Joe Takach has emerged as America’s leading authority on the body language of racehorses.

Joe’s Beat the Beam video (one of the best-selling horseracing videos of all time) is highly regarded and timely for those of us who, more and more, must observe races through the eye of a TV camera.

Joe is also the author of seven handicapping books on the "physical readiness" of racehorses and has been a guest speaker at the last three Handicapping Expos in Las Vegas. He and his staff have published Southern California Horses To Watch since 1993.

Upside risk and downside risk are terms that I’ve thrown around for years. But we need a working definition of both "upside" and "downside" risk before going any further.

I’m going to keep it real simple. We’d all agree that gambling involves a degree of "risk" because, if it didn’t, gambling wouldn’t be called "gambling", it would be called "banking". Why would it be called banking? Because in banking there is the guarantee of a return whereas gambling can make no promises of any kind.

Downside risk means that there is a much greater likelihood of losing than winning. This is not to say that one would never bet a horse with all downside risk. If the odds were right, a horse with nothing but downside risk might be worth a bet depending on your past personal success record with similar downside risk wagers.

Upside risk means that there is more of a likelihood of cashing a ticket than with downside risk, but with the full understanding that there are never any guarantees that your mutuel ticket is a winning one.

As you can see from the simplistic definitions of these terms, they are open to wide and varied interpretations.
In offering my opinions on both, I’m not looking to do battle with other handicappers over the correctness of my interpretations. They work for me in my personal methodology and that’s all that matters to me. Additionally, I’m positively not attempting to super-impose my thoughts over others or change their inter­pretations of upside risk versus downside risk.

What follows is nothing more than my opinion. And face facts, opinion is what drives our great game.
Okay, what makes a wager either upside risk or downside risk through the eyes of Takach? That’s an easy question to ask. But in answer, it requires very careful analysis of many specific situations and interrelated factors in any given race.

Every race is a very unique event that will only occur once!

That statement forces a quick diversion.

I continue to get a good laugh from the know-it-all professional authors in our game who claim to have the "inside" on exactly "how to wager". Some go so far as to say that even if their readers are only mediocre handicappers, their time-proven money methodology will take them out of the red and into the black. All a reader has to do is follow their impeccable money management techniques based on what they deem as "value". To them, a horse is allegedly offering "value" when its odds are greater than they should be.

And how do these professional authors know exactly when the odds are more than they should be? They tell their readers that the way to determine the fair odds of any runner is to ask themselves a simple question something like this: "If this race were run 100 times, how many times could you expect this horse to actually win?".

There is no correct answer to that question, so don’t waste your time trying to answer it. Why can’t you answer the question, you ask?

It’s simply because their basic premise is incorrect. The fact that they would even imply that any one race could be run 100 times, only speaks to their ignorance.

No race is run exactly the same way twice, let alone 100 times!

Something is always changing – weather, post positions, jockeys, trainers, track maintenance, trip, track bias, physical condition and energy levels of each horse and rider, etc.

In essence what these professional authors are really doing is guessing what a fair price might be or, put another way, what they personally perceive to be "value".

If you’ve been educated in this manner and believe these misguided souls to be correct with their "if this race were run 100 times" nonsense, my sympathies go out to you. A mindset similar to this only serves to fatten the bankrolls of those who know better.

For the undecided and for those who have already come to the commonsense conclusion that not one race could possibly be run the same way twice, let alone 100 times, I invite you to further investigate upside and downside risk.

At worst, you’ll confirm what you already know about upside and downside risk and take comfort in the fact that you are well versed when it comes to grasping the true meaning of the word "value".

At best, you’ll pick up one or more pointers on upside versus downside risk that will continue to pay you dividends for the rest of your horseplaying career!

How would you rate yourself when it comes to understanding upside versus downside risk or value versus non-value if you like those words better?

Do you think you could pass my multi-question test asking you to identify specific situations as possessing either upside or downside risk? Do you think you could score well on this test?

Why not give it a try? Just answer each question with either the word upside (risk) or downside (risk). Just make sure that all your final answers are in place and recorded before grading yourself.

Don’t read more into the questions than what is before you. There are no "conditions" in these propositions other than those that are clearly stated. The test merely wants your "opinion".

You remember that word, don’t you? That’s the word that "drives" our great game.

This test has little to do with odds. It was designed to see if one really knows the basic difference between upside and downside risk regardless of odds. Any consid­eration of odds for any specific situation will be spelled out in that specific situation. Otherwise, treat odds as if they didn’t exist.

One other thing before beginning to take the test. Any questions asking whether a horse is upside or downside risk assumes he is returning for his next race in a reasonable period of time with good trackwork behind him.

I’ll offer you my answers for all the situations in PPM’s May issue. Here goes!

