Finding Value in Horse Racing: “The YoYo”

Perhaps it shouldn't, dear reader, but it came as something of a surprise to me to discover that in winning the St Leger with Mastery on Saturday, Godolphin were taking their first British Classic since the same race five years ago. The value of their stock has seemingly been falling, and it's generally recognised that the St Leger - though still a worthy contest - is the poor relation of the quintet of races that comprise the Classics.

Against this and in stark contrast, has been the almost total dominance of the Coolmore breeding operation. Up until this season at least. This season, Ghanaati (1000 Guineas), Sariska (Oaks), Sea The Stars (2000 Guineas and Derby), and now Mastery in the Leger, has seen the stock of Coolmore diminish somewhat.

Or has it?

The problem with both of these assumptions is that they are made in the microcosmic 'goldfish bowl' of British racing. Horse racing is a more global sport than its ever been, and this is reflected as much in breeding as in racing.

Consider this for example: despite Godolphin's apparent Classic famine, they've actually registered five Group 1 wins in the last SIX weeks! The other four were all in the States and all, incidentally, at Saratoga.

Over the last five years, Godolphin has registered 34 Group 1 wins, only eight of which have been on 'home soil'. Their wins have come as far afield as Sha Tin in Hong Kong, Caulfield in Australia, and both Belmont Park and Hollywood Park on the East and West coasts of the US respectively.

Demise? What demise?!

For Coolmore, theirs is also increasingly a global breeding game, with the likes of Giant's Causeway and Henrythenavigator (not to mention Fusaichi Pegasus) standing in the States; and, Choisir, Dylan Thomas and Haradasun all standing in Australia. This, of course, complements Galileo, High Chapparal, Montjeu, Peintre Celebre et al who stand at the original Coolmore Stud in Ireland.

There's big bucks in breeding, and most of them are not confined within these shores, a fact that is not lost on the bloodstock moneymen.


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Let's go a step further with our value debate now, and consider how we might apply it to betting. It is a commonly known fact that favourites win roughly one in three races. (In fact, over the years 2004-2008, they won on average 29.65%, or just under three in ten races). The average odds of these winning favourites is around the 2/1 mark, resulting in a loss of just over 6% of stakes.

So, in theory, if we could find a group of favourites who won with the same frequency at average odds of 9/4 or more, we'd be able to know we were getting 'value' on the horse.

We have then two considerations: odds and likely winning chance. The closer to the top of the betting market we are, the more closely aligned these two variables are.

For instance, with favourites starting at odds of 1/2 or less, they win roughly 73% of the time, and return a loss of just 2.32% to level stakes. At evens to 11/8, these figures become 42.7% strike rate and a loss of 6.19%. Favourites starting at bigger odds have won less often still, and recorded a higher loss to level stakes.

So even finding a sub-group of favourites by price alone will not enable us to profit. But what about a particular race type. Novice chases, for example, have a notoriously high winning favourite rate.

Indeed, novice chase favourites have won just about 40% of all their races over the last five seasons. But... they still returned a loss of 4.54% on stakes. Despite the apparent discomfort of backing favourites in novice chases (who hasn't heard the saying, "Never take a short price about a favourite in a novice chase"?!), the evidence is contrary to this.

Let's go a step further. Backing novice chase favourites at odds of 1/2 or shorter, saw a win strike rate of 75.86% and almost negligible loss of just 0.81%. Still not quite profitable, but it certainly 'outs' the old adage as absolute bunk.

My point in this is that those who are afraid to take short prices, and who talk about value, omit to incorporate the fact that short prices can offer tremendous value!

For example, on the face of it £30,000 is a lot of money for a car. But if the car was a Ferrari many people would strive to pull the funds together, because of the value.

Another example: if you're anything like me, you'll get this. I've lost count of the number of times I've bought something from the supermarket that I didn't really want or need simply because there was a two for one offer on. I know its sad, but I'm a value hunter to the core!

Our old friend, the 'older horse favourite in sellers' system (see, showed a subset of favourites - in turf sellers, and aged 4 or older - who won at a very gratifying 38.95% and returned a PROFIT of a whopping 40.34% on stakes.

