When it comes to horseracing, most of us have been searching for a Holy Grail of sorts. That special system or approach that will lift us to the level we wish to attain.
Some of us have found ways to win at a modest level but nothing that one could call earth shattering. A handful of our number are winning and winning big. Those few make it look so easy. Ever wonder why it is so easy for them and so difficult for the rest of us?
Some players resist that question entirely and instead grasp a form of denial. “They are lying! I have no proof that they win at all,” they say. This is actually a translation from “I can't win and it is much more comfortable for me to believe that nobody wins than to face the fact that someone else is accomplishing what I have failed to achieve.”
Recently I had a conversation with someone who knows a winning player intimately. I mean he has known him for years. This winning player (with whom I am acquainted) makes a good living betting on horse races and he lives the lifestyle that is indicative of a man with a six-figure income. In spite of this, the friend says, “I've never actually seen proof that he is a winning player.”
I believe that the old “looks-like-a-duck” adage works here. So, my contention is that he is probably a winning player.
What is my point here? It’s that there really are winning players. They are capable of making reasonably large sums of money. Can we accept that? If we can't accept the fact that someone, anyone, is winning, then why would we think that we can win?
And, if that is the case, we need to ask ourselves, “Why are we playing this game?” I will assume, at this point, that you have mustered sufficient belief to accept the following statements as true: “I believe that there are winners out there.”
“I believe that some of them win large money at the races.”
“I believe that I am capable of winning large.”
If you can’t buy into this, then you should do one of three things:
- Find a way to reach this level of belief.
- Give up wagering.
- Learn to view racing as a losing proposition.
Okay, so we believe that we can win but the question is “How do we do it?” The logical place to start is to model the winners and do what they do. This is where the problems usually start. Someone (say US experts like Dick Schmidt or Jack Burkholder) tells or shows us how he does it. We watch for an hour or two. Maybe we even watch for a couple of days. They make it seem so easy. Then we go to the races ourselves and same result as before. No joy. This is when the doubt creeps back in. “You know, it was only a two-hour seminar. I don’t really know that he wins at all. After all, if he is a winner, why would he give his secrets away for just a few dollars? I know I wouldn't do that.”
You must chase that demon away and accept the real truth: He wins with that approach and you don’t! (Remember if it looks like a duck). If anything positive is to come from this experience it will come from asking the right questions.
For example, is there something I am doing differently? Well, of course there is! “He’s betting better horses than I am.” Wrong. Try again. The question you should ask is, “How is it possible that he wins with this system/method and I don't?” And that really is the $64,000 question. I cannot explain it. I have seen it over and over again. Something works for one person and simply does not work for another.
Take Jack Burkholder’s approach. He was kind enough to do an hour of precisely how he does it at a seminar a couple of years ago. He even gave me some private tutoring via the telephone. I tried it on paper and won 12per cent per wagered dollar. I couldn’t wait to try it. Then I went to the window with it and lost. Furthermore, the approach made me crazy. (For those of you that don't know, Jack’s approach is a multi-horse Dutch).
Do I believe that Jack’s approach works! Yes, I am absolutely convinced that it works for him. (Remember the duck.) But it is not for me.
Schmidt. He spent a couple of hours showing me his “Sheet-Like-Things” method. He said it was very close to systematic. (It may be to him, but it’s not to me.)
He said I could learn it with just a couple of hundred races. (I can see how it works, but after about 20 races I saw that it was just too artful for me.) Is it do-able? Yes, I believe it is. But not for me. So, I am two-for-two. Tutored personally by two winning players and it didn’t work for me. (If you are thinking, “They must not really be winning methods. After all I have no REAL proof,” go back and start reading this article again from the beginning.) See, there is a common thread here. “not for me.”
Okay, fine, so if this one isn’t for me, and that one isn’t for me, how do I find “mine?” Later on that aspect.
One last chance for the non-believers: If you absolutely feel that this whole article is hogwash, that one person’s approach should work for anyone, then life is very easy for you. All you need to do is begin interviewing horse players until you find one that is really winning and convince him (probably for some large amount of money) that he should teach you how it is done. It is reasonable to demand some form of proof that he really is a winning player. And bear in mind that the amount of money he charges is negligible in comparison to the money you will make at the window. And, if you believe the above paragraph, I believe you are missing the boat. So, how does one find a personal approach?