  1. A capable jockey (not a superstar) comes to your State and says he’s going to make it his "new home". For the two months on his newly adopted territory, would betting his mounts be upside or downside risk?
  2. A horse wins a race and puts up a "huge" rating for the class in which he was just victorious. The rating suggests he could take a three-step jump in class and still win if he only repeated that rating. What’s more, he gained ground at each running call and won by six lengths. This afternoon, his trainer gives him only a one-step jump up in class instead of the three steps that his last rating suggests would be absolutely no problem. Is he upside or downside risk?
  3. A horse that you absolutely love is going off at 2/5 and your personal win percentage is 34 per cent. Is this horse upside or downside risk?
  4. You equally like two horses in the same race. One is going off at 7/5 and the other is going off at a generous 7/1. You read somewhere from a noted money management guru that you should always bet the horse with the longer odds. And if you do that, you’ll end up with more money in the long run. Is following this advice upside or downside risk?
  5. You see a winning horse pulled up within 150m of passing the finish line instead of galloping out to the back stretch, turning, and lightly cantering back to the winner’s circle. Today he takes a single step up in class as is the norm with most winners. Is he upside or downside risk?
  6. A horse runs a huge winning race against good company for that level of competition and not only wins, but does so running against the track bias. Today he takes a single step up in class. Is he upside or downside risk?
  7. A horse wins convincingly from the No. 12 barrier in a middle-distance race and today takes a single step up in class. Is he upside or downside risk?
  8. A talented jockey is in a bad slump and hasn’t won a race in over two weeks. This afternoon he’s riding a horse that you’re infatuated with. You decide to bet him anyway. Was that wager upside or downside risk?
  9. You take a 15-minute look at the past performances of the day’s first event, which is a six-horse race. The race seems unplayable and you move to the balance of the day’s card. Upon completing your handi­capping for that day’s card, you find yourself with an extra half-hour of free time and decide to rehandicap the first race, which you initially deemed "unplayable". That 30 minutes of free time changes your mind about the race and you come up with a selection. Is that selection upside or downside risk?
  10. You win the eighth race but the winner is relegated on protest by the stewards and you are more than annoyed. You end up making a bet in the ninth race even though you had no intentions of playing this race before your takedown. Is betting the ninth race upside or downside risk?
  11. You bet at least five races a day. Overall, is this upside or downside risk?
  12. A horse gets a "dream trip" sitting behind a two-horse speed duel that falls apart at the 200m mark. He wins drawing off by three lengths in the final 100m and puts up a big rating. He returns within three weeks with good trackwork and takes a modest one-step jump up in class. You bet him based on the "rating" he ran last time out. Is this upside or downside risk?
  13. You find yourself in the middle of a "cold" streak, but you continue to wager as if all were normal. Is this upside or downside risk?
  14. Every day before you leave for the track, you glance at your local newspaper to see who the newspaper tipsters are picking in the races that you intend to bet. Is this upside or downside risk?
  15. You find yourself in the middle of a "hot" streak and you can’t seem to make a mistake at the tote windows. You double the size of your wagers. Is this upside or downside risk?
  16. Is wagering on small fields (five or fewer horses) upside or downside risk?
  17. You intended to make three bets on today’s card and the first two lose with no apparent excuses. You complete your "battle plan" for the day and bet your third selection. Was that third wager upside or downside risk?
  18. You like a horse in the third race today. He looks acceptable in the paddock and warms up well in the pre-race. You walk to the tote windows and notice that he’s going off at 3/5 ($1.60). Since you know that a steady diet of betting odds-on horses is hazardous to your betting bankroll, you decide to pass him. However, you notice that your second choice is overlaid and going off at 8/1, which is twice his morning line. You decide to bet your second choice. Was that wager upside or downside risk?
  19. It’s the last race of the day. You’ve had a very tough afternoon with innumerable "tough beats" and more seconds than a church thrift shop. You haven’t cashed a ticket all day, but you still have plenty of money in your pocket. You decide to try to "get out" on the last race and recoup the day’s losses. Is betting that last race upside or downside risk?
  20. Last month you collected a nice four-digit dividend on a horse in a $20,000 race. In that win, he just held on at the post after being out by four lengths passing the 400m mark. That same horse shows up five weeks later, having worked well, and takes a modest one-step jump up in class. You decide to bet him once again. Was that wager upside or downside risk?
  21. You like betting last-start maiden winners to repeat, but only when they meet two mandatory requirements. First, they must have gained ground at every running call. Secondly, they had to have put up a rating when breaking their maiden that was good enough to beat the class level that they are attempting this afternoon. Is this upside or downside risk?
  22. You like to bet last-start beaten favourites. Is this upside or downside risk?
