Regarding Class and Field Strength:

Absolutely right.

If a horse is engaged in a race with equal class horses it loses all class advantage and you must find other selection criteria.

The advantage is when YOU assess a horse to have a class advantage even though it's form "on paper" is not the best. If you can find horses whose runs are better than what they appear AND have a class advantage, usually you are able to achieve over it's true odds and therein lies the value.

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Treat your selection and staking methods not with optimism, nor with pessimism, but with realism.