It seems that these horses are underbet because they're considered to be precarious punting propositions (easy for me to say!). And yet, the evidence is contrary.

Of course, as this realisation dawns on the market, so the prices will truncate and - whilst the horses will likely still win at the same rate - their profitability will reduce and then turn into a loss.

This is the 'value yoyo'.

Racing systems have a finite shelf life. Any system that claims to have been fifty years old and successful throughout is either lying, or it is lying...! Quite simply, the market factors such evidence into it's calculations, and a system edge is transient.

That's one of the reasons that Trainer Track Stats is re-released every year: it reflects the changes in training personnel and performance, and as a result retains its currency (i.e. recency) and - therefore - it's ability to generate currency (i.e. folding)!

So, the next time you're looking at a short priced favourite (especially in a turf selling race), don't be afraid to consider the fact that it may very well offer the best value in the entire race - maybe even on the whole card.



p.s. what are your thoughts on value? Add a comment and add to the debate. 🙂

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19 replies
  1. Graham
    Graham says:

    Good points Matt.

    I have to say that I think you have to bet a horse from the first three in the betting or not bet at all. About a 65% strike rate and only three horses to choose from, sometimes four if the betting is close but narrows the field down greatly I think and with the exchanges being so important to the market these days I can only see this win percentage increasing.


    • Matt Bisogno
      Matt Bisogno says:

      Hi Graham

      Its interesting to note those who want to stay at the top end of the market and play in the 65% for the first three in the betting, and those who want to oppose the favourite, where the other 70% of winners come from.

      Essentially, in either case, it is important to consider the prospects in the context of how those types of horses perform. I know this is my banging on about systems again, but really I have no interest in form, and I’ve made a pretty consistent fist of beating the exchanges without that knowledge.

      Know your maths, retain your discipline, and you will have every chance.

      (Incidentally, both the studious top end of the market punter, and the contrarian outsider punter has a chance to win. Take professional gamblers Eddie ‘The Shoe’ Fremantle who habitually backs 20/1+ horses, and Harry ‘Denman’ Findlay who piles into odds on shots on an equally regular basis. Both make their betting pay, because they are extremely selective about the subset of horses they support in their echelon of the market).


  2. Kevin
    Kevin says:

    Hi Matt,

    Nice to read your take on value. This is a massive subject and absolutely relevant to racing today. You will NEVER profit at racing without getting the correct odds for your wager. The margins are so tight between profit/loss that it is crucial to get the odds you want.

    In each race there is only one horse with any value at all and that is the winner, all the rest are valueless. That doesn’t mean to say that if you backed one that came second you didn’t get value. You may well have got a value price on that horse and if you continue to get value prices, then in the long run you WILL profit from racing. This premise relates to both backing and laying bets.

    How you actually find value is the question—-if you can find the answer to that, by this time next year you will be a millionaire (as Delboy would say). Many hypothesis have been put forward on this subject and yet it is still the bookies who get rich. It is a subject that I have been grappling with for the last 6 months and one in which I have my own views and ideas.

    Without going into any detail, I will say that every single horse in every single race, has a value price to back and lay. You will never find any of these value prices at the high street or on course bookies. So I will say that it is totally pointless placing any bets with the high street bookies, you cannot win in the long run. OVERROUNDS RULE. It is just a fact of mathematics.

    There are ways of calculating the VALUE odds for each horse in each race and so you are able to place to your bet with the knowledge that in the long run you will profit. These bets will invariably be placed on the exchanges. If for some reason you cannot get the odds you want, even on the exchanges, then don’t make a bet on that race. Only ever bet if you get the correct value.


    • Matt Bisogno
      Matt Bisogno says:

      Hi Kevin

      Interesting stuff – I’ll look forward to your further thoughts on this subject in due course. For now though, I totally agree regarding bookmakers’ odds. They are almost universally beaten by Betfair odds, so everyone, if you don’t have a Betfair account yet, you really need to get one! 😉

      The point about not making a bet if the price goes against you is very well made, and unfortunately involves the use of discipline, which I know from research is the number one issue most punters have!