  23. You’re going to have a healthy bet in a quality race after your horse came into the paddock looking like a million bucks and warmed up smartly under one of the top riders. He completes his warm-up with three minutes to the post, turns around, and begins the long walk to the starting gate. As he nears the gate with a minute to the post, he starts getting "hot" (sweating) and a bit fractious. You decide to bet anyway. Was that decision upside or downside risk?
  24. The morning line in a race that you intend to bet shows your selection going off at a generous 12/1. The night before when you made your own morning line, you had this same horse at 3/1. That brings you to an inescapable conclusion. Either the pre-post market is correct and you’re wrong or vice-versa. You decide not to rehandicap the race and you stick with your selection. Is that upside or downside risk?
  25. You plan on going to the track on Saturday, but get in late Friday night after attending a great party and oversleep the next morning. You get up three hours late and give the day’s racing card the equivalent of a two-minute drill in football. Was that "hurry up" handicapping upside or downside risk?
  26. You keep track of the running profiles of the track(s) that you are handicapping at the moment so that you know exactly how the surfaces are playing. Is this upside or downside risk?
  27. Whenever you wager, you always bet the fastest horse in the past performances. Is this upside or downside risk?
  28. Tomorrow you plan on making one of the largest wagers of your betting career. You handicapped this race and rehandicapped this race. You came up with the same horse both times and you can’t wait for the sun to rise the next day. Upon getting out of bed the next morning, you decide to give the race one more hard look. Will this wager be upside or downside risk?
  29. You bet one of your selections even though he fails to canter for at least 800m before loading into the starting gate. Is this upside or downside risk?
  30. A successful front-running sprinter is being stretched out this afternoon around two turns for the first time in his career and is at his proper class level. His distance pedigree says absolutely "no problem", but he faces rugged and proven two-turn winners. Would betting him today be upside or downside risk?
  31. You incorporate "physicality handicapping" (body language) into your overall handicapping methodology. Is this upside or downside risk?
  32. You saw a jockey literally "stiff" a horse last time out when sent to the post at 8/5. He comes back in his next race three weeks later at the same class level with the same jockey and shows two morning workouts. You have no "knocks" on him whatsoever. However, his morning line of 5/2 balloons up to 8/1 with three minutes to the post. You bet him anyway. Was that wager upside or downside risk?
  33. You take your own trip notes rather than depending on comments at the end of a horse’s running line in his past performances. Is your trip note-taking upside or downside risk considering the time it takes away from your other handicapping duties?
  34. You’re a dyed-in-the-wool "weekend warrior" and religiously play every weekend, every holiday, and any other day that you can escape from the "real world". On Saturday, you get your clock thoroughly cleaned and go 0 for 4 for the afternoon. You walk out of the track scratching your head, hop in your car for the drive home, and manage to repeat the phrase "I shoulda" exactly 9327 times before pulling into your driveway. You eat dinner, watch some TV and call it a day. Bed turns out to be the "best bet" of the long losing day. You get a solid night’s rest, get up feeling refreshed and handicap Sunday’s card as usual with no deviations because of yesterday’s humbling experience. You end up locating three playable races and end up betting two of the three as you would on any other afternoon. Were those wagers upside or downside risk?
  35. You keep impeccable records of every one of your wagers. Is this upside or downside risk?
  36. Over the years you’ve developed very strong prejudices against certain jockeys and trainers. You have been around long enough to know that these jockeys and trainers actually do occasionally win races. What’s more, you accept the fact that once in a while when they win, they might even beat you. Is your prejudiced thinking upside or downside risk?
  37. You always spend a lot more time handicapping better races that, on the surface, seem more playable, rather than spending a like amount of time on the cheapest races on the card. Is this extra expenditure of time on the better races during your limited handicapping period upside or downside risk?
  38. You bet as many low-class races as you do high-class races. Is this upside or downside risk?
  39. You just spent a considerable amount of your precious time taking this test to see if you have a basic understanding of the difference between upside and downside risk. Was the time spent upside or downside risk?

That concludes my set of questions . . . It’s my challenge to you to see if you’re a "top banana" when it comes to risk management.

The answers are nothing more than my opinion. I’m not looking to do battle and waste time with anyone over an opinion – mine or theirs. Opinions are confirmed for each and every one of us every single day shortly after we buy a ticket from the tote or bookmaker.

These opinions work for me and have for a long time and that is all that really concerns me. If you can incorporate one or all of these opinions into your overall personal methodology, it is my belief that you will enhance your bottom line. And if you enhance your bottom line, my purpose in offering them to you has reached fruition.

NEXT PART IN THE SERIES: Joe Takach provides his personal answers to the questions he’s posed, beginning with the one about a new-arrival jockey and whether you should be backing his mounts. Don’t miss this absorbing second part of our special series.

Click here to read Part 2.
Click here to read Part 3.
Click here to read Part 4.

By Joe Takach