Transcript of Podcast: Dave & Derek discuss some common traps handicappers fall into. This part 3 covers why being so invested in a popular horse can lead to ruin!
Dave: I think because you write so much about individual horses you are much more prone to this. It kind of ties into the next one on our agenda which is number 3, be so invested in a popular horse that you must make a bet.
Derek: That to me is probably the biggest failure of so many players and it really does, the two points tie in so well because it really comes down to one’s ego. I remember at the Belmont Stakes 2008 I publicly picked Da’Tara, who was probably one of my best public picks ever and I had people write and talk to me about how dumb I was and when Big Brown wins I can join them in their handicapping box and they will teach me how to handicap.
All these kinds of things and I remember making the point, even after the Belmont when Big Brown lost and people said I had Big Brown at 2-3. Who cares! He was favorite in the Kentucky Derby, a big favorite in the Preakness Stakes. I really think people let their ego run away and they so badly want to be right, spot that super horse that they forget about all the other basics of handicapping, that you do not take a short price on these kinds of horses.
Every horse can lose, all that kind of stuff. I think with the advent of the internet, blogs and so forth it has gotten worse. It is a great way for value conscious players to make money, look for those horses. In fact in the Breeder’s Cup Classics, Arrogate is going to get a lot of play. I have not looked at the race, I do not know if he is deserving of that play, but I guarantee you just based on his traverse alone he is going to get a ton of looks and a ton of people saying this is a super horse, how can you possibly bet against him. Of course the same will be said of California Chrome.
Dave: I think that is a great analogy. I think another thing too… to think about especially with the Triple Crown races and specifically the Kentucky Derby, tying it back to number 2, people get on a soap box about this particular horse for months and by the time the race approaches.
I rooted for Chrome, maybe not in the beginning because of the issues with the owner. But he has turned around, I root for Chrome because I think he is good for racing but I cannot be invested in him
Derek: A good example of that, just recently with Run Happy. I have mentioned that I think Run Happy can stretch out, I think he can route and a bunch of people disagree with that. Of course he came back in the Ack Ack after he ran fourth and heard from a bunch of people, you still think he can route? He did not look good in that race! I said no it is his first race after a long layoff and that was a pretty productive race. One guy in particular challenged me to a bet in the Breeder’s Cup dirt mile, will he win the dirt mile?
When I actually looked at, not the dirt mile because I do not know who is competing, Run Happy and it is like whether I like this horse or not, the odds are not good. First of all that style is not conducive to winning the dirt mile, that front running style and secondly he just has not had that much preparation. Even though I really like this horse and I want to see this horse do well, I cannot tell you that I am going to bet him on Breeder’s Cup day, I do not think any handicapper should do that.
I have made this point you brought up the Kentucky Derby, you get people that will literally talk about I like this horse when he the horse. Why, did you get paid more because you likes him back then? If you are betting with futures that is a horrible bet in most cases. There is nothing to be gained by liking a horse ten hours, ten days or ten years before post time which would be really amazing if you could pull that one off. It does not matter, you get paid the same
Dave: I need to dominate for a minute and tell you my future bet story. The future bet horse is Mr. Frisky. Do you remember Mr. Frisky?
Derek: I do remember, yes
Dave: There was a guy Stewart who lives here in Reno and we were great friends back then. Long story short, we had a very small dispute over a small amount of money, like $50. It was not like an angry dispute. He wanted to give it back to me and I did not want to take it. It was very friendly.
Finally we decided, this is several races before the Derby, we were going to take the money and bet it on Mr. Frisky in this upcoming race. From memory, he went off and paid like $9. Our agreement was every time Frisky ran because he just look so great on paper, we were going to take all the money we had and bet it on him to win and then after the race was over, take half the money and bet it on Frisky in the future book. We did and he won like every race.
The day of the Derby we were sitting there with future bet tickets worth $1600 as I recall if he actually wins the Derby and we realized we did not have a snowball chance in hell. It was a large field and we tried sixteen ways from Sunday to figure out how we could hedge this bet and we just could not do it. I do not remember who won, maybe you do and i think he paid a price, I honestly do not remember. But that is my future book story and I think that is the last time I ever made a future bet
Derek: Mr. Frisky for those who do not know was a horse from Puerto Rico, came to the United States with an undefeated record, was Rodriguez the trainer?
