How good is the public in assessing the chances of each horse in a race? Well, as we’ve pointed out before, pretty darn good.
James Quinn, the US writer, says the “crowd” will lose generally only 9 per cent of the money they’d invest on favourites. Yet, he adds, a group of experts, no matter how good they might be individually, will lose some 15 per cent, assuming they perform at their best and play every race.
Quinn says: “Actually the experts’ 15 per cent loss would mean they estimated the real winning probabilities of horses exceedingly well, losing merely the house take. Yet the public, a crowd that includes those little old ladies from Pasadena, their intuition and hatpins and all the rest, estimates horses’ actual chances so mysteriously well it loses less than 10 per cent and has outperformed every public selector in the history of the sport.”
Bearing this in mind, how do we find a way of cashing in on the favourites to turn around that 9 per cent loss and make it into a profit?
Well, according to some experts, here’s where Maximum Confusion comes into play.
The principle, says Quinn in his best-seller The Best Of Thoroughbred Handicapping, derives from the proposition that the betting public achieves its time-honoured 9 per cent loss on favourites by OVERBETTING some of them and UNDERBETTING others.
Burton Fabricand points to the existence of races where the crowd underestimates the favourite’s true probability of winning by more than 9 per cent; that is, enough to turn loss into gain.
“The underestimated favourite presents handicappers with the only kind of favourable bet, a true overlay,” says Quinn. “Opposed to the underestimated kind is the overbet favourite, the kind that counterbalances the books into the 9 per cent loss. The handicapper’s task is to distinguish profitable favourites from the others.”
Enter the Principle of Maximum Confusion. This theory holds that the public is most likely to underestimate the true winning probabilities of favourites in races where the past-performance record of the favourites is highly similar to one or more other runners.
The public, then, is confused. The race is wide open and the horse that is eventually sent out the favourite is at a FALSE high price. It is underbet.
Quinn writes: “As to the converse of this circumstance, where one horse looks superior in every fundamental respect, it is certain the outstanding record will not be lost on the betting public. This kind is regularly favoured by form players, public selectors, and experts, such that few would argue the horse does not deserve to be favoured, but whether it should be bet.”
Fabricand’s answer, says Quinn, is a resounding NO. Why? Because the horse looks so obvious to all, it will almost certainly be overbet, or at least properly bet. No chance for profits long-haul. Fat chance for losses of at least 9 per cent!
How might punters, then, apply the Principle of Maximum Confusion and thus assure themselves of a 10 per cent profit?
Quinn explains: “The trick is to recognise those races where the favourite is so similar to other contenders that the public gets very confused. Fabricand supplies handicappers with seven rules comprising the definition of similarity, as well as the probability formulae for applying the betting methods.”
The following is what Quinn calls a simplified version of the definition rules.
To wit, the favourite is similar to another horse if:
- Both show a race within the past 29 days;
- Both have raced at today’s track, or neither has; and
- The favourite’s last race was at a class level equal to or lower than the similar horse’s;
- There is less than a 4.5kg weight shift between the two horses off their latest races;
- Both are male, or the favourite is female;
- Both last-race finishes were the same, greatly similar, or the favourite’s last start was slightly inferior to the other horse’s;
- For sprints, the favourite is a sprinter (no longer races shown in form); for distances, the favourite is a distance runner (last three races over distances) or a sprinter that won its last race.
Fabricand maintains that all seven rules must be satisfied.
Quinn adds: “Handicappers that have isolated betting favourites that are similar to other horses in the field can fairly assume the public has been maximally confused. They can therefore presume the favourite will be underbet, and proceed to bet on it.
“To check the validity of their assumptions, they can use a precious normative measure and that is their own personal past performance with the principle. Allow a distribution of 30 bets. The criterion of success is upward of 10 per cent profit.”
Boiled down, then, the Fabricand Principle of Maximum Confusion is when a race is closely contested, and when the favourite’s claims to be favourite are in the betting public’s view almost matched by another runner, or runners.
You are seeking the real overlay favourites. A favourite may be 6/4 when it should be evens. Or it could be available at 3/1 when it should be 2/1 and so on.
Quinn writes in his book: “If the Principle of Maximum Confusion does not work well enough as applied by individual handicappers, the normative approach will reveal that at small cost. These handicappers can abandon the principle and return to the normal routine. Even in the worst of scenarios, practice with the principle might prove beneficial. Its application will reverse a greatly unfortunate tendency.
“Handicappers have long relished the overbet favourite. They anticipate the overlay elsewhere, if not so successfully. Much less enthusiasm is held toward underbet favourites.”
Quinn says many handicappers would benefit by changing tactics. They could concentrate on the underestimated favourites.
He adds: “When favourites are highly similar to non-favourites, as Fabricand tells, the crowd will be uncharacteristically confused, and handicappers benefit by backing the nervous public choices.
“The Principle of Maximum Confusion will be on their side. It assures they will be betting a series of true overlays, and this without the customary demand for full-dress handicapping.”
Quinn and Fabricand make a lot of sense but what it all basically means is that you, the punter, has to decide which favourites are being sent off as overlays and which are underlays.
In the long run, if you’re right enough times, you will emerge with an annual profit, probably around 10 per cent. What you would have done is to beat the usual 9 per cent loss by NOT backing underlay favourites but backing those which the crowd have allowed to be sent off at a greater price than they should have been.
Fabricand’s rules are at least some sort of guide for you. You may be able to take them a step further by adding more rules.
I think it’s pretty safe to say that if a race comes down to a couple of strong chances with similar form, then you can rest assured the public will be in some state of confusion as to which one to back. You may well think that one of the two is the better chance, even though the public is confused.
Eventually one of the horses will be sent out favourite and it’s very likely it will be at an overlay price, due to the public confusion. This is where Fabricand’s principle comes into play.
Find enough of these winning favourites and you can win over the year. These horses will win enough times at the overlay price to give you an edge.
Quinn is right, though, when he says you must test yourself in applying the principle. Try out his 30 bets test. See how you go. Are you finding the winning overlays or not? Maybe try another 30 after that. Satisfy yourself you have done what you can to apply the idea. If it hasn’t worked out, well, toss the idea away and forget about it. But if it has worked over, say, 60 bets then you have latched on to something that could be just what you need for a long-term profit attack.
The idea won’t suit everyone. It takes some discipline and some hard work, plus intuitive reasoning, to get to grips with it. You’ll need to know your form, and you’ll need to be able to spot the races in which you can sense the public confusion.
Check the form of the serious contenders. See what happens in the betting. Once the favourite is clear then you could be onto the overlay. The horse should have been a clear pick but the public got confused because of the claims of the other serious contender, or contenders.
It made a horse favourite but its “probability” reckoning was off. Instead of 2/1, the favourite goes off at 3/1. OVERLAY!
James Quinn’s book The Best of Thoroughbred Handicapping (316 pages) is available from bookshops on the Internet. Try www.drf.com or www.gamblersbook.com.
By Damien Whitchurch
PRACTICAL PUNTING - JANUARY 2005