Heard of Ray Dalio? He’s an American philanthropist and the founder of Bridgewater Associates, the world’s largest hedge fund. Bridegwater has almost $200 billion currently under management and decades of above-average performance. Dalio’s personal wealth stands at just under $20 billion, making him one of the 100 richest people in the world.
He was born into a fairly “normal” middle-class family – his father was a club musician and his mother a homemaker. He started Bridgewater from his apartment in 1975.
So what? What does this have to do with betting?
In 2017 he published ‘Principles‘, detailing what he’s learned over his career. He argues that life, management, economics, and investing can all be systemized into rules and understood like machines.
Unsurprisingly, given Dalio’s work in investing, many of his ‘Principles’ can be applied to punting and are well worth revising…
Find the best answer, not the best one you have
Recognise the power of asking: “What don’t I know and what should I do about it?”
Your goal is to find the best answer, not to give the best one you have.
Do you know the answers to the most important punting questions, such as the mathematics of punting, winning strike-rates, profit on turnover, money management and whether various racing wives tales have any element of truth?
For example, what kind of drawdowns should you expect from a 25% winning strike-rate? How much of my bank should I outlay per race? Is there such a thing as second-up syndrome? When does dropping back in distance have a negative effect on a horse’s winning chance? How do favourites perform on wet tracks versus dry? Can you make money backing the top trainers or jockeys? Are staying events less predictable than sprints?
There is an unlimited list of questions, but do you have the best answers to the most important ones?
Is your analysis better than the market?
Bridgewater is known for producing huge amounts of research that help it grind out steady, rather than spectacular, gains from a very diversified approach.
Do you do sufficient research before placing a bet? Are you confident that your analysis is better than the market, so that you’re betting with an edge? Or are you doing the form in a similar way to many others?
Have a game plan
You need a well thought-out game plan. The few hours spent planning will be virtually nothing in relation to the amount of time that you will spend ‘doing’, and it will make the doing radically more effective.
Finding the path to success is at least as dependent on coming up with the right questions as in coming up with answers. When faced with a problem, successful people:
- ask themselves if they know all the important questions about it
- are objective in assessing the probability that they have the answers
- are good at open-mindedly seeking believable people to ask in order to explore their reasoning rather than to just accept their conclusions.
Specifically related to punting, consider the types of races you want to bet in, the types of horse you want to back and when / how you will bet. This matrix of must-haves should be based on you having initially asked the right questions and then researched the best answers.
By deciding on a framework for the type of race you want to get involved in and the type of horse you want to back, you can approach things in a business-like manner and avoid wasting time (or even worse, money) getting involved in unsuitable races.
When you have established your strategy, get some expert advice from a variety of sources. Don’t worry about trying to solicit positive comments as those areas won’t be the ones that need further work. Get someone whose opinion you respect to play the role of ‘devil’s advocate’ and pull your plan apart. Successful people ask for the criticism of others and consider its merit.
Ray Dalio stressed the importance of diversification in a Reddit Ask Me Anything event where he said that a “flood of money and credit” was unlikely to recede https://t.co/8e4ikAP6Vt
— Bloomberg (@business) December 9, 2020
The maths of punting
It’s wrong to blame losing streaks on anyone or anything other than yourself. Drawdown is unavoidable, and it is your challenge and test to successfully deal with whatever comes at you. Blaming bad outcomes on anyone or anything other than yourself is essentially wishing that reality is different than it is, which is silly. It also diverts your attention away from mustering up the work ethic, mindset and other qualities that are required to produce the best possible outcomes.
Remember, the mathematics of punting will test your psyche and personal resilience. Plan for it, expect it, and deal with it in a level-headed manner.
The right mindset
If you don’t mind being wrong on the way to being right, you will learn a lot. You mustn’t feel bad about your mistakes because:
- They’re to be expected,
- They’re the first and most essential part of the learning process, and
- Feeling bad about them will prevent you from getting better.
Use mistakes as learning and growing experiences because the first step toward deep, fundamental improvement is feeling the pain of failing and accepting the responsibility for it.
Pain + Reflection = Progress
Reality + Dreams + Determination = A Successful Punter
A large impediment to punting success is emotional. Ego is the biggest single one, but you’re more likely to get what you want out of betting if you can suspend your ego and take a no-excuses approach to achieving your goals with open-mindedness, determination and courage.
Opinions are like a***holes: everyone has one
While being open-minded is far more important than being bright or smart, not all opinions are equally valuable – so don’t treat them as such. Many are worthless or even harmful so it is not logical to treat them as equally valuable.
For example, the views of people without any proven record of profitable tips or ratings are not equal to the views of people with great track records and experience. Just because the jockey, trainer, or journalist gets a lot of media exposure doesn’t mean that their selections make a profit.
All views should be considered in an open-minded way, but put in the proper context of experience and track record. Ask yourself whether they have earned the right for you to place any importance whatsoever in what they have to say. Opinions are easy to produce, so there is an abundance of bad ones around.
It’s important not to let our biases stand in the way of our objectivity. To get good results, we need to be analytical rather than emotional. Whenever I observe something in nature that I (or mankind) think is wrong, I assume that I’m wrong… (1/2) pic.twitter.com/dlxqsbZF7k
— Ray Dalio (@RayDalio) December 6, 2020
Do the hard things
Force yourself to do the difficult things because the cost of not doing them is enormous. It’s a fundamental law of nature that you have to do difficult things to gain strength and power. A bit like pushing yourself extra hard at the gym… after a while you make the connection between doing difficult things and the benefits you get from doing them and with time you come to look forward to doing these difficult things.
This may be putting twice as much effort into analysing half as many races, shopping for the best available odds, keeping honest and detailed records, or learning exactly how to apply sectional times as part of your analysis. It’s a fact that for most people the thing they avoid doing is the exact thing they should be doing.
Know what value is
If you are not betting on the value runners you can’t win long-term. By definition, unless you are getting odds that are greater than their true chance of winning, you can’t possibly make a profit.
But how do you know what value is if you don’t have a set of rated prices? Do you just guess whether the $3 available about your top selection is good value, or whether it is well and truly under the odds?
You will get what you deserve
The results that you end up with will reflect how you handle everything to do with gambling. So take control of your betting life and hold yourself accountable. People who wish for a great result but are unwilling to do what it takes to get there, will fail. Getting more worked up and shouting louder at the TV screen or radio won’t improve your winning strike-rate.
When trying to understand and diagnose problems, it’s important to avoid being a “Monday expert”.
Never evaluate the merits of a past decision based on what you know now, versus what you could have reasonably known at the time of the decision. Do this by asking the question, “What should an intelligent punter have known in that situation?”
Punt like a pro with Trevor Lawson’s Melbourne Ratings.
As well as a full set of rated prices, speed maps and suggested bets, you can spend each and every raceday with a pro punter: the Melbourne Ratings Live Page gives you direct access to Trev himself to ask whatever you like.
If you're keen to win, it’s the only way to punt.