Wed Sar 3rd - interesting jockey change

[Alydar in California]

David writes: \"Alydar,

Please tell me how a serious better uses jockey ROI stats to improve his own ROI.\"

Do you believe riders are fungible? If you don\'t, you can use ROI stats to point you toward riders who are competent and riders who are incompetent. That other people will have this information doesn\'t make it worthless. That is silly. If everyone knows that a particular horse will have a one-length head start, should we ignore the head start? I don\'t believe anyone can win with this alone. It is just one more thing to factor in. This was Michael D\'s position before he began to overstate his case.

[HP]

I guess it\'s nice to have DPatent agree with me.

Michael, I recall saying (not on this thread) positive things about Prado a few weeks ago. Aly is better at searching these things than me. If Prado was riding a horse I liked I would bet the horse. Nothing\'s changed, except now the horses Prado is riding are often shorter than they should be, and there may be betting opportunities when the shorter price isn\'t justified.

Others will now call Prado (who might not have called him a few weeks ago) and he\'ll probably have more choices. This \'up\' cycle will last as long as it lasts. As betting angles go, you might be better off waiting for Prado to screw up, since then the public frontrunners will then go back to underestimating his choices and handicappers will go back to getting square prices on horses Prado rides that figure to win. This cycle goes with a changing cast of riders ad nauseum. A few seem to be close to the top all the time, and the \'second tier\' is always moving around.

Your friend wouldn\'t have made a dime if Prado wasn\'t riding horses that had a fair chance of winning. If you think they\'re winning because Prado\'s just so much better than the others, I\'d rather not have another argument. If Noel Wynter or some other .07 percent winning journeyman jock rides the fastest horse he will probably win, and I will make that bet every time. Good luck. HP

[Michael D.]

If Noel Wynter has the fastest horse, and Bailey and Velazquez have horses a length or so slower, your man will most likely lose the race (and you won\'t get compensated for the risk, as the ROI\'s will tell you). Let\'s just say we disagree.

[HP]

Whew. I\'m just glad someone is going to keep betting on the slower ones. HP

[Michael D.]

ROI my friend. Using our example, simple math says I will be taking your money.

[dpatent]

Alydar,

To answer your question, \'No.\'  And I have never claimed we should ignore who the jockeys are.  I asked you a simple question.  Actually, it\'s a complex question and there\'s probably a book we could write about the following topics implicit and explicit in this discussion, including:

1) Information and how it is factored into markets (e.g., GE is a great company, but should I buy the stock?).
2) Hot streaks and whether you can predict when they will begin and when they will end -- on this point, an interesting study was done on so-called \'hot shooters\' in the NBA and whether the fact that a player had made his previous shot bore any relationship to his shooting percentage on the following shot -- btw, there was no correlation.
3) The past as prologue
4) So-called random factors that we might say are random only because we don\'t know the underlying causes.

I\'ll split the royalties with you 50/50 if you can find us a publisher.

Now, care to answer my original question?

[Alydar in California]

David Patent wrote: \"Now, care to answer my original question?\"

  I look at ROI stats, upgrade horses that have good riders, and downgrade horses that have bad riders. I can\'t quantify how I handle it, and I don\'t split hairs.

\"1) Information and how it is factored into markets (e.g., GE is a great company, but should I buy the stock?).\"

   How it is factored into the market is meaningless. You\'re double counting, dude. The parts matter early. In the endgame, what matters is their sum versus the price. And it matters not a whit that some people will add incorrectly early in the game. What matters is the sum they come up with.

\"2) Hot streaks and whether you can predict when they will begin and when they will end -- on this point, an interesting study was done on so-called \'hot shooters\' in the NBA and whether the fact that a player had made his previous shot bore any relationship to his shooting percentage on the following shot -- btw, there was no correlation.\"

  Don\'t go down this road unless you mean business, David. Bluffing is dangerous. I read Stephen Jay Gould\'s account of the study. The 76ers, right? Gould also argues that Joe DiMaggio\'s hitting streak is the most incredible record. For our purposes, this argument is unimportant. I\'m talking about established competence, not a brief hot streak.