Before addressing that question, let’s make sure we are on the same page. First, we have established that you believe you are capable of winning, right? Second, we have established that there are people out there winning, right?
Third (this is new), the winners aren’t all using the same approach to the game. (This one is both obvious and easy.) Why aren't they all using the same approach?
James Quinn, a well-known, successful handicapper, uses a primarily class-based approach, although in recent years he “acknowledged” that pace was a viable tool.
Tom Brohamer, probably the most well-respected handicapper in America, uses a pace approach. The famous Andy Beyer is well-known for the speed numbers which carry his name. And obviously, his approach centres on how fast the horses can run. One could argue that these three approaches are in conflict. Why doesn’t Brohamer simply use Beyer’s approach or vice-versa? After all, one must be better than the other. Why don’t they simply decide to change to the “best” approach? That is because there is no “best” approach. There is only the "best approach for them.” Does this make sense? Okay, so how does one find their own "best approach?”
If someone asked me this question two months ago I would not have had a good answer. Now that I have found an “approach that works for me” it is crystal clear in my mind how it happened.
The credit has to go to two sources: Dick Schmidt and Steve Fierro.
In the past several months, Dick has spent time with me teaching me his methods of play. The SLTs (Sheet-Like-Things) are not my favourite, as they are the most artful thing he has done in a long time. His previous approach, which used the Reynolds Numbers and the Form Analysis in “DK ALL” (which stands for “Dick's Form, All Horses"), can probably be a winning approach for many people.
It worked marginally for me. (“Marginally” means that I did not see the kind of ROI that Dick got, but I did show a paper profit).
It is not his teaching, or his methods, which I am giving him credit for. Rather it is something that he said. Something simple, really. He said something like, “You need to work through a few hundred races one by one. Start by looking at the results first, and then look at how the approach works.”
He went on to explain that he knew looking at the results first “flies in the face of conventional wisdom” because that prevents it from being a legitimate test. That is because it is not really a test at all. It is about learning how to win down this particular path.
That was very profound! More profound than I believe Dick realised. I mulled this over for several weeks, whenever I thought about winning. Understand that I do not have an opportunity to concentrate on my own winning ways very often because about 97per cent of my time is spent writing software, doing tech support, etc.
Why was it profound? Because it is not the way I do things. I test, or I look at the “big picture.” I spend my time testing systems by trying something and measuring the performance of said system. Whether it is research through the database or click-click and record results, I am simply trying to verify that one scheme or another works.
Sure, I twist the dials and try this and that, but I NEVER look at races one at a time and question the individual race.
This is when it hit me that I had unlearned a lesson I once knew so well that I used to teach it to others. You see, I once was a winning player. (I define “winning player” as one who wins a “significant” amount of money. Let’s not quibble over the word significant here.) Now I am recreationally profitable but cannot justify the time I put into wagering. When I was a real winning player, I had a user that would call me every month around the 2nd or 3rd and say the same thing: “The program lost again this month, Dave.” It was always “the program” that lost. After about six months of this I said, “No, actually ‘the program’ did very well. I sold 40 copies this month and did just fine.”
The point I went on to make with this user was that he needed to take responsibility for his own results. “The program,” I said, “does not win or lose. You win or lose.” He simply re-worded his sentence and still missed my point. Anyway, I just could not believe that he was doing so poorly playing Southern California, my home circuit.
So, I challenged him to record the output of every pick made in the next month and send it to me before calling again. A month goes by. On the 4th of the next month I receive a handwritten note in the mail (Pre-email days, remember?) that says, “top pick: 34per cent winners, average odds 6/1.”
A couple of days later, I get the call. I start by congratulating him on a great month. He says, “Whaddya mean? I lost.”
I referenced his note and said “But you picked great horses.” “Well, I don't know,” he says, “but I lost money for the month.”
“How is this possible? Tell me about your wagering strategy.” He proceeds to tell me that he likes to bet low-priced horses because he feels more confident when the public agrees with him. In fact, when horses are over 5/1 he cuts the bet in half and horses over 9/1 he won’t play at all.
I said, “Are you telling me that you, essentially, have designed a system that manages to isolate the unprofitable part of the program’s picks?”
“I guess so,” he says.
My point here is that all he had to do was know how to bet the approach for profit and he was home free. (At least last month.) And, in this case, it was a simple set of records that would have told him that he was betting exactly opposite to how he should have been betting.
