Dave recently celebrated his 40th birthday and had a great number of insights to share in a recent blog post on 40 punting lessons.
Those lessons are explained and expanded upon in this week’s podcast.
Punting Insights You’ll Find
- How losing can set you on a winning path.
- Why lazy punters lose.
- The importance of not falling in love with a horse.
- Why not to focus on big name trainers and jockeys.
- What horse racing and poker have in common (and how it can change your strategy).
- David Duffield
David’s Closing Tip:
” Success is like being pregnant… everyone congratulates you, but no one knows how many times you were … (fill in the blank). “
Episode 021: 40 Punting Lessons From 40 Years
Hi this is David Duffield, and welcome to another episode of the Betting 360 podcast. Normally we have a special guest on, we’ve done that for the first 20 episodes, but today I just wanted to run through the 40 lessons in 40 years that I posted just recently in line with my 40th birthday. Not everyone wants to read a post like that, so I just thought I’d run through it on this podcast.
So the first thing was, anyone who claims they never went through a losing apprenticeship early on, is long odds on to be having you on. And what I mean by that is, some people purport to be experts who’ve never had a losing run of any kind. Well from the people I’ve met it’s definitely a learning curve, and most people have gone through an apprenticeship of some kind, where they don’t do very well, they lose, and they find out the reasons why they’ve lost, and they do actually learn from that. So pretty much everyone at some stage, normally early on in their career have had a really bad patch, or even an extended patch where they haven’t done well. But as I said before, you work out why that’s happened, and then you add that to your knowledge, and from there you can develop into a winning punter.
Number two is, betting with an edge offers superior returns to any other investment class. When you see a lot of investments of various kinds spruiked in the media, if they can achieve a 10% annual return that’s seen as an excellent performance. In the betting world a 10% return is a reasonable month. So I just think compared to other investment forms which many of them are, you know it’s basically just gambling, but in another name. That what’s traditionally known as gambling, that offers better returns then you can get anywhere else.
Number three, was staking and money management are the most underrated aspects of gambling. I’ve spoken and written about that many times, but a lot of work goes in sometimes people doing the form, not so much into how they’re actually going to back that horse. We do mention a lot the balance between risk and reward, but people don’t really put a lot of thought into the staking, and also the money management. As in, how they’re going to cope during losing runs, and also how they’re going to stay controlled when they’re on a really good winning run.
Related to that is number four, and that’s no one avoids drawdowns, so why be surprised when you go through it. I’ve written an article quoting Mike Tyson saying ‘everyone’s got a plan, until they get hit in the head’. It’s the same with drawdown, people say that they’ll stick with an approach despite a losing run, but when push comes to shove many people pull the pin too early. There’s no point having a betting bank unless you’re going to use it, there’s no point being surprised when you have a period of drawdown as it’s inevitable. So don’t fight it, just make sure you’ve got a money management plan that can withstand it.
Number five, was overestimating your edge, it can make an otherwise successful punter go bust. This isn’t clear to everyone, but we had Elihu Feustel on the podcast I think it was our very first guest. But with him he explained that, if you’re betting in some form of Kelly criterion, which is the way a lot of people do it, and you think you might have a 5% edge on the market, if it’s only 2.5%, well despite having a winning approach you’ll end up going bust. So that’s an important thing to be weary of, that even if you’re profitable long term, you can actually wipe out your bank in the short term.
Number six was don’t love a horse love a price. We’ve often said that they can win without us, so you let one go through to the keeper, that’s something that a lot of people struggle with. Where you’ve identified a horse that you’re really confident will win, but it’s a lot shorter than what you hoped for. Most people back it anyway, but that’s actually not the way to go about it, if you’re interested in long term profits.
Number seven, your best bet becomes a lay the moment they announce the change of riding instructions. This is just something we experience over and over again, you might’ve done a speed map, and you like a horse from an outside barrier. It’s going to be up on pace where there might not be a lot of, on the pace in a race where there might be not a lot of it, and unfortunately, they announce it’s going to go back from a wide gate. Well the moment they do that they very very very rarely win.
Number eight, if you don’t have an intimate knowledge of the mathematics of punting then you’re betting on borrowed time. Not all of us enjoyed maths growing up, I probably paid a little attention to it in school. But maths, well punting is mathematics really, I think some people call it applied mathematics, you know it’s probability, its variance. Really if you don’t understand the mathematics of it all then, you really are going to struggle.
Number nine, there are many different ways to win in this game, professionals have plenty in common such as work ethic, discipline and confidence. There are many different approaches, what works for one person doesn’t necessarily work for someone else. So there are many different ways of winning, but I think a common trait amongst the people I see that are successful would be a really strong work ethic, plenty of discipline, and plenty of confidence.
