||What do you understand as "value"? How do you determine value? (how do you price up an
event, if you don't price one up what method do you use?)
What is Value and how can you use "it"? Value is often discussed as the key premise behind betting. This is
one man's personal "journey":
1) Early Days: I only used to bet when I was positive a horse would win, I therefore felt value was irrelevant. It's going to win so whatever the price is, it's largely immaterial. The odd horse falling used to kill me though. Two fallers / pu/p in a row would mean needing about 4 winners in a row just to break even.
2) A light appears: Making money was like painting a house with a pubic hair. It would be painted in the end but was it worth the effort?. I had to develop my thinking. I began to think the only time price is irrelevant is when the outcome is certain....and...The only time an outcome was certain is when no other result is possible. People just don't offer odds on that. I had to introduce an odds-on threshold to my betting. In horses I set this at 1/4. This felt like a good threshold.
3) Early value: 1/4 was far too arbitrary for me - How can I begin to assess whether a horse at 1/4 is value? I would have to find out the "likelihood of accident". If there was a 25% chance of a horse falling / being pulled-up / brought down / breaking a blood vessel then at 1/4 I would never get an edge as the odds were pretty accurate - and we haven't even taken into account the opposition yet.
I also realised that this threshold was sport specific. In the NBA a whole team doesn't fall or get pulled up. I see DCdude in his drip is setting his lowest odds and is basically operating a "threshold". No matter how good the bet there comes a time when the price doesn't sufficiently cover the "likelihood of accident". In NBA there is the team factor / possibility of food poisoning etc.
4) Value gone mad?: I soon became uncomfortable with the 1/4 shot as, whether you like or not, the opposition does have an effect on a result - even with a 1/4 certainty. The next step was to evaluate the opposition and try to factor in their likelihood of winning. I tried Nick Coton's approach by assigning a point for every danger.
E.g in a 6 horse race there is one horse that could beat it (1 point), a doubt about the ground (1 point) and "the field" (1 point). Therefore my horse was a bet at greater than 3/1 (3 points). The reason being that when the odds exceed the probability you have found yourself a bet (e.g. 11/10 on a coin toss) I found myself betting numerous times a day (rather than 3 / 4 times a week) and making money but the method seemed very crass and I've never been comfortable with low strike rates.
I started thinking
of more sophisticated ways....
5) Camel Coater: I started with the experts. How do the bookies price an event up? Obviously you assess each horses chance and assign a value representing that chance. So I priced up my first race (race obviously unrealistic):