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.