Lazy punters lose, again that’s true in that, you can’t just do a couple minutes of the form study, think you’ve found a horse that you like and expect to win, you might that time but you won’t long term. The same in shopping for the best odds, we bang on about that all the time, but if you think you can just grab a bet, or grab a selection, put your bet on at the first bookmaker that you see, and then you’re going to do well. Once again you will in the short term, but in the long term it’s a little bit more difficult than that.
Number eleven, was be very clear on the difference between causation and correlation. Many people think that just because B happens after A, that it was actually caused by A. So I don’t know if that’s confused anyone, but just because something happens after another event, doesn’t mean that one caused the other. There is correlation where you could say in some ways that it’s more about, not coincidence, probably a bit stronger than that. But just don’t think that A necessarily caused B, there’s a bit more to it. So if you’re, that happens a lot when you’re looking at a lot of data, or databases that type of thing.
Number twelve, was always be prepared to pass on a winner if you’ve missed your price, or have other serious doubts. That was related to an earlier one, but basically a lot of people fear the fact that the horse is going to win, and even though it might be under their assessed price they’ll think that they’ve missed out. So if you have doubts be prepared to pass on a winner, even right an almost bet down. And I think over the longer term you’ll find that those ones are not profitable, yes you will miss the occasional winner, but you’re not going to actually miss any profits.
Thirteen was, jumps racing doesn’t come close to paying its way, and is irrelevant to all but a tiny minority. I don’t meet anyone that really cares about jumps racing to be honest, I think it’s just a blast from the past, they’re really poor betting mediums, betting funds industry. I don’t really buy into the animal rights side of things, I think they’re just troublemakers in many ways, looking for something to squeal about. But really as far as a betting medium goes, I just think it’s a waste of time, and people talk through their pockets I suppose, you look at the betting turnover I think most punters agree.
Number fourteen, inside barriers are as a group terrible betting propositions. This is been going on for years, I hope it continues for many more, because people do the form they see barrier one or two or three, and they think that’s perfect it’s drawn really well. Everyone thinks the same thing, so the value’s gone. There actually, there’s a lot more value in drawn out wide, and also if you’re drawn inside as a backmarker, that can be a terrible spot for you. If you’re drawn inside as a leader, you’re pretty much forced to push up, and you know they’re might be horses coming from the outside to attack you. So just overall inside barriers are not great betting propositions, that’s just a very general thing though. That’s not to say we don’t bet on horses drawn inside, it’s just more of a cross than a tick put it that way.
Number fifteen, most jockeys are inconsistent, it’s just a matter of how much so. It’s easy to think that the horses you back get terrible rides, or have little luck in running, but that can happen across the board. Once again you should be doing your videos and your stats, to have some idea of who the better jockeys are. But I think the biggest difference between the best jockeys and the worst is their consistency. So I’ve said there most jockeys are inconsistent that’s true, but I think that the gap between the best and the worst of Oliver and Williams, and Rodd, and Nash Rawiller, and those kind of guys, is far less than it is amongst some of the other guys, who can turn in a great ride, but at other times they’ll put in a shocker.
Number sixteen backmarkers suck, unlucky horses tend to stay that way. Once again this is not a new thing, but people fall in love with horses that storm home from the back, look impressive, but they need a lot of luck for things to go their way, there not basically in control of their own destiny. So they tend to be over bet by the public, and not great betting propositions.
Favourite long shot bias is alive and well. Covered this many times, and people don’t believe it but the horses that are favourites that are hard in the market, they should actually be a little bit shorter. Compared to the amount that they win at, their win rate, as opposed to long shots. So you might think fifteen to one’s a good price about the horse, and it might be in that isolated instance. But as a rule that fifteen to one shot should be a lot longer, whereas the favourite horse, even odds on horses should be a little bit shorter. So it goes against the way most people think, in that shorter prices can be valued, but it’s been proven over many years and in many different markets.
Number eighteen, serious betting is now something like technological warfare. Once again most of the successful guys we come across have some pretty switched on computer programmers, programming, databases, and data that they’ve got access to. So it’s gone from being able to watch a video, or go to track work, and get some extra information that way, to being a lot closer to an IT battle.
Level staking’s for losers. I’ve covered this so many times, I’m not wasting peoples time, but if you think a horse that ten to one’s got the same chance as an even money one, well once again I don’t think you understand the maths of punting, and there’s no reason why you should stake that way either. You’re just far too reliant on horses that are at a bigger price winning for you, and you’re not outlaying enough on the shorter price horses with a much greater winning probability.
Number twenty, don’t be fooled into believing you’ve found a highly profitable approach, as positive variance can work in your favour. This is related to small sample size as well, but if you’ve done a little bit of research, and you think you’ve found something that’s fantastic, you’d want a little bit more data than just a small amount, or a few weeks, or anything like that. Because there is variance that can happen in a positive way or a negative way, so you just need to be aware of that.
