Book Review: Handicapping The Wall Street Way: Picking Xtra Winners at the Track

Ah yes my friends. Today it is my pleasure to bring you a review of the book of one of our advertisers, Uberhorse.com. The book is written by Mark E. Ripple and the title is as shown in the header for this entry.

The general thesis of the book is that playing the horses is much the same as investing in the stock market. Particular with regards to the Efficient Market Hypothesis (EMH) as an analogy to the wagering pool. The gist of EMH is that at any given moment the given price for a stock is at the proper level due to the vast amount of information known about the underlying asset the stock represents. The idea being that the ebb and flow between rational buyers and sellers establishes the true value for the stock.

The author makes the claim that betting pools behave similarly to the market in that there is a vast amount of information processed by rational players which is used to establish the proper odds for each contestant in the race. Therefore, at any given moment the odds for a given horse are a true reflection of that horses probability of winning the race. The author has dubbed this phenomenom the Efficient Pool Hypothesis (EPH).

Naturally, there are flaws in the EMH as well as the EPH and imbalances occur in both markets that the astute trader (player) should be able to take advantage of. Without going into all the reasons (greed and fear) that these imbalances occur, I am in general agreement with the author on this count.

Generally, in the markets and in the wagering pools, the crowd gets it right most of the time. In recent years in the stock market we've seen many manias and panics. These manias and panics are over-reactions of the crowd to certain pieces of information which is either favorable or unfavorable. The author gives several examples of how these imbalances may occur at the racetrack and suggests methods by which one may take advantage of these imbalances. The think I liked best about the suggestions are that they were simple, easy to follow, common sense ideas without a lot complicated or esoteric calculations that are impractical for most player and, in my opinion, of dubious value anyway.

The author talks a little about the psychology of betting. The subtitle of Chapter 2 is "The Zero Sum Game". I disagree with the author on this point. Because of the take-out, racing is actually a negative sum game. The track returns less to the bettors than they take in, its how they make their money. Here he makes some generalized observations about different types of players and the effects these different types may have on the betting pool. I really think this is probably one of the weaker sections of the book as the author makes several conjectures regarding player preferences which may or may not be so.

Most analogies are of limited value at some point, and here I think the author meets his Waterloo in comparing two and three year olds to penny stocks. I don't think anyone is thinking of Rachel Alexandra as a penny stock. Personally, I love betting 2 year old sprints because they are all about speed as two year olds just hit the track and go. They have yet to learn the finer points of racing and if you can find the one that will break well and carry his speed for 4 1/2 furlongs you've likely found the winner. But even noted author James Quinn warns against playing 3 year old maiden races saying they are too unpredictable, so I can't totally bust on the author for this part of the book. I'll just say that I didn't think this part of the book added much to the discussion and move on.

The author offers a little questionnaire to help the reader determine his risk profile. I think the questions are, for the most part good and perhaps useful to the novice just starting out. My personal question regarding this part of the book is how the author came up with these questions. If he developed them himself, then in what way is he qualified to come up with these questions? Perhaps he could answer that as a stock broker, part of his job was to assess the risk profile of potential clients. Or maybe, he collaborated with a qualified psychologist to arrive at these questions and the personality assessment based on the answers to the questions. Either answer, or perhaps another would satisfy me. It would just be nice to know. By the way, I fit the high risk profile.

After determining whether you are a high risk kind of guy or more conservative bettor, the author then offers potential strategies and angles one can use which fit the profile. Again, what I liked about these offerings for both the aggressive and conservative player is the simplicity of the methods and the clear straightforward manner in which the methodologies may be applied. I do have some basic disagreements some aspects of the approaches the author uses, especially those that would require me to carry a calculator to the track. But that is only to say that there is more than one way to skin a cat, not to disparage the methods the author proposes. There is my perpetual quibble that I would like to see some statistical documentation that these methods are actually profitable, but maybe that is asking too much.

