Dutch Backing Longshots
 

Back at the beginning of the year, when as a newbie on this forum looking for ideas on Laying for a profit, I hung on to the "coat tails" of Speedy and MG, following their every move laying neural longshots. Now the boys did reasonably well, but one thing that was always in the back of my mind, who in their "right mind" is on the opposite side of the Lay bets Backing these 100:1 shots? Surely they're never going to see a profit!
As I got more involved I started to see the blown out dividends the Layers were accepting compared with tote prices. Where's the value, not for the Layer that's for sure! So where is the value, of course on the Backers side of the equation.
Now Beton provided a spreadsheet awhile back of the % chances of winning in order of favourites based on the 1st favourites price. Taking an example of R5 Mackay yesterday. The BF Back prices read: $1.75, $7, $9.20, $11, $14.5, $44, $100. Now if you refer to Beton's chart for a $1.70 favourite the actual long term percentages of each favourite winning are: 50%, 19%, 10%, 7%, 5%, 4%,2%. So as we're looking for longshot value if we exclude the first 4 horses, that represent 84% winning chances, and Back the rest. Well that leaves a 16% probability that one of the last 3 horses will get up and win. If we Dutch Back these 3 horses for a 16% chance of winning what price could we get? $6 is fair value, happy with a $50 profit??
Well for a $100 stake we put $68 on the $14.50 horse, $22 on the next and $10 on the last. The $14.50 horse "Help Me Rhonda" gets up and you help yourself to a $886 profit!!
NOW I know why Backers support the longshot end of the market. Sounds great but could you withstand the run of outs max 43 races?
Cheers RP

Looked at trying to get this working many times Rinconpaul & if you want a good example of how well it can work, take a look at Caulfield R4 last Saturday, the winner ~ $180bfsp, with every other runner pretty much given a chance (go figure).

Just for kicks I ran the following for last week -

BFSP $20-$999
Tab/BFSP ratio <1.0
Dutch stake $50

results +$6639
6/05/2013 -$600.0
7/05/2013 $1,302.2
8/05/2013 -$493.8
9/05/2013 $535.6
10/05/2013 -$496.8
11/05/2013 $7,341.9
12/05/2013 -$950.0


money for jam?;)

Maybe Speedy and MG were on the right side!
I just looked at 90 races last Saturday. If you Dutch Backed the last horses representing 15% chance of winning, you would have had 8 smiles ($4,580), 82 accidents (-$8,200) for a nett loss of $3,620!
RP

Stugots, we have a big discrepancy, I rechecked Saturday the 11th and found only one more winner using your min $20 BFSP. Still shows a loss of $2,939.
The winners were:
Caulfield R1 $935
Caulfield R4 $756
Kembla Grange R7 $370
Morphetville R2 $494
Morphetville R5 $481
Rockhampton R1 $439
Rockhampton R6 $447
Rosehill R8 $428
Toowoomba R4 $711
A total of $5061 nett after stake taken out.
Less 80 losing races @ $100 = $8,000
Nett loss $2,939
I included Belmont, Carnarvon, Caulfield, Cranbourne, Darwin, Eagle Farm, Gold Coast, Kembla Grange, Morphetville, Rockhampton, Rosehill & Toowoomba. Maybe you only targetted metro races?
Can you check, because I would love to think you are right and I'm wrong!
Cheers RP

Could be differences in our SP figures as I have double checked with the same results - try

BFSP $25-$999
Tab/BFSP ratio <1.0
Dutch stake $50

6/05/2013 -$600.0
7/05/2013 $968.1
8/05/2013 -$493.8
9/05/2013 $642.1
10/05/2013 -$446.8
11/05/2013 $7,391.9
12/05/2013 -$950.0


The trouble with this is of course the runs of outs & big drawdowns - it's a bit 'all or nothing' & why I didnt keep following it way back when.

week ending may5th -$2134 :(

AHH!! I can see what's going on now. Because I'm dutching horses with chances totalling 15%, in Caulfield R4 I have dutched 3 horses with divs of $17, $19, $190 which results in a payout of $756.
You're dutching any horse $20 plus so there's only one horse in that race that qualifies and it's "Primitive Man" @ $190, so you get a payout of $1,600 for that race.
I'll go back over the other races now and recheck.
Cheers RP

Actually the full $50 would have been on Primative Man as I am betting the full stake each race

All good mate, $7,204 using BF Back prices less commission $6,736. But hang on this is for a $100 stake not $50? What's going on?
Cheers RP

Whoops!!
 

That's what happens when you get up at 3.00am, brains fried! That figure should be $18,900 plus the other wins equals $24,504 less commission = $22,911. less losses $8,000 = Nett profit of $14,911.
I'm booking my round the world trip NOW!!
Cheers RP