I am often told to look for value, how do I find it if I don't know what I am looking for. Help Please

Hi amateur,

The word value is thrown around quiet a lot on this forum - but for good reason.

Many punters probably have a different interpretation of value than me, and I know many journalists and race callers do!

However, if you constantly get poor value - often referred to as "unders" (or under a horse's true odds or chances of winning), there is NO way for the punter to come out in front in the longrun.

If you are able to obtain value - often referred to as "overs" (or over the true odds or chances of a horse winning), then unless you have a radical staking plan, you have to WIN in the longrun.

The trick is how to find value - how to correctly rate a horses true odds. Some people use weight ratings, others speed , others form or class and then there are those who are able to combine all of the above.
It takes years of hard work, trial and error to know whether you have correctly assessed the odds or chances.
You'll know instinctively what is value and what is not after you've got it right and are showing a level stakes profit over a decent period of time.

Hope this explains it a little better.

If there is one answer to the question "how do I win at the races" is certainly is that you have to find "Value".

EI is right that assessing value is more of an instinctive thing after you have been at the game for a number of years...previously I used to rely on an automated pricing methodology to tell me the price a horse should be and I trusted it without question. That was a mistake in many respect. These days I just know when a horse is good or bad value, based on my knowledge of the horse, race and competitors.

Running a rating process with a pricing formula and then backing a horse because your prices says $4 and the market says $4.50 is not "getting value". On average, the starting market is the most accurate predictor of chances...no one punter can assess winning chances across all races better than the market....1/1 SP horses win more than 5/4 horses who win more than 5/2 horses and so on.

The fact that markets are set to well over 100% means however that 1/1 chances don't win the 50% of the times they should, they win about 43-44% of the time and the same can be said for other prices. One thing however that our SP markets have a long shot bias, what I mean by that is that the longer the price, the greater the gap between the implied win rate from the odds and the actual win rate.

Anyway, back to the topic of value. Value is not about crunching the numbers and betting the overlays because your pricing methodology has a horse a bit shorter than the market. You will lose that way.

You need to understand the context of a race and identify where the opportunities for value are and why. You need to pick the races where you are confident the market has assessed the chances wrong.

I am always on the lookout for circumstances which could open for me a window of value opportunity.

Some of my favourites are:

* Horses I see or here hyped in the media on the day before or morning of a race, especially if trained by leading trainers. If I haven't already I immediately look at that race to see if there are reasons I can be confident that horse has a poor chance of winning. The hype ensures it will start shorter than its true chance and if I can pot it and find one or more runners to win then I may have a value situation.

Ugachaka trained by Lee Freedman was always one of my favourites...constantly hyped as one of the best fillies in Australia yet she was really nothing more than an inconsistent wet tracker. I loved when she was entered for a race because I knew I could take her on nearly all the time.

* Horses that finish close to another runner but when they compete next time there is a huge difference in price between them. The Oaks was a classic example where I gave Bulla Borghese as a top rated selection to Pace Advantage subscribers. She had been finishing basically equal with the likes of Lashed, Macedon Lady etc. in lead up races yet was starting double the price.

There are many other examples and I strongly encourage anyone serious about developing their "value finding" skills to spend time and develop a list of the types of value opportunities that can crop up (like those I mentioned)

When you are aware of the possible circumstances that can lead to value they are much easier to find.

Does anyone else have situations they that trigger in their mind when the opportunity to find value may be present?

Double overlays!

I agree with you osulldj in part. Your price $4.00 obtainable price $4.50 is not much of an overlay and certainly no room for slight error or profit in the longrun.

I think that you can automate things to a degree, but have to use judgement after you come up with the contenders.

You did say however, that the SP market is usually right, and I have to disagree there.
I find huge differences in what I select and the market in general.
Many times my favourite is the same, but usually the second third and fourth rated are not in the market at all and usually either run a place more often than not, or sometimes win at great odds, I might have rated them at 7/1 or shorter.
I love when I see the second or third favs not even in my top 5!!!
:wink:
That's value.

[ This Message was edited by: Equine Investor on 2002-12-05 18:06 ]

EI,

I take your point and its always nice to find those races where your assessment is different to the market and you turn out to be right.