  3. bob marsden
    bob marsden says:

    hi matt just a short note to say thanks for haajes and mujood this weekend great ive been backing in sellers since the 1960s always on 1st or 2nd fav they have always been good to me i dont think this is all down to luck i.e if the horse as run within so many days usually when they were placed in its last race i have a punt anyway thanks again bobm

    • Matt Bisogno
      Matt Bisogno says:

      Thanks Bob.

      Yes, Flat Racing Profiles is really showing its class now. It’s an excellent piece of research from David, and I’m delighted to have been able to offer it to so many people this season.

      Hope you’re keeping well,

  4. Eddie Lloyd
    Eddie Lloyd says:

    Morning Matt,

    A spot on post offering value i.e it’s free information and extremly GOOD free information!!

    Just wondering what your thoughts were on a S.A.W system for obtaining profits with the above strike rates. Upon further consideration one might find some rather large stakes being struck but if one kept their profit target to say £5.00 per S.A.W and only bet on say 9/4 or above surely the return would be more than your average high street savings account?

    Just a thought. On another note please let us know how Obvious is handicapped tommorrow. Working in a bookies, I’ve encouraged a few punters to follow him. (hopefully a few more readers for you as well!)

    All the best,


    • Matt Bisogno
      Matt Bisogno says:

      Hi Eddie

      Thanks for your comments, and for passing on Geegeez to others in your shop. Hello to any of Eddie’s customers! 🙂 [Actually, I worked in William Hill for two years when I finished university, before taking a job at SiS. Great days!]

      Regarding SAW, I think that’s definitely an option to consider with high strike rate systems, as their losing runs are usually confined to one or two races maximum. Of course, like any progressive staking approach, you need a cut off point where you just take your medicine (i.e. loss).

      Finally, there’ll be news on Obvious as soon as I have it (and after I’ve shared it with those in the syndicate, naturally).


  5. Richard
    Richard says:

    Your thoughts, as usual, are a pleasure to read, dear Matt. I know that many will be working out how to put them into action even as I write this. However I’m a contrarian by nature and get satisfaction from knowing that after the favourite has been discounted the rest of the field have still a 70% chance of success if you can sort out where the winner is then double figure odds allow much more room for error (you can be wrong 9 times out of ten with 12/1 or better winners and STILL be in profit!!) Find the right race, where the favourite is vulnerable and two or three horses stand out at double figure odds and you even have a better way of making profit from “dutching” them…providing, of course, that one of them wins!

    The most important comment you made concerns the effect of “system followers” on the markets that they affect and should be a warning to all those who display a “herd mentality” in following systems (even proven ones which have MADE [past tense!] a profit) in large numbers to the detriment of the very system they are following. The profit that WAS there will evaporate in front of their eyes and another “guaranteed moneymaker” will bite the dust.

    I am a pensioner and cannot afford to lose ANY money yet get my satisfaction from betting against “the herd” (to small stakes) after studying each race of the day looking for the winner among the unraced (in maidens), off-course for more than 250 days (trained by proven experts at winning with that type of horse) and unfancied (but past winners whose perfect conditions are matched on the day) horses.

    Thanks for all you sensibly write in the interests of we who seek to make profit from the sport of kings!

    • Matt Bisogno
      Matt Bisogno says:

      Hi Richard

      Thanks for your comments. I’m a contrarian too, which is why my own Laying System seeks to oppose fancied horses whose chance is generally overestimated by the market. I have received several emails asking me why I opposed the 4/1 horse who won last time out. The answer of course is that they do win, but only around one in seven races, meaning we can confidently oppose them and ‘wipe our mouth’ that once in the septet.

      On the subject of system popularity, it is for exactly that reason that both Laying System and Flat Racing Profiles sold out. Of course, they’re not physical products, so there was no reason why I should stop selling them, except to protect the ‘value’ for those who were using them (me included!)

      It will be the same with TTS for sure this season, and it’s a pity that not everyone who wants a copy will get a copy this time around. (Last year, Gavin offered it for just a pound and, unsurprisingly, this was a very popular move… with commensurate market implications).


