NMP betting philosophy
What is value?
As the saying goes, there is more than one way to skin a rabbit, and there are a whole host of ways that punters try and make a profit from betting on horse racing.
Some use trends, others use speed figures or maybe even trainer/jockey stats, but the common denominator amongst all, is that they are looking to develop an edge, something that makes their methods stand out from everyone else and enables them to back horses at prices bigger than they believe they should be - this is essentially the definition of value.
The necessity for a new mindset
Being a value punter requires a different mindset to the normal process of identifying selections and is something that one only becomes comfortable with over time as they have gained confidence and experience in their methods and have produced long-term profits.
When first learning to study form punters, quite rightly, look to identify the most likely winner of each race. That is perfectly acceptable for novices and enables them to learn which factors can point to winners as they develop their understanding of the formbook, but by backing such horses they are typically likely to back a lot of favourites.
In handicap races, favourites win only a third of those races, so straight away the favourite backer learns they need a high strike rate to make a profit. When it is considered that favourites are the most popular runners in a given market (many betting shop punters will back them blindly, simply because they enjoy favourite status and there are even options on betting slips to back the 'unnamed favourite'!) it is quickly realised that its harder and harder to take good prices about such selections.
With most of the money in a betting market wagered on favourites, there are good opportunities for good judges to oppose them and hope to back an alternative choice in what will hopefully turn out to be one of the races that the favourite does not win.
Favourites can be value
It does need to be acknowledged that favourites can still be value and there is nothing wrong at all in backing favourites if that is what floats your boat (I often back favourites on the all-weather as big priced upsets are less frequent than on turf).
By merely participating in a given race, every horse has a theoretical chance of winning the race, the whole crux of value betting is working out what price each individual horse should be (compiling your own book or 'tissue' for a race) and then comparing that with the prices that are actually available with the bookmakers and betting exchanges on a given race - whether that be for the short-priced favourite or the rank outsider.
The value theory then states that you should only back horses that you consider to be value according to your betting forecast. In the long-term, because you are backing horses at odds greater than their 'true' chance of winning, you will grind out a slow, steady profit, and stay ahead of the bookmakers.
More room for error
Whilst it is possible to take value about favourites, it is my personal belief that it is easier to develop an edge looking towards the middle to far end of the betting market, as the majority of money is kept away from this end of the spectrum.
Assume a theoretical situation where two punters (A and B) identify a bet they believe is their best bet of the season. They both place maximum stakes (for the only time that season) on their respective bets. If punter A prices their winning pick up at evens and backs it at 2/1 (i.e. double the price they expected) and punter B prices their winning pick up at 10/1 but takes 20/1 about that particular runner (again, double the price, in terms of raw odds they were expecting), punter B has a lot more room for error with the 'extra' profit they have squeezed out of the bookies.
For example, if both punters normally bet at 1 pt per bet but upped the ante with 2 pt bets on those aforementioned bets in their respective races, punter A has an extra 2 pts to play with (i.e. two bets at his normal staking level) whereas Punter B has an extra 20 points to play with! (i.e twenty bets at his normal staking level).
There is, therefore, the likelihood of achieving some spectacular returns when looking towards the middle to far end of the odds spectrum when the selections do come in at value odds.
Patience is a must
A punter adopting a value approach not only needs to have a keen eye for odds and be able to quickly spot prices that are out of line (if they don't snap up a price out of line, other judges quickly will) they, most of all, need patience in case losing runs are experienced.
In contrast to a favourite backer that experiences short losing runs and regular returns, a value punter may go days, weeks, a even a month before yielding a large return. This is because they are backing what they believe to be the best value in the race, not the most likely winner.
Indeed, they may identify three or four horses as more likely winners of a contest than their own bet, but if they don't believe those shorter priced selections offer value, they will pass over in favour of the value alternative. This can lead to losing sequences where it feels as though the value punter is peeing against the proverbial wind - they may be achieving value prices about their selection (half of the task) but not managing the winners to go with it.
However, the key is not to panic, as if the value judgement is spot on the winners (which seem to follow no set pattern) will return and more than compensate for the losing bets.
A structured staking plan is also a must
Not only does a value punter need to have patience and confidence in their methods to get them through the losing runs, they also need a structured staking plan and betting bank that can accommodate the losing runs and also cash in when the punter is in form and/or identifies what they believe to be excellent value bets.
The size of a punter's betting bank should firstly be determined by the amount of money they could, in a worst case scenario, afford to lose. Once they have put aside a pot of money then then need to break that down to work out an average betting stake.
I personally prefer to use an average stake that is between 1/50 - 1/100 of the total bank - this then means (given my average stake on the flat is 1 pt or 0.75 pt on the AW) that the betting bank can withstand a losing run of 50 losers in succession before it would potentially be wiped out. If the strike rate of returns were to drop off from the normal rate then it naturally follows that the staking would have to be reassessed to try preserve the remainder of the bank.
In terms of a staking scale, I generally bet between a 0.5 pt and 2 pt range, this creates four typical stakes - 0.5 pt win/0.25 pt EW, 1 pt win/0.5 pt EW, 1.5 pt win/0.75 pt EW or 2 pt win/1 pt EW. My maximum strength bets are very rare because there are only so many times during a season that a horse ticks every box in the form analysis and represents outstanding value. Usually a selection will represent slight or quite good value and/or tick most of but not all of the selection criteria, and they will be attributed a lower stake as a consequence.
Some punters prefer to bet to level stakes and whilst I acknowledge level stakes are good for evaluating systems and working out whether a punter is profitable, I am not comfortable, personally, wagering the same stake on every runner - some runners represent better value than others and some have stronger chances of winning than others so these reasons justify having a varied staking plan in place in my opinion.
Conclusion
A summary of the key points intended to come out of this article:
- 'Value' is backing horses that you believe are overpriced and bigger than you believe they should be.
- Any horse in a race can be value, even a favourite
- There is, however, more room for error when looking at outsiders and horses towards the middle of the betting and this can yield some spectacular returns by going against the common opinion
- The typical odds a punter backs at determines the strike rate they need to attain to maintain a profit
- Value punters can experience losing runs as they wait for the winners to arrive but this is more than compensated for when winners are landed
- If the value assessments are correct, in the long-term (i.e several thousand bets or more) big profits can be achieved.