The author offers a list of tracks that he suggests are good for either long shot or conservative players. I'm not sure about how accurate this chart is, particularly after the Uber chalky Saturday I spent at Calder on Saturday. And many of the races at Gulfstream with its emphasis on 3 year olds and horses coming of their late fall early winter layoffs can at times be quite inscrutable leading to frequent box car payoffs.

The author discusses money management. Good for him. More authors should discuss money management. Barry Meadows suggested using the Kelly Method to determine bet size and, for my money, this is the method that has always made the most sense except for the fatal flaw that it required me to use a calculator at the track. I found that I was spending most of my time figuring out bet sizes and not really enjoying myself. The author discusses progressive betting methods where the player bets more money on each successive race after a loss until the player finally wins. The problem is, if the player doesn't win soon enough, he goes bust. The author kind of hedges his position on progressive betting sort of saying he, "is not a big fan of progressive betting in general, but the Fibonacci sequence is certainly my favorite method....." I'm not quite sure if he's fer or agin it.

I did like his Dutching section and in fact I used that method in my Preakness bet. Unfortunately for me, for dutching to work, you still have to have the winner. I don't usually dutch, as a rule, but somtimes I find it a useful tool, particularly if I have two longshots in a race I feel good about. The section on dutching, if you are not familiar with the technique is very useful. Personally, I tend to be a flat bet wagerer although I will occasionally vary the size of my bet depending on odds, mood, or confidence in my handicapping of a particular race. The author states that flat betting does not take full advantage of the conservative betting methods he suggests, but then I am not a conservative better and will tend to put more money on longshots than my short priced overlays.

The last chapter, discussing finding value in exactas is very useful, particularly for new players. Unfortunately for me, I'd have to take a calculator with me again. For me, if at least one of my contenders is an overlay, then I'm good to go. I know that this is not always a reliable method for finding value in the exacta pool, but its close enough for me to work with. However, the author is technically correct and one should at least pay attention to the exacta payoffs to determine if the pay out is really worth the risk. I do wish that the author would've discussed value in more depth in other parts of the book.

In summary, while I do have some quibbles and disagreements with the author such as I have already discussed. I did find the book to be a worthwhile read. There is a saying, attributable to Benjamin Graham, I think,"Buy when there is blood in the streets." Or, to put it another way, when everyone is jumping on Smarty Jones or Big Brown in the Belmont, maybe its time to look for a little value elsewhere. I think the author gives a unique perspective and offers some good solid advice. If I ever find a book where I agree with everthing in it, I'm goin to go have my head examined. To me the great thing about racing is everyone is entitled to their opinions and beliefs and furthermore, they can put their money on it.

So in closing, buy the book. The price is reasonable and you definitely will learn something from it.

Florida Derby Week

The Florida Derby is Saturday and the weather is expected to windy but dry and maybe a little on the warm side. I suppose it will be no surprise to reveal that most of the attention in the 9 horse field will be on Quality Road, Theregoesjojo, and Dunkirk. Pletcher has also entered as an uncoupled entry the winless in one attempt Europe. Doubtless Europe is there to be offered as the sacrificial horse to ensure the late running Dunkirk has an honest pace to run at.

In case you're wondering, Dunkirk may need the help of a rabbit if the track runs like it did today. I've been wondering how all the rain we had last week would effect the course. In general the track has been favoring speed, but after entering the times and beaten lengths in my track profile, I'm surprised the Hallandale Beach Police weren't out by the quarter pole with a radar gun writing tickets. We'll see if the speed bias continues until Saturday.

Speaking of bias, the ongoing saga of J. J. Tuttle continues. He sent me an E-Mail last week to boast that my review of his book was going to be taken down and so it was. After I vigorously protested this move to Amazon threatening to rain down upon them all my blogging and racing connections, they saw fit to reinstate my review.

I don't think I've been unfair to Mr. Tuttle. In fact, in the interest of fairness, here's an update on the long shot-short field angle. To date at the Gulfstream meet there have been 121 races meeting the criteria of 7 or fewer horses including one on Saturday won by the 4/5 longshot Nistle's Crunch. Tee hee. That last one was a two horse match race due to scratches caused by the weather. The favored It's Never Too Late was 1/2.

