This is the transcript, for one segment of Handicapping Live Show #3: Dave’s IV Handicapping versus Conventional IV Handicapping
In 2013, on the Handicapping Live Show, Episode 3 featured several topics. One of which was a comparison of Impact Value Handicapping techniques. Time is marching on but the numbers stay the same. We thought you would enjoy considering the following:
Impact Value Tables were invented by Dr. Frederick Davis, to my knowledge, way back in 1974 in his book Percentages and Probabilities and created an entirely new approach to handicapping thoroughbred horse races. He used four factors. Loose version is: how often the horse wins compared to how often he SHOULD win. And does not take the tote board into account.
I’ve created five horses below to illustrate:
That is the conventional way Davis created. You complete step 4 to come up with a theoretical probability. The idea would be you use this to make a line and I think most people will agree if they’ve tried this, that they have not been thrilled with the results. Nevertheless, it does push the winners to the top.
My approach is a little bit different. Not hugely so.
When we look at two speed rating factors, there’s going to be some connection between those two factors. Even earnings per start is going to have a connection to a speed rating because faster horses earn more money! The logical question would be: to what degree are the factors inter-related. I’m going to suggest to you that that is too much work for most people to do. It is a huge problem.
So instead I use the Golden Ratio (A Fibonacci sequence). The key element that we will use is actually that of the ‘golden ratio’, which says that the numbers in a sequence going upwards are multiplied by 1.62 and downwards by 0.62.
The truth is, you really don’t need to know any of this, when you use our software. For that matter, if you are a paper-and-pencil-player, you won’t even use your calculator till you get to the last step because all the rest will be done for you. Spreadsheet users will find all the work is done for them.
Step 1 is the same.
Step 2 changes:
In this table I’ve completed the equations:
When we get to the third column – it narrows the difference between the top and the bottom horses. Effectively it dilutes the potency of the factor and that’s exactly the idea behind the weight. It has lessened the impact of the third factor. We move on to the fourth step – multiply out the IVs for each horse as before.
The only thing we are doing differently is the weights.
The field total is lower because the score is lower. Then we still convert to percentages.
So what you find is usually less difference from top to bottom. That is, I think, IVH in a nut shell!
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