Hi there one and all,

I found these principles on the investopedia.com website and found them quite poignant in relation to horse racing investments.

Something to ponder as we enter a New Year, fresh and raring to go!!

Principle No.1: Always Invest with a Margin of Safety
Margin of safety is the principle of buying a security at a significant discount to its intrinsic value.

This statement is true for laying and basically we do the opposite for backing. Find the commodity at the best price.

Principle No.2: Expect Volatility and Profit from It
Because the stock market has these same emotions, the lesson here is that you shouldn't let Mr. Market's views dictate your own emotions, or worse, lead you in your investment decisions. Instead, you should form your own estimates of the business's value based on a sound and rational examination of the facts.

I find the same applies to horse racing markets as often the general market gets swept up in the excitement and hooha surrounding a particular new 'champion' or today's 'good thing'.

Principle No.3: Know What Kind of Investor You Are
You only have two real choices: The first is to make a serious commitment in time and energy to become a good investor who equates the quality and amount of hands-on research with the expected return. If this isn't your cup of tea, then be content to get a passive, and possibly lower, return but with much less time and work.

I believe understanding your comfortable level of risk is really important. I have a blend of low strike rate/high strike rate value strategies to ensure that my runs of outs are manageable.

I hope you find this interesting and something to get the brain juices flowing in the New Year. I'm really looking forward to it and thank everyone for their contributions this year, as I simply LOVE THIS GAME and extrapolating new angles to investigate.

HAPPY NEW YEAR!!!

The Schmile

Read more: http://www.investopedia.com/article...p#ixzz1i48rSCUc

__________________
The Schmile

"I buy when other people are selling.”
― J. Paul Getty