Of those 121 races 7 have been won by the longest shot in the field. For the mathematically impaired, that's a 5.8% hit rate. If you have bet two dollars on the longest shot in the field in every one of these qualifying races you would be ahead $107.60 with an ROI of $0.46. In addition your average winning odds would be 28/1 even with the 4/5 long shot. There, now how much fairer can I be than to report favorably on an angle given me by the author of a book I panned, and still do.

That's all for now

Equal Time

A post or two ago I posted a review of Joseph J. Tuttle's book,"The Tuttle Way: Applied Methodologies On "How To" Interpret The Racing Form From A Winning Horseplayer". I also posted the same review on Amazon.

Now I have no desire to get into an internet shouting match, but I would like for you to read the authors response to my review. I'll let you, dear reader, be the judge.

joseph tuttle says:

Sir,

Evidently, you don't very much care that you're my only 1-star review; you only feel this insatiable need to "be heard"!!! Even though the long-winded nature of your review absolutely screams "COMPETITOR", or at the very least a friend of one. This is still America, and you're entitled to your opinion. But, that good sir is pretty pathetic, in my humble opinion. Have you even tried to put my methodologies to work? There's a very old saying professor...."Don't knock it, until you try it!" I make quite the comfortable living wagering on horses and/or sports. And, I've done so for almost 17 years! Go to www.thetuttleway.com to see my immense 152IQ at work, or to see that my #1 strength is my accessibility.

Below, is my home phone number, I would be more than happy to help you understand any/all of my theorems.

One more thing..... YOUR READING COMPREHENSION SKILLS ARE QUITE LACKING!!!!! I said that 90% of horses "switch leads" instinctively, OUT OF NECESSITY! The ones that are able to do it "on command" are the classy ones. You literally reworded my text, and on the basis of that alone I could have your review removed, but I won't.....BECAUSE, I HAVE CLASS!!!!!

Phone no. removed to protect Mr. Tuttle's privacy....Feel free to call me, if you dare, since you're also in Florida!

p.s. My Father was a harness horseman (primarilly), and died at age 83 in June of 2005. He wasn't famous, at all, and I certainly would hope that you might not be able to find anything on him, at google.

Signed,
Joseph J Tuttle

Now, the interesting thing is, I have twice spoken by telephone with Mr. Tuttle and he has since sent me about 5 of his books by PDF file. Actually, Mr. Tuttle was quite genial over the phone and it was a pleasure discussing his books and ideas. I look forward to many more meetings of mind with Mr. Tuttle.

Book Review!!!

Since I've finished with the Thursday past performances for Fair Grounds and Golden Gate Fields and the Saturday Gulfstream Park PP's are not yet available, I have a little time for another adventure into the world of book reviews.

But first, you will notice a little addition on the left side of the page. I occasionally offer opinions on the outcome of races and decided, in the interest of full disclosure, you the reader should know how much my opinion is worth.

Now, if I may toot my own horn, I told you I love to play the Fair Grounds and came through with two winners out of three races. Out at Santa Anita, I didn't fare so well. I, like many others I've come to learn, thought I could beat Cowboy Cal. Well, I didn't, so sue me. No wait a minute, don't do that!

Todd Pletcher is one of the more confounding big name trainers for me. Don't get me wrong, I love Todd. He even posed for my wife at Gulfstream a couple of weeks ago. That picture is in a previous edition. However, it seems I'm always on the wrong side of the bet when it comes to Mr. Pletcher. If I try to beat him, he wins. If I jump on his band wagon, he's up the track and out of the money. Do you have anyone like that? Of course you do.

Now on to the review.

