and there are all sorts of theories to explain why, too detailed to discuss here.

It's also true that while the market is efficient on average across all races, there is natural variation to that, call it standard deviation if you like. The task of a punter is to identify the specific instances where the market is inefficient (the positive variations) and bet accordingly. In markets set to anything more than 100% it's the only possible way to win.

It's kind of ironic that this is the most logical of all winning principles but the one least understood by punters.

[puntz]

<font size=-1>[ This Message was edited by: puntz on 2003-08-15 13:19 ]</font>

It is a statistically proven fact that the first five in the market will win roughly 80% of all races.It makes no difference what market that is.....teletex,Tab,prepost or bookies,those figures will stand up.So how can anyone deem whether any of same are effecient,or not?Again,does it not boil down to opinion?If you can back your own opinion V market opinion and get it right on a regular basis,would you not have a winning edge?Personally,there is an angle I have had a lot of success with using the dreaded prepost market.Any race you consider bettable look at the horses on the first 5 LINES of betting....IGNORE the prices.Do the form study for all horses on those lines,which includes equals etc.If you have the knowledge and the skill to study the form,isolate your 2 main chances,and then look at their prices.If prices permit,I Dutch both,or in certain case I will back one and save on the other.Try it...you may just surprise yourself.

[shoto]

angel,
What do you use for the pre-post market - just the newspaper? In Brisbane on Saturdays we only hav one choice - the Courier Mail, which only has markets for Bris, Sydney & Melb. And days other than Sat. it's even more hopeless. Is there a better alternative?

[La Mer]

[quote]
On 2003-07-19 00:00, shoto wrote:
angel,
What do you use for the pre-post market - just the newspaper? In Brisbane on Saturdays we only hav one choice - the Courier Mail, which only has markets for Bris, Sydney & Melb. And days other than Sat. it's even more hopeless. Is there a better alternative?

La Mer: Go to: http://www.tabform.thewest.com.au/jspcontent/TFFrameset.jsp which has prices for all meetings every day. They are supplied by The Ratings Bureau. You will have to register but that costs nothing.

Also try; http://www.australianracing.com/ a US site that supplies information (on selected meetings) for Australian racing - very good site BTW. These prices are supplied by a very reputable company connected with Racing Victoria. Look for the Racing Info tab and Overnight Sheets.

<font size=-1>[ This Message was edited by: La Mer on 2003-07-19 11:51 ]</font>

<font size=-1>[ This Message was edited by: La Mer on 2003-07-19 11:51 ]</font>

<font size=-1>[ This Message was edited by: La Mer on 2003-07-19 19:49 ]</font>

[crash]

I would agree with Angel416 about pre-post markets.Sticking to the same p/p source is impotant, as markets all vary against each other and at some times, some will reflect the true state of affairs better than others, but overall,they will all pan out in the wash and come out about equal.

Chopping and changing p/p sources will upset the apple-cart [first 5 = 80% of winners]and usualy, not in our favour.

I believe S/P loses any true view of real value as it is set by the mob and our objective is to step outside the envelope heading for the "undelivered mail" bin.

After selecting 2 from 5 through competant form study, comes the hard part: bet or no bet? If either starts as favourite it's a no bet race, because we are looking for a combined overlay and one selection starting as favorite will usually produce a combined underlay.For this method to be profitable,a combined overall overlay is required. If true value, it's a no bet because we are trying to make a profit and this won't produce it.We will know when we are making all these decisions correctly because we will be " making a profit". This process for me, always seems to be in a constant state of ebb and flow.Knowing when NOT to bet and having the willpower to do so seems to be the crux of profitable punting.

[partypooper]

Crash, just had to applaud your observation that chopping and changing the source of P/P will upset the applecart (could). But I couldn't get anyone to agree, they ALL eckon it makes no difference!!!! But as far as Value is concerned I don't agree, to me 1/1 about a 4/5 chance is incredible value. presuming that you are ble to identify the 4/5 chance that is of course.

[crash]

I'd agree Partypooper,1/1 about a 4/5 is incredible odds, but only in hindsight after the race of course.Unaccountable variables assures that 1/1 is never a sane bet or you must embrace "any price a winner" logic [Your other name must be wind-up]
I think stats show one in four favorites win all races.ANY odds you accept below 4/1 puts your pot at risk statistically [only]. We can accept below this often because of known variables that can genuinely alter the stats,but even 2/1 in my opinion cannot allow for unknown variables,especialy personal error.You cannot be sure that your 4/5 judgement is correct before the race,can you? .Obviosly not or alternatively,you have become extreamely wealthy from your very astute judgements.

At what point odds become a no bet is a personal assesment of where we indevidualy set the unknown. For me it's 3/1 and I'd probably be better off at 4/1 as I'm sure most of us overestimate our ability.

[becareful]

Crash,

Last year I would have agreed with you, but now I would have to disagree. I suggest you have a look at the statistics on raw POT figures for bets on various odds ranges. For odds-on favourites (1.90 or less) the loss from backing EVERY runner at this price is only about 5% (using best available TAB odds or a product like DiviPlus) compared to the average 15% loss for all runners. Basically this is due to the "longshot" bias in the TAB and bookies markets so you actually have a much smaller disadvantage to overcome with odds-on runners than longer odds horses.

Now I am not suggesting that you should only back short priced horses but I certainly wouldn't disregard them - it is definetly possible to make a profit from them!