  6. Gordon Mills
    Gordon Mills says:

    A lot is made of value betting (One way or another) and if that is your forte then fair enough, but for me I am more interested in favourites as a whole and how to use a successful staking method to overcome the yo yo effects which come with long losing runs against long winning runs with the emphises being on “Long Losing Runs”

    There are many great Staking methods out there, and somewhere hidden in that jungle of mathematics will be a gem of a staking plan which will overcome the vagaries of short to medium priced favourites to gain over time a near fool proof outcome: The Mathe is already there, its the application which avoids most of us:

    There is far too much BS written about value betting even though it does have a place in the overall scheme of things: The answer lies in the method and application of sound mathematical principles to surpass and overcome the most skeletol periods of betting, thus producing a profit because it can do no other:

    There are the few who have found the knowledge, I just wish I was one of them:

    • Matt Bisogno
      Matt Bisogno says:

      Very interesting Gordon. I must confess to not being a huge fan of staking methods. I don’t say they don’t work, simply that they don’t work for me. And so many of them rely on theoretical staking increments that quickly lead you to require a mortgage to win your liabilities back.


  7. Mark O'Leary
    Mark O'Leary says:

    “the value” in a race isnt neccessarily the 33/1 shoy or the 15/2 shot or whatevere. often its the 2/5 favourite who should be 1/20!! getting 2/5 for a horse who theoretically should be 1/20 seems value enough to me!!

    • Matt Bisogno
      Matt Bisogno says:

      Hear, hear, Mark. And it seems that short ones in sellers are often just such value horses.


  8. Colin Bennion
    Colin Bennion says:

    Hi Matt, since Friday 24th July I’ve been keeping a record of all selling stakes on turf and find 2 year old have given the best return of 16 winners out of 30 races for 53% success rate. I’ve divided all age groups up for separate ratings and overall the ratings are 42/99 at 42.4%. All weather ratings are very similar at 8/18 for 44.4%. I’ve kept an eye on selling hurdles as well and the results are 25/51 at 49%, slightly better. I keep a running record of all these race types and bet according to the average percentage i.e. maximum bet of £25 @ 53% gives a bet of £13.25 @ SP in a 2 year old selling stakes, or for selling stakes 3 y.o.+ on all weather at 4/8 50% giving a bet of £12.50 @ SP. I am nicely in profit since deciding on this format, I hope this is clear and makes sense to you, kind regards Colin.

    • Matt Bisogno
      Matt Bisogno says:

      Hi Colin

      That’s very interesting, especially the point about the selling hurdles. Some of the sample sizes are quite small at the moment, and there is a danger with that in that over time they may prove unprofitable to follow. That’s what I found with 3yo’s in sellers.

      I just had a quick squint at selling hurdle favourites, and this is what I can tell you… Over the last five seasons, they won 28.41% of the time, and returned a LOSS of 5.72% at SP. However, focusing only on those that started at less than 2/1 (i.e. 15/8 or shorter), you’d have won 114 from 226 bets (50.44%), and returned a profit of 27.84 points (12.32%).

      Again, this seems to highlight the point about value. In fact, the shorter the price in selling hurdles, the better the value. As Mark has said, if the horse’s true odds should be 1/4, and you are about to get 1/2, you should pile in!

      (Indeed, to further highlight that, all ten of the selling hurdle favourites who started at shorter than 1/2 won their races. In fact, since 1991 – the start of my database records – 47 of the 56 such jollies won at an incredible 83.93% strike rate. They wouldn’t have made you rich especially, returning just 12.86%, but you’d have had very few dark days…)


  9. Colin Bennion
    Colin Bennion says:

    Hi Matt, Just to update on today’s selections, 2.50 Muss selling Stakes 2 y.o. 53% £13.25 staked 1st SP (3.00) win £26.50
    4.10 Redcar selling stakes 3-5 y.o. 44% £11 staked 1st SP (1.91)
    win £10.01, today’s profit £36.51. I did take 2.10 earlier with Paddy Power for the second bet but have worked out the return at SP. The 2 y.o. selling stakes now has a 55% success rate 17/31, and the 3-5 y.o. selling stakes now has a 50% success rate 5/10, kind regards Colin.

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