Our next instalment of Lose Less kindly provided by the author, John Cutts.
Reviews for the book have been very positive with an overall 4 star rating.
The most important thing…is picking a winner!
CHAPTER 11 – Long Odds-On Shots? The Fastest Way to the Poor House?
There is what can only be described as a prejudice against what are considered long odds-on shots.
Below are the results of backing horses forecast 1-2 or shorter from the start of 2010 to now (November 2021).
Figure 3 – Results of backing forecasts (2010-2021)
As you would expect, the strike rate is very high at 73.93%.
What is most remarkable is that, at SP, we lose only 2.99% on 1845 bets. This is almost break-even, which is amazing at SP and seeing as though received wisdom tells you it is the quickest way to the poorhouse.
If BOG is applied, this is profitable.
The cold, hard facts prove it.
The above table shows what would happen at SP.
The final column on the right is the key as A/E means actual returns over expected returns according to the price – the market.
1 is break even, therefore any figure above 1 is profit, and any below, loss.
Even at SP, we make a profit in 4 of the 11 years. With just a small edge at BOG, every year would have been profitable.
At Betfair SP it loses just 1.32% on stakes over the past 11 years and shows a profit over 5 of the 11 years – including a 22.67 points profit for 2011.
So, why the sniffiness about long odds-on shots? Off that logic you would have admired the brilliant Frankel but never backed him once.
I assume it is the ‘working man’s price’ thing. If the stake is fixed, say a tenner, a 3/10 shot doesn’t look very appetising. And it’s true, backed alone to a tenner’s stake it will make you just 3 quid.
But imagine you backed it with one other horse. A 3/1 shot say, and it wins along with the 3/10 selection. If you backed them both as a double, you have effectively got a return of 52 pounds for the same ten-pound stake – 4.2/1 or 40% better odds.
Or imagine you get a 4-fold that pays 500 pounds. Had you included the 3/10 shot, you would have 649 pounds for the 5-fold.
Long odds-on shots (barring accidents) can enhance the odds of your longer priced winners when included.
Contrary to popular misconception backing horses forecast 1-2 or less in the Racing Post loses far less at SP than any other price band and breaks even or makes a small profit using BOG or Betfair SP.
What’s more the very high strike rate keeps losing runs down and winning runs frequent.
The above tables are for the same period as the others, 2010 to November 2021.This is very much a system to have in your portfolio, especially as bankers in multiples.