Congratulations You Made It!
Welcome to Lesson 4. And may I take this opportunity to thank you for your support! You have come a long way.
We are going to continue to analyse favourites in a disciplined way. Many punters assume that because a horse is the favourite it must be a poor bet. That is not true. The issue is not the favourite itself. The issue is whether the price and the conditions make the selection a true value bet.
A favourite can be a sensible bet when the market has not overreacted and the horse genuinely has the best chance. But it becomes a mistake when people back it simply because it is the market leader.
A favorite is a favorite for a reason. The market has judged it to have the best chance of winning. That assessment is usually based on solid evidence and we are looking for winners aren't we?
What Makes a Favourite Worth Backing
The right question is not “is it favourite?” but “why is it favourite, and is the price still fair?”
If the horse has strong form, a suitable draw, a pace profile that fits, or a clear edge in the conditions, then backing it may make sense. In that case the favourite is not being chosen on emotion, but on evidence.
Why Over-backing Short Prices Causes Problems
Short-priced favourites are often heavily supported because they look obvious. That is exactly why they can be dangerous. The more obvious the selection looks, the more likely the market is to have already priced in that advantage.
That is where discipline matters. A favourite should only be backed if the price still offers value and the analysis still supports the selection. If the market has already taken the edge away, then the right choice is to leave it alone.
However, if a horse is going to win it doesn't matter what the price is as long as it wins! If, for example, a horse is priced at 1.3 and we know from keeping accurate records that horses fitting this criteria win 9 times out of 10, you are looking at a value bet!
How to Apply Lesson 3
In this section, we will look at how to apply the concepts from Lesson 3 using your spreadsheet.
When you see an all weather meeting in the morning paper or any online website. Open the spreadsheet and enter the relevant details for each race.
- Fill in columns A to K
- Make your bet when the spreadsheet tells you to in column AF
- Check the results in columns L to O
Crucially, don’t tell anyone else that you have made the bet. If you do, you may influence the market, alert other punters to the same idea, and reduce the edge that you worked hard to find. In a market like this, keeping your thinking to yourself is part of the strategy, because the more quietly you operate, the less likely you are to help the market correct itself before you get the price you want.
And don't worry about the readers who chose not to download the spreadsheet but know the strategy. They will tie themselves up in knots trying to get the spreadsheet right. In the meantime they will get frustrated, drop the idea and go back to punting. I assure you.
You Also Have a Duty to Fellow Subscribers
Remember what I said about markets collapsing when word gets out. Your fellow subscribers rely on the same edge you have found, so it is important to act responsibly and not share your insights prematurely.
Stay disciplined and keep your insights to yourself.