Then again related to that number twenty one, is statistically significant sample sizes are much larger than most people think. You might have done some kind of research, and you’ve monitored 100 bets, and 20% profit on turnovers something like that, and you think okay this is it, I’ve finally found something. You need a lot more data than that to be confident, there are ways of measuring how much data you need to have that confidence, but as a rule of thumb, a lot more than what people think.
Number twenty-two, as a general rule commentators have no clue and are best ignored. There are a couple of exceptions to this rule, but just your everyday journalist commentator, if they were a little bit more successful at choosing horse, and suggesting a staking strategy around them, they wouldn’t be in that role. Really if the power, or the way these guys can move the market, if they really get behind one is far overblown, and far exceeds their track record. But people listen to the story, and swallow it and follow it. So that can be a good thing if it’s a horse that’s a little bit overhyped, but as a rule people pay a lot, too much attention to the commentators.
Over bet trainers and jockeys tend to remain below average from a punting perspective. So there are some where, if it’s a mild form of being over bet that can correct itself over the longer term. But then there are others that just have a really high profile, who are not great betting propositions. Said again many times, but someone like David Hayes, he’s had a good run since really settling into Euroa, well sorry a better run. But for many years the big profile, big name, family dynasty, successful in Hong Kong, people just assume that the David Hayes runner had a bit more potential, or talent then what it really did. As a rule again, as a group so for many many years. And there’s many other examples of that, I just wanted to use him as one because it’s very obvious. But certain people like him in jockey ranks, to someone like Corey Brown, that has a high media profile, and has ridden some big race winners for quite a number of years, he was seriously overrated by the market.
Number twenty-four was Betfair-itis. Not everyone’s heard this term, but you may have seen its effect, and that is, when you like a horse, say you’ve backed it at $3.00, and then in the last 2 minutes of betting it gets out to $4.50 on Betfair. You don’t even have to watch the race for those ones, they’re not going to win probably 99 times out of 100. So there are some smart people on Betfair, some people that know a little bit more than others, and when you see one drift alarmingly, particularly in Sydney less so in Victoria, that can be seriously detrimental to your punting health.
Number twenty-five was in-depth analysis of trial form can be highly insightful. Now for quite a long time I didn’t pay a lot of attention to trial form, you had your morning glory’s that couldn’t always reproduce that on the track. But with the amount of video replays, and just the data, like the trials data, the times, from someone like Vince Accardi, there’s a lot of value in the trials, yet the market tends to underrate unraced and first up runners. So if you can find the best of those, there’s definitely an opportunity there. As we’ve shown through Dean with the trial spy service, which must be about 8 months old now, and the banks more than doubled, I think it’s up 130 units.
Number twenty-six, speed maps are an essential tool for any serious punter. Once again I think people start out doing the form as such, but not paying a lot of attention to how a race is going to pan out. Without knowing where your horse is going to be in the run, or what the likely pace of the race is, you’ve just got your hands tied behind your back, and you’ll be needing a hell of a lot of luck to win.
Twenty-seven, the market underestimates first uppers, first starters and the quick backer. Long may this continue, but as a rule, maybe it’s something to do with the fact that computer programs have a fair bit to do with the pricing, or the market fluctuation these days. But they struggle to assess particularly first starters, because how do you weigh up a horse with no form, versus the race brigade. First uppers, sometimes ridden off as being unfit, and also the quick back up, a horse is racing within 7 to 10 days, can have a really good record. I’ve heard a theory about that, in that, in some ways it takes away the value or the skills of a trainer. In that, if they’re just backing it up after a short break, the horse is fit and firing, and it’s really not going to come down to having a particularly good trainer, the horse will be ready to go, and ready to put in a peak run.
Number twenty-eight, most professionals operate on low single digit profit on turnover. Again when you’re younger in this game, you think that all the pros must make 0.20-0.30 cents on the dollar, and just consistently win at a really high rate. That’s very rarely true, I mean you’ve got guys that only have a handful of bets each week, that might achieve that rate, but most are on low single digits.
Number twenty-nine, professional punting is more isolating than it is glamorous. That comes back to the work ethic that I mentioned earlier, and that’s that, you’re not, most guys aren’t even at the track these days. The way it is now with the online betting, that most guys operate from a home office, or another office, and it’s not particularly social. So that’s what I’m saying, it’s more isolating than it is glamorous.
Number thirty, boxed exotics are an inefficient method of betting. Relates to the probability of the horse winning, but if you’ve assessed 3 horses at say, $4.00, $6.00, and $8.00, well then you’re saying the $4.00 chance has a 25% chance of winning the race, and an $8.00 is round about 12% chance of winning the race. So one’s twice as likely as the other, yet you’re basically putting them in together. So you’re relying on the longer priced horse to get in the money for you to actually make a decent profit.