Dave: That sounds right.
Derek: Hall of Fame trainer, won his first two or three races in the States then finished 8th in the Kentucky behind Unbridled.
Dave: That is the one! $77?
Derek: Yes. The race to me that I always remember with Ms. Genter. He is taking the lead Ms. Genter. You remember that video? It is classic with the trainer and Carl Nafsger talking to Francis Genter who is in her eighties, it is a really cool horse racing story.
The new ones offer parimutuel, those I think are a little better. But most of the time if you go through a book or Vegas the prices are going to be so deflated on future bets. I would be hard pressed to find any that are good bets.
Dave: They have parimutuel future bets?
Derek: Yeah you did not know this? It has been offered by Churchill Downs for almost six years now, something like that. The way they do it because they cannot get every horse, they will have twenty three, twenty four entrants and twenty five encompasses everyone else.
I think it is still true that in the very first pool, you usually do like three pools, everyone else is a good bet, it is returned deposits of ROI. But that price had gotten lower and lower with each subsequent year, whether it will continue to offer a positive return is dubious
Dave: That is very interesting. On this topic, they have changed the way you nominate now for the Kentucky Derby. Now it is a point system, right?
Derek: That is correct. People have made the point that since that point system came in it had been nothing but favorites in the Kentucky Derby, you see less of cheap speed. I have not looked at the pace figures specifically but I think they have kind of dropped too. It is kind of interesting. I do not know if that is a good thing or bad thing but some people see the light.
I worry there is too much politics in it because there is no way the Dubai race should be given points, not only is it not for this Derby winner, they are just not even competitive most of the time. That is my one issue with it. For some tracks it was incredibly detrimental. Hawthorne was the Illinois Derby, that means nothing now and same thing with Golden Gate with their future races. That is one part of it that I think is unfortunate, maybe it has made these race is more competitive, I do not know
Dave: Do you remember how they used to nominate for the Derby?
Derek: It would not necessarily be the nomination but in terms of who got in the gate it was based on graded stakes earnings
Dave: No, no, go back years and years
Derek: I do not know from further back
Dave: When you had a mare that was in full the first fee was $10 registration fee and some period of time would go by while the horse was in full and the second payment would be a month later and it would be $20, I am making these numbers up but the first one day was $10. In order to keep the potential full in the Derby running you had to keep these payments up and they got bigger every single month.
After the full dropped they began to escalate much more seriously. Nothing compared, it was not a $1million or $3million dollar purse or whatever it is today. But by the time the horses were two years old the monthly payments to keep the horse alive in the running got larger and larger. Then at some point, I am sure there is someone out there who knows way more about this than I do, eventually you would get down to X number of horses and now they had rules for the drawing which is what you are talking about
Derek: Interesting. Kentucky Derby history is fascinating anyway because you look at the early running, people will talk about how much front running speed does not win. Early on the Derby was dominated by wire to wire winners. In fact the wire to wire percentage is still relatively high historically because of that. But certainly that has changed over the years.
Even the stature of the race, I look at some of them people forget Sir Barton, he is a retroactive Triple Crown winner, there was no triple crown when he won. This horse, if my memory serves me, was a maiden when he won the Kentucky Derby and he had been beaten badly in some races. Look at him now, we scratch our heads, why would this trainer put him in here when he obviously does not belong? Just like we heard about Mine That Bird and I was one of those in that course. Kentucky Derby history fascinates me and I did not know that was the way it was originally done
That concludes Part 3 of 5 Ways to Destroy Your Chances of Winning, check back for the rest of the series.
About Derek Simon:
I love numbers and analysis and have been able to parlay that into an exciting career writing about two of my greatest passions — business and sports.
In addition to working as a freelance financial writer for Newsmax, The Motley Fool, Investopedia/Forbes, Beacon Equity Research and Investor Concepts (among others), I was also the editor of Small Cap Insider, a monthly newsletter highlighting investment opportunities in the small cap sector.
Currently, I am the editorial director for US Racing where I contribute written, audio and video content and oversee a team of talented and passionate writers.
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