backing 2nds variance

Cameron O’Brien’s Key Bets went public with Champion Bets last September. We now have ten months and over 700 bets on the public record… so let’s take stock of our results and see if there’s anything we can learn.

Firstly, the overall numbers:

Bets: 724
Wins: 159
Strike rate: 22.0%
Total outlay: 933.0 units (average stake 1.3 units)
Profit: -41.3 units
Profit on Turnover: -4.4%
High point: +35.3 units
Low point: -46.9 units

On the face of it, that’s not pretty. Being down 41 units isn’t a lot of fun. Given a 100-unit bank is always recommended, it’s not crisis time… but negative PoT of 4.4% isn’t the return anybody is after, either.

So what do we do? Is this a normal run of variance, or are there bigger issues?

To try to get an idea, we need to go deeper than the top-level numbers and have a look at how the backed horses are performing.

We’ve already seen that we have 159 winners from the 724 bets. Let’s break that down a little more:

Bets: 724
Wins: 159
2nd: 128
3rd: 81
Total placed: 368
Unplaced: 336

So on face value, things aren’t going horribly wrong – we’ve had more horses finish in the top three than not. It tells you immediately that while Key Bets isn’t winning, the analysis and the bets aren’t a mile off: it’s not like we’re backing horses that are nowhere near it.

So the approach is well worth exploring further – it’s well possible we’re just seeing a case of variance. And variance will always turn and balance out in the longer run.

But what does this mean to our bankroll?

Winners: +644.4 units
2nd: -184.2 units
3rd: -110.7 units
Total placed: 349.5 units
Unplaced: -390.8 units

Now we’re starting to see a few things. Of obvious interest to us punters, who often consider ourselves perennially cursed, is the 128 second placings where we’ve lost 184.2 units. That stings.

Just to give an idea of the swing involved, if those 128 runners win instead of running second, it gives us a profit of 578.4 units on them, rather than a loss of 184.2 units.

(Obviously that’s totally unrealistic, you can’t completely avoid backing seconds!).

But if we had only got a small portion of those seconds over the line, things would be very different. The 128 second placings ranged in price from $1.60 to $22.70, so things could be a lot better if a small number of them won.

To illustrate this, let’s assume that just ten of the 128 second placings won. And to be conservative, let’s make it the ten shortest runners of the 128 – the ten the market liked the most. They were priced between $1.60 and $2.50.

Had just those ten of the 128 won, we’d be 47.9 units better off – rather than losing 20.7 units, we’d have profited 27.2 units. We’d already be into profit rather than being at a loss overall.

This isn’t to rewrite history – the results are what they are. It’s merely just an illustration of how tight the margins are, and hopefully shows that although the bottom line is battling a little, Key Bets is definitely not a mile away from success.

The last thing you want to do is jump off after an extended period of bad variance and miss out on the upside. While you can never predict the future and know if this will be the case, by looking at a few of these stats you can try to get an indication if something is close and therefore worth sticking with.

With so many bets losing by a small margin, and only a few of them needed to completely remove our entire loss to date, I’d be willing to stick with package for some time yet… the variance should turn!

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