However I am telling you without doubt (i've done the numbers over more than a hundred thousand horses) that "across all races", the SP market is an extremely accurate predictor of winning chances. If you plot the implied win rate of the starting price and the actual win rate based on ever horse that started at that price, then the curves are exactly the same shape. Of course there is a gap between the two lines because even money chances dont quite win 50% of the time, 2/1 chances don't quite win 33% of the time. There is always a couple of % gap and thats why racing is a negative sums game.

However the fact that I say "on average across all races" the market is the most accurate, means that there must be standard deviation in that average....where the market has it assessed wrong, and thats our chance to be right and make some money.

Good topic!

"....our SP markets have a long shot bias."

quote from osulldj.

I have touched on this topic previously - studies throughout the world confirm the efficiency of the SP market as a predictor of horse races. Long shots are over bet in every country except Hong Kong.

Consequently, to break even on horses starting at say 5/4 the punter needs only to obtain 6/4. BUT as the SP gets longer the more difficult it becomes to obtain the break even odds BECAUSE of the aforementioned long shot bias. Hence you need 80/1 about a horse with a SP of 40/1.

Since top fluctuation is readily available from various bookmakers one might argue that the punter should confine his betting activity to the more fertile (and profitable)ground where runners start at the shorter odds.

The formula of top fluctuation PLUS the SP market efficiency will yield results far more sympathetic to the punters wallet than vain attempts to snare longer priced winners that rarely (disproportionately) salute.

Or so the theory goes.

I cannot agree again.
Does this mean if I can obtain 6/4 somewhere about a 5/4 SP chance I'll come out ahead?
I could easily obtain that price shopping around to the death knock - I can assure you I would not come out ahead.
If I rate a horse at 10/1 I would only need 20/1 to be a double overlay - an SP of 40/1 is a gift, and all I need is one 80/1 shot to win for the year (rated 10/1 by me) and I can holiday for the rest of the time.

But it doesn't work that easily.

It's not what odds you can get over SP price, it's what odds you can get over the correct price.

While what osulldj says rings true to a certain extent about SP being a good guide - it is not accurate.
If it were, nobody would be getting overlays betting SP - and I know many that do.

It's not the number of 4/1 chances that win races - it's the number of 4/1 runners to race winners ratio you have to consider, otherwise the whole thing goes pearshaped.


[ This Message was edited by: Equine Investor on 2002-12-05 22:38 ]

EI

Consider a sample of 1,000 Saturday metro races where the favourite returned a SP of EVEN money.

How many of those 1,000 races would the favourite win?

If the answer is 500 then the punter would need to secure EVENS to break even.

If the answer is 450 then 5/4 are the break even odds.

If the answer is 400 then 6/4 are the break even odds.

What is your answer?

Over a sample of 1,000 Saturday Metro meetings I would expect 493 EVEN money favourites to win based on past results.

So you would need a price of at least $2.03 (roughly) just to break even.

And I know you'll say that you only bet when you can obtain BETTER than evens - that's fine in principle, but do you have stats on horses that top fluctuation or likewise is better than evens?
Could possibly be that their stike rate is worse.
Even betting top fluctuation, only in a small amount of cases would you get a reasonable return, most cases you would probably get just evens.
Which makes it a bad bet whichever way you look at it.
The number of times you could get skinny overs on an even money chance would be outnumbered by the number of times you get evens.

In this example there would hypothetically be one even money chance in the race, but say at 4/1 6/1 etc there can be multiple runners which distorts the actual win ratio.

So you can have for example:

438 winners out of 1910 races which gives a percentage of 22.69%

BUT

438 winners out of 6318 runners which gives a win percentage of 6.93%

(Just a hypothetical example)

So you can see that the results are misleading.

I see where your coming from here, but if you use statistics it has to be broken down completely to give a correct indication.

Straight from left field, who knows what the SP is going to be, before they jump?, answer...nobody. So trying to base anything on SP is futile. Over the years I have seen many horses that would appear set to start at say 6/4, return 7/4 or 2/1 because of a late blow, ie bookies trying to lay it, or something being heavily backed when half the runners are in the gates. And a lot of the time SP's are not really that accurate.

I have to go along with this idea of the SP market being correct.
I saw some figures the other day on an English racing website that showed the 1st SP fav to win the most ,around 33%.
The second SP fav was the second most winning horse, the 3rd SP fav the third most etc...