Number thirty-one, profitable edges become obsolete faster now than ever before. If you have found something that is highly profitable great, but don’t expect it to last forever. Again that’s been confirmed by quite a few people that I’m in contact with, or who have come onto the podcast. And I remember … who we mentioned before, he said that, well I can’t remember the exact numbers. But just in broad terms, if he’s making 0.02 cents on the dollar now with, he has a lot of tennis bets, but say roughly 0.02 cents on the dollar, if he was betting his exact selections from his model, I think it was 4 or 5 years ago, he would be making at least double that. But the markets become more efficient, and that’s the same with someone like Dominic Beirne who we spoke to, where 20-25 years ago he was having guys watch trials at Keibler, and he’s got all kinds of stuff that he works on. Which eventually feeds into the mainstream, because it just doesn’t last forever.
Number thirty-two, blindly backing a market mover after the move is just plain dumb. I’ve spoken a few times, that if you like a horse at $4.00 great. You know in fact at $4.50, if it gets smashed into $3.00 a lot of guys jump on board, but the value’s not at the $3.00, the values was at the $4.50. So they follow that move, they’re in the bottom of the market, you do back the occasional winner, you back a few winners, but you just don’t come out in front.
Thirty-three, casinos get rich on the collective ignorance of the gamblers fallacy. A lot of guys believe that they’re due so to speak. So they might think that there’s 4 races into the card, and all the favourites have got beaten, that the favourite is due. They might think that a jockeys ridden the first, whatever jockeys famous, jockeys ridden 5 or 6 races in a row, hasn’t ridden a winner so they’re due. Or they’re at the casino, and there’s 6 blacks in a row, so the red’s due, that’s all rubbish. So if you don’t understand that there’s plenty of information on the blog that’ll help guide you, or just Google gamblers fallacy.
Thirty-four, if you don’t know your edge chances are you don’t have one. I suppose that’s a little bit like that poker saying, where if you don’t know who the, what do they call it, the fish, or whatever the worst player at the table is, chances are that it’s you.
Number thirty-five, it’s about Murphy’s law. No doubt Murphy was a punter, as every new plan or strategy will start below expectations. Experience that many times, where we will have say the trial spy service has a great track record of success, I’m pretty sure that the first weekend wasn’t fantastic.
Number thirty-six, being a contrarian isn’t easy but it is essential. Now if you, the only way to find value is by opposing the market. We’ve said that profit is perception minus reality, so you really need to be able to stand up for what you have developed. Because there’s going to be times where the market hates your selection, but you need to be able to have the courage of your convictions to push on anyway. So by being a contrarian you need to oppose the market, because if you just flow with the market, once again you’ll back winners you just won’t finish in front.
Number thirty-seven, to win long term you must know something that the market does not, or have a better understanding of it. Like if you’re just backing a horse because you thought it won well last start, great. But that’s not actually the secret to profits. The secret is having a more in-depth understanding of certain aspects of the form, because once again if it’s already baked into the cake, there’s no profit there.
Number thirty-eight is, it’s true that you can’t eat value, but it’s also a fact that you won’t be able to be eating without it. And that is that, you need to find value, you need to find overs, otherwise you won’t be making a profit. So it’s not about just backing winners, anyone can do that, but it’s about finding horses that are over their true chance of winning.
Thirty-nine is, there’s a huge business opportunity for a high volume, low margin corporate bookie in Australia. You see some overseas bookmakers that operate on tiny margins, I’m talking more about sports betting, whereas in Australia there’s no one that really does that. They all compete with their marketing budget, but less so on low margins. There’s just a massive opportunity there, if someone can get it right, particularly in the racing game, the amount of people that have been limited or banned all together, there’s hundreds if not thousands of people that would come straight back. So if they can come up with a model that works on a low margin they’ll kill it.
Number forty, Hong Kong racing leads the way in so many ways. There’s a love letter I’ve written to Hong Kong racing, but it’s got so much going for it it’s frightening. I won’t expand on that here, I have enough times in the past, but some excellent opportunities in Hong Kong, both for us as punters, but also for administrators to learn from.
Number forty-one, the quaddie sub fast will probably last another 40 years. Somehow, for some reason, they haven’t been able to work out what to do in the case of late scratching’s, and they don’t seem to have any urgency to get it fixed either. So I’m sure that’ll go on.
The forty second one, and yes there were more than forty, I just said that old age must be kicking in. But it was successes like being pregnant, everyone congratulates you but nobody knows how many times you were…and you can fill in the blanks. There’s plenty of ups and down along the way, so if people see someone that is highly successful now they think that’s the way they’ve always been, that’s rarely the case. So I think there’s a lot to be said for hanging in there, and pushing through certain barriers, on the way to overall success.
So that’s been a reasonable episode, it won’t be a normal thing for it just to be a one man band. We’ll get back to having the guests next week, so until then thanks for joining us and we’ll catch you next time.
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