[crash]

The best way to win with odds on favorites is to never to bet on them and never bet against them.There are plenty of other races available that present better opportunities and value. Value and especialy overlay value, is what we are looking for, surely?
How do we find overlay value with very short priced odds, except with hindsight?

[Dr Pangloss]

crash

you have been offerred some very good advice which of course you are free to reject. In rejecting this advice consider for a moment that the point of the debate, market efficiency (longshot bias) has long been dealt within the sphere of academia. Some of these academic papers (using sophisticated statistical modelling) include:

Fabricand, "Horse Sense"
Snyder, "Horse Racing: Testing the Efficient Markets Model"
Ali, "Probability Estimates for Racetrack Betting"
Asch, Malkiel, Quandt "Racetrack Betting and Informed Behaviour"

You don't have to read all these papers to realise the market efficiency debate is over.

No one is claiming short priced horses offer profitable value on price alone. But looking for value in longer priced horses is not only futile, it is delusory - the mug punters Saturday afternoon fantasy.

[La Mer]

[quote]
On 2003-07-21 13:07, Dr Pangloss wrote:
crash - you have been offerred some very good advice which of course you are free to reject. In rejecting this advice consider for a moment that the point of the debate, market efficiency (longshot bias) has long been dealt within the sphere of academia.
You don't have to read all these papers to realise the market efficiency debate is over.

No one is claiming short priced horses offer profitable value on price alone. But looking for value in longer priced horses is not only futile, it is delusory - the mug punters Saturday afternoon fantasy.
***********************************

La Mer: Just to support what Dr. Pangloss and others have already stated, that is the further you get away from the favourite the more you are likely to lose - all the research over the years have indicated this, including more recent research in Australia.

For those that don't believe this to be the case, then the simple answer is to provide some proof, similar to what I've provided below which clearly indicates that the short end of the market is the area that needs to be concentrated on.

Odds On Shots: Strike-rate: 51.1% LOT: 4.1%
Evens to 9/1: Strike-rate: 16.1% LOT: 17.6%
(LOT equals Lose On Turnover)

and it only gets worse the longer the odds get.

[Neil]

Hi,

I've followed this discussion with a lot of interest. It is true that the bigger the odds, the bigger the loss on turnover backing all the selections at those odds.

So it's no surprise that the horses at long odds are the ones that the racing media tell us are value.

If you can find horses that are true odds on chances or just a little in the black (your assessment, not the market's), and get overlays on those selections you can do very well.

This is what the Pro-Punter Super Specials method is all about:

Identifying horses we assess with our own form methods as being very strong winning chances (odds on or a little in the black).
In this process we look at the race and the horses in the race. We pay no attention whatsoever to the prepost markets.

We've already obtained some phenomenal value since we introduced these selections on 21st. June. There has also only been one loser. Of course a 90% winning strike rate will not be maintained long term. But we're confident a very high strike rate will.

<font size=-1>[ This Message was edited by: Neil on 2003-07-21 16:43 ]</font>

[woof43]

The market can be used in other more exciting ways..instead of using strikerates, maybe it is far more wiser to add the probabilities of say every runner JockeyA rode then matched against his actual strikerate..this can be applied to any combination you like..Jockey/Dist Jockey/Trainer etc etc..

[crash]

"Who makes the odds" Dumb question says E.J. Minnis from practical punter. The "idiot" books take off like wild fire with those wanting to easily digest and understand information.
So who does make the odds? If we are refering to those availabe from the TAB operators,then they really are not odds at all-rather the dividends paid out in accordance with the winning tickets and collective value in the totalisator pools.
Leaving aside the TAB takeouts and other factors such as the rounding-down effect,if there was a win pool of $100,000 with $20,000 winning $1 tickets,then the dividend would be $5.
Simply put,the dividens paid out by by the tote opertators are determined by the punters themselves in accordance with how much [collectively] they invest on each race.

[Mr. Logic]

That's what racing's about. Different opinions. That's what a forum's about. Different opinions. You have not been personally rejected crash. Other posters are expressing their opinions just as you have been expressing yours.

[crash]

The last time I had a "Saterday afternoon fantasy" La Mer: it didn't include anything with four legs.
What your saying[academicaly] is that we are all wasting our time on the punt. So why arn't you butterfly collecting or somthing?
Those book writers makes their money selling books. The punt has nothing to do with writing books [poor sods].
What you say is true statisticly. But outside stats there is room to move because of non maths variables. Stats are maths mate and as we know they are great to a point but useless for prodicting a definative win.Just ask any pro punter. Statisticly there could'nt be any winning punters by your maths logic and there is no argument there.Outside stats is where we are at and you are obviously there or you wouldn't be here [ho ho lol].

[crash]

Well I thought my posts wern't getting through thats why the deletions. Should have gone to page TWO shouldn't have I !!!

Have to go with a ditto re what Neil has said.He definatly has the right track [lol]firmly in his sights.

However, I disagree to what he says about pre-post markets, though the way he has gone is good without them too. There are many roads to the same destination.

[crash]

My point of all this goes back to my "crux":When NOT to bet against the odds and win $$$. Not an easy task.



May the punting gods be good to you and travel on swift steeds. Crash

<font size=-1>[ This Message was edited by: crash on 2003-07-22 11:42 ]</font>