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A quick example to show how you are mistaken

Posted By: Dunbar
Date: 20 May 02, 4:34 am

If Fez or anyone else thinks for one instant that in pari-mutuel wagering you can turn flat bet losses into profits by number crunching, then he knows even less about pari-mutuels than I thought.

Never happen in the world of pari-mutuels, if there is no flat bet profit, there is no profit to be had, you can only optimize the profit... not make it magically appear.

This is not just about optimization. It is even more about making statistical sense of your results.

Say you make 13 bets. 10 of them are on horses at 2-1. The other 3 are on 20-1 longshots.

Your goal, I believe, was to hit 40% on your 2-1 picks. So say you hit your 4 winners. But on your 20-1 bets you go 0-3. (not an unlikely result, no matter how well anyone can pick 20-1 horses.)

Flatbet result:
You went 4-9. You collected 8 units, but lost 9 units for a net loss of 1 unit, or -8%.

Proportional result:
You should bet roughly 1/10 as much on a 20-1 shot as on a 2-1 fav. Assuming you bet 1 unit on a 2-1 horse, you collect 8 units but now lose only 6.3 units (6 units on your 2-1 horses, and 0.3 units on your three 20-1 horses) for a net WIN of 1.7 units, or +16.5%.

BTW, I could have just as well used 6-1 shots as 20-1 shots in this example.

This, I hope, should convince you that it IS possible to turn a flat bet loss into a profit with proportional betting. More importantly, proportional betting makes interpreting results a lot easier. When you bet the same thing on a 20-1 horse as on a 2-1 horse, the standard deviation of your bets becomes so huge that it is nearly impossible to get statistical significance. This works in favor of someone who is just hoping to get lucky enough to claim to be a winner, but works against someone who truly CAN beat a tough game like handicapping horses.

--Dunbar

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Messages In This Thread

A quick example to show how you are mistaken -- Dunbar -- 20 May 02, 4:34 am
One question -- Rusty Starfish -- 20 May 02, 5:23 am
answer -- Dunbar -- 20 May 02, 6:12 am

 


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