\"3) The past as prologue.\"

  Throw away your sheets.

\") So-called random factors that we might say are random only because we don\'t know the underlying causes.\"

  This applies beautifully to your opinion that speed biases don\'t exist. If you can\'t figure out why, pretend that it doesn\'t exist. This is hubris, I tell you.

[HP]

\"1) Information and how it is factored into markets (e.g., GE is a great company, but should I buy the stock?).\"

How it is factored into the market is meaningless. You\'re double counting, dude. The parts matter early. In the endgame, what matters is their sum versus the price. And it matters not a whit that some people will add incorrectly early in the game. What matters is the sum they come up with.

Aly,

Try to restrain yourself from expressing expertise on everything. This is total nonsense. Of course it matters that some people add \'incorrectly\' early in the game. If they add incorrectly early in the game, it makes it that much more likely that they will come up with a useless and misleading \'sum\'. If the sum is off (because of the bad early addition), how useful can the sum be when compared with the price? The skill you have in properly identifying and adding up the variables or figures is precisely what separates a useful sum/price analysis from nonsense, whether in the stock market or the racetrack.

You\'re getting carried away. HP

[TGJB]

Before this deteriorates, I would like to say: the subjects are definitely worth discussing, and the discussers are ones I like tor ead. But it can be done without the personal cracks that raise the temperature, by all parties.

[Alydar in California]

HP: You have misunderstood this so thoroughly that I\'m going to suggest that you go back to peppering \"Mr. Friedman\" with questions about when The Sheets will be available on-line. Your obsession with that subject was interesting, and if you don\'t explain it, conspiracy theorists will have a field day.

    What you quote above pertains to double counting. Once you have a sum (your estimate of a horse\'s chances), the parts become meaningless. They have been accounted for. To go back to them is to double count. Let us say you\'re making an odds line for a Bailey horse. Taking everything into consideration, including his wonderful skills, you make the horse 4-1. At this point, the statement \"Bailey\'s skills don\'t matter because the crowd knows about them\" becomes idiotic. The crowd\'s tendency to bet Bailey is accounted for in the horse\'s tote odds, against which you will be comparing your personal line.

     And if you are correct in making this horse 4-1, it matters not a whit how you got there.

[Alydar in California]

HP wrote: \"Of course it matters that some people add \'incorrectly\' early in the game. If they add incorrectly early in the game, it makes it that much more likely that they will come up with a useless and misleading \'sum\'. If the sum is off (because of the bad early addition), how useful can the sum be when compared with the price?\"

   Their errors are reflected in the sum. Once you\'ve made an assessment of their sum, their errors along the way become meaningless--unless your interest is in helping them to avoid the error in the future.

[Michael D.]

HP,
Your previous post was exactly incorrect. What matters is what is factored into the market AT THE CURRENT MOMENT. In the end, we are all dead. If the market knew that Prado was riding well today, and moved his horses up only 1 length each, there was a great chance to beat the market and make money by betting Prado. However, if the market knew that Prado was riding well today, and moved his horses up ten lengths, there were no opportunities. In any market, the value in the end is obviously the sum vs the price. I can guarantee you, however, that you will never make a cent knowing the value of the sum. You will only make money if you know if the market has priced that sum correctly AT THE CURRENT MOMENT, or if they have marked it too expensive or too cheap. The guy next to me continues to make money betting Prado, as while everyone knows he is riding well, they underestimated his value today.

[Alydar in California]

Michael: \"IN THE LONG RUN we are all dead.\" We are all Keynesians now.

[Michael D.]

Please, a Keynesian? Anything but that. My heroes are F.A. Hayek and Milton Friedman. I have read \"The General Theory...\" a number of times though, so a few of the ideas have stuck with me. I will let HP get in the last word here, and move on to the next subject....................(I think I said that once before though)

[dpatent]

Alydar,

I will have to compose some kind of response but it will be over the weekend.  No personal attacks or anything.  I just think you were a bit too glib in your response to not be called on it.  Oh, and on #2 I do mean business -- no bluffs.