Today I take a critical look at "The Tuttle Way: Applied Methodologies On "How To" Interpret The Racing Form From A Winning Horseplayer" by Joseph J. Tuttle

In the beginning of the book, Mr. Tuttle seeks to establish is bona fides as a horseman by informing us his father, Seymour Tuttle, was involved in the training of horses. Naturally, I promptly did a Google search which came up empty. It's not that I can't take Mr. Tuttle's word for it, but his credibility would be bolstered if I could have found some reference to a Seymour Tuttle within, say the first 5 or 6 pages of 19,900 results. No, I did not go through all 19,900 results, but you may feel free to, if you must.

The 172 page paper-back consists of mostly large type face, which is easy on the eyes. It's also easy on a writer that really doesn't have much to say.

He opens with a brief history of the Daily Racing Form and dwells a lot on the unreliability of Beyer's figures before finally admitting that he does use them. This in itself is not so bad. I agree that Beyer's figures sort of need to be taken in context of class and pace.

Then we come to something I find particularly off-putting as Mr. Tuttle makes the claim that 81% of all races are won by horses that have had 29 to 119 days off. Is this really true? It may well be, but I'm a scientist by profession, so my first question is "What is the source of this data and how was it derived?" Alas there is no answer to this query. The reader is supposed to simply accept this number on faith. He does allow for exceptions such as the Preakness about which he writes,” You can count the number of Preakness winners on one hand, which won that race after skipping the Kentucky Derby, over the past twenty-five years." Note the excessive use of commas in that sentence is the writers.

He tells us a main characteristic of a horse with "class" is the ability to switch leads and that 90% of all horses switch leads instinctively. I know. A wild statistic thrown about with no validation. However, the real issue is, if 90% of all horses do this instinctively, does this mean that 90% of all horses are classy? That's sort of like saying 90% of all people are extraordinary. If 90% of all people are extraordinary, then that is the norm. Rather ordinary I'd say.

Now this is where the writer really loses me as we move into what I refer to as the,"Old wives tales." section of the book. And we're only on page 22. Watch out for those horses with 4 white socks as they are more likely to turn up lame. More prevalent among younger horses according to the author. Horses with prominent,"Blazes and Stars" on their faces will show or have a lot of front-running speed. Mr. Tuttle tells us that many prominent horseman hold to this belief; however, he neglects to name names. I'll have to ask Mr. Pletcher about this the next time I see him at Gulfstream. Oh yeah, I should add this, and you get this for free, always bet grey horses on grey days. That's a sure winning angle...Puhleeze.

Ahem, excuse my sarcasm.

Now in a portion of the book headed as (The Comment Line), Mr. Tuttle says he puts high value on the comment line because it tells you much about the company the horse has been keeping. Then, tangentially, moves onto video tape analysis and some sort of esoteric calculation involving how many horses a horse passes on average per race. I'm telling you, the book is full these rambling sort of right angle turns with no rhyme or reason.

I asked my wife, a natural handicapper in her own right (if only we could merge my analytical nature with her intuitive sense of body language of both people and horses, we'd be unstoppable), to read the 4 page section on "The Comment Line" and tell me what she learned about "The Comment Line". "Nothing", was her answer.

Chapter 3

We learn about his "universal" number, 20. We learn how to use this magical universal number to make the flawed DRF speed figure and track variant better through the use of a seemingly arbitrary constant. Why not seven? Much luckier than 20. Or three? Holy Trinity and all that. I guess Pi would be out of the question since it’s a non-repeating number, how would we know where to stop? Then we take this number and add it to the Beyer's number and divide the sum by 2 and, voila!, we have a new and improved speed figure. I think not.

Enough of this. The remainder of the book is full of similar nonsense and non-validated percentages and general arbitrariness all written in a very disorganized manner. I cannot bear to go on. Suffice it to say I give Mr. Tuttle's effort a firm up the track and out of the money rating. Save your money and pass this book.

I buy these books because I can't help myself. Use my addiction to your benefit and stay as far away from this book.

FYI. In the Jan/Feb issue of the Horseplayer Magazine there is a nice article by Prentice Manetter on playing the pick four. Since I sort of panned his book in my last review, I thought I'd at least give credit where credit is due.