Good point. Maybe in horses the mugs look for the big payoff more than the 'sure thing'. I can really only offer an informed opinion on sports.

"attract the mug punter, doesn't it make sense that it's more likely value is on the other side?"

This is my main point to Mo. Look at the exact opposite of what the mug punter is likely to bet, and more often than not that's where the value is (if there is value to be had).

"Look at home dogs, home faves and away dogs. Stay away from away faves."

I said this because there are quite a few subsets where favourites are a good bet (like you pointed out), but they are much more likely to be a home fave than an away fave.

Each sport obviously has to be looked at seperately though, eg:
away dogs in MLB
home dogs in nfl
all dogs in NRL
home teams in AFL