On top of this, the 2nd SP fav also came second the most, the 3rd SP fav came third the most etc...

and this was over a large volume of races.

Clearly the SP market gets it right, and if you look at it logically of course it should.

You and I risk little when we have a bet.
Bookies risk their livelihoods and have been doing this for eons.

They have to get it right - within the confines of the sport. Obviously they cant pick every winner because every race is influenced by good and bad luck and a host of other effects etc...but they will have studied the market far more expertly than we will have.
Then they must consider one more thing - the likely actions of the public. A bookie will know that horse A will attract more interest than it should from the public so he will adjust his price to compensate but otherwise the numbers prove he gets it right.

This doesnt mean that we cant make money.
He takes bets on every race and has to win - we dont.
We can be selective and bet on only certain races thereby increasing our chances of success.
The bookie also takes bets on races where they are all donkeys and someone has to be the favourite - we dont have to bet on that.

Even betting only on favourites we can win by being selective.

But my conclusion after looking at the stats is that the bookie is the best analyst of form because he must be.

Our job is to use his form to pick the right races to go with.
In some ways this is where the "value" seekers are sort of correct.
The best horse in the field may be A, the public have a love affair with B so the bookie has to adjust B's price making A a better bet.
The other avenue of value seeking is of course to use the bookies form as gospel and then look at the prices on offer at the TAB.
If the TAB users decide to ignore the bookies favourite you might pick up an inflated price on a good runner.

If the argument is that the SP is the most correct form assessor - then I agree.

-------------
and whilst on the issue of value, I suppose the other obvious area of value seeking lies in place bets where there is a huge favourite dominating the market and this tends to leave the other horses/dogs around the $2 mark.
The public seem to forget that regardless of how good the first horse or dog may be, someone has to come second or third and often there arent too many legitimate candidates left for those positions.

Its a wonderful topic...

see ya
Every TOpic

I am not disputing the win ratios of every particular SP price, I am merely trying to point out that the value lies where the market is wrong according to your price assessment.
I could give hundreds of examples of horses I rated second or third favourite which won at odds of 10/1 etc.
Therefore according to my ratings, the SP was in fact wrong.
If only 10% of say 6/1 shots win (again hypothetical here). You could conclude that to break square if the market is right, that 14.28% of 6/1 shots should win.
Therefore 4.28% of the time the market is wrong.
I just look at it from a different angle.

Examples:

Fearless Sophie - rated favourite by me - won $6.90
(was second in the market).

Sandbelt - rated 3rd fave - won $9.70
(was sixth in the market).

Raja Lane - rated second fave - won $6.00
(was fourth pick in the market).

Just some examples of how I believed the market was wrong and it paid off.

Anyhow I agree it's a great topic sparking healthy debate.
Well done amateur.
:wink:

I am humbled into embarrassment by the obvious expertise of the other "posters" but would like to ask if it considered that the SP (already established as the best pointer to a horses chance of winning) is arrived at because of the bookies skill, or because of the weight of "money" ???????

The SP is a reflection of the corporate wisdom of all market participants.

As stated earlier, Australian markets have a long shot bias. The SP market is LESS efficient in capturing the real chances of runners starting at longer odds.

The SP market is MORE efficient in capturing the real chances of shorter priced runners.

(QUOTE)The SP is a reflection of the corporate wisdom of all market participants.

so for little ol' me to aquire a price greater than a horses real chance, from the very people resonsible for that "corpoate wisdom ", must be pretty well darn near impossible??

value is blevvo which won two listed races in a row and then starts at $18
or double jewel which won a couple of weeks ago and then paid $18 yesterday.
winning form at $18 is value

How about BAD value:

Surely Sir Breakfast was the biggest joke of a price in a long time and unbelievably firmed even further.

Blevo and Double Jewel eh, wish I'd read your post b4 the race!! what were the bookies offering these two? as I presume SP is based on Bookies "Starting Price" not tote odds

I have a bigger joke for you.....

The TAB price of Hardrada at the jump was $2.00 in a field of very classy horses, and many with better records and recent form.

About half an hour before the race it was showing $1.30 !!!!

Goes to show that poor value always is readily available, but it takes hard work and dedication to find good value.