Had he been looking at these races, really looking at them, with the intention of improving his performance, he would have found this himself. By the way, he never did learn the lesson. I gave up on him completely when he told me later that he was trying to plug in the jockey’s date of birth in order to have the neural net understand biorhythms. So, the lesson from Schmidt is that one must be responsible for understanding how to win. I know we all SAY that we are responsible, but most of us are not really. We are more comfortable saying “the system lost” or the “program just doesn't pick winners” than we are saying, “I have to find a way to win with this.”
How do we do this?
So, how do we take responsibility? Let me tell you how it worked for me. I began with a system to test, a notepad file and a commitment to handicap 50 races without making a single change from my “system.”
As I handicapped each race, I logged the results in notepad. But I also opened a second notepad file. I called it the “mistakes” file.
You know how, as you go through races, that a horse that you “almost had” nags at you? Well, those “nags” (pun intended) are the key to making your system work.
Let’s say that I am using a contender ranking approach, using the top 4. Imagine that a horse comes along that pays $18 and ranks 5th. I work through different system scenarios until I find one that would make him a winner.
So, let’s say that I notice that if I could have made him a contender he would have become a play. I ask the question, “How would I have to modify my system to make this horse a contender?” The answer goes into “mistakes.txt” along with the race info. The entry might look like: Cont: Prime 3 Raw- top 4, which is a simple note telling me I could have gotten this horse if I had used Prime3 Raw as a contender selector instead of Prime3 Rank.
After a while my notepad has grown to a list of common “mistakes.” These mistakes contain the seeds of improving my approach. After 50 races, I made the new changes and tested against another set of 50 races. The new “mistakes” file contained new improvement ideas.
The process continues until such time as it appears the system meets your needs. Understand that this will not be found in bet records because you do not know the winner before the race is run. It will not be found in database analysis because it is on too high a level.
It must be done with the results available before you handicap the race. You are trying to find a reason why the winners could become plays. And don’t waste your time fishing for horses that are ranked 9th in a 10-horse field. Those are pipe dreams (for your approach).
Concentrate, instead, on those horses you are “just missing.” If the winner wasn't a contender, what strategy would you have to implement to make him one? If he was a contender, what strategy change would have made him a play? Ultimately, my notepad file became two columns, one for contender “mistakes” and one for “selection” mistakes. By the way, if I can make the winner a contender but not get him as a play, I still put in the contender error, but I mark it with an asterisk “*”. These potential changes have less value than one where I can actually get the winner.
So, where does Steve Fierro fit into this equation? A few months ago I read Steve Fierro’s book, The Four Quarters of Horse Investing. At first reading, it did not impress me much as something that I could use because I don’t normally make an odds line. In December, I wanted to try something new that I hadn’t done before, so I decided to give his approach a try. In a nutshell, Fierro’s approach is to help you make an odds line by offering a template system. (i.e. If the top horse is 3/1, then there are just so many choices to the 2nd pick, and even less choices for the 3rd pick. I began testing Fierro’s templates using my software’s odds line. I quickly learned that his approach was do-able and likely profitable. It was not the templates that struck me as great near as much as it was the “filters,” as he calls them. These are the races he passes because (this is important) his records have told him to.
First I applied his “filters” to my play and immediately I saw an improvement. And I mean a significant improvement. Like tripling the ROI from 8per cent to around 22per cent. Specifically, I learned that when there is a low-priced favourite in the race that deserves to be low-priced, I get clobbered. (Steve calls them “PLFs” or “Pass Legitimate Favorite” races.) So, from Steve I learned two things... We all know the first one... We must have a way to determine value in a race. (Whether it is by odds line or spot play, either of those are value oriented approaches.) But the second one is a little tougher for most of us. We must have a structured way of determining which races we are likely to produce profit in and which not. Do we beat short fields? Do we beat races with low-priced favourites? Most of us simply do not know. I know I did not but I will.
Dave Schwartz has been a developer of artificial intelligence horse racing software for over 15 years. His flagship product, The HorseStreet Handicapper, is probably used by more professional level players than any other such software. He has written manuscripts on money management, most notably Horse Market Investing and The Opponent Method. Annually he publishes the HorseStreet Par Times, recognised as the standard for track to track adjustments in North America. The website is: https://pacemakestherace.com/
Click here to read Part 2.
By David Schwartz
PRACTICAL PUNTING - JUNE 2005