# The Hunt For Value

Value is a topic that is often discussed in betting and yet seems to be the most miss-understood. This post is going to clear up any questions you may have.

The first thing to approach is the question…

Is it possible to make a profit without finding value?

And the quick answer is… no!

There is no possible way you can make a profit from your betting without finding value. But…

…that doesn’t mean that you have to be specifically looking for it.

Let me explain further.

The simplest way of explaining value is to use percentages. The odds a bookmaker, or betting exchange, offer you are a representation of what they think a horses chance of winning a race is.

To work out the percentage chance a bookmaker thinks a horse has of winning a race you simply take the number one, divide it by the decimal odds and then multiply by 100.

If the decimal odds were 3.75 then the sum would look like:

1 ÷ 3.75 = 0.27 x 100 = 27%

The bookmaker is saying they think the horse has a 27% chance of winning this race.

To keep the maths simple lets say that we use a betting system where we only bet on horses that have odds of 3.75, and we make a profit.

If we work out our betting systems strike rate and find it is 32% then we know we have value. Why?

Because the bookmaker is telling us our selections should only win 27% of the time, and are offering odds based on that, but we know we win 32% of the time and so the odds the bookmaker is offering us are higher than they should be.

Have we gone hunting for value? No.

We have inadvertently found value which is why we’re making a profit.

In the past on this blog people have argued that value doesn’t exist or is a concept that has been invented by tipsters, the main point being that you don’t need it to make a profit.

But I’m assuring you this is not the case. If you make a profit from your betting then you have found value, whether or not you realise it!

The problem in my above example is that we don’t only bet on horses that offer odds of 3.75. I know that and I was purely using this as an example to keep it simple.

The bottom line is that nobody knows what a horses chances of winning truly are. It’s not possible, all we can do is make an estimate.

But that’s fine. We just need our estimates to be better than the bookies!

Which is why we look at our data over the long-term. The easiest way to do this is to use averages. Are averages mathematically the best way to do it? Probably not, we can used far more complex and advanced techniques. Are they good enough for what we need? Absolutely.

Over the last month take the average odds of all your selections for a single strategy and then work out the average chance that the bookmakers are saying your horse wins.

Compare this to the strike rate that you have achieved over the same period of time.

If you’ve made a loss then you are going to have a lower strike rate and if you’ve made a profit you will have a higher strike rate.

We can do this over three months, six months, a year or longer. But there is no point in doing it over a single day, there isn’t enough data.

However there is a way that we can determine if we’ve found value over the course of a single day!

Very interesting piece Michael and thank you for it. You have brought up a good point where you mention high odds. In the last 14 days I have had 116 bets with a profit of just over 12 points (10% roi) but if I exclude all my bets over 20 then I have made another 11 points which puts my profit up to 23 points (or 20% roi). Early days yet for me at the moment though. I allow 30% on top of my vfm bets and so far it has worked out ok. Sometimes its hard to leave the shorter priced horses go but it is surprising how often they do get beat.

Best wishes Mark Adams

Thank you Mark and great to see that you’ve already implemented this 🙂

i joind the tips advisor managed serviice after receiving a e-mail from you that all i have received is a load of rubbish information i will give until the ene of the month if it not pick up i will cancell my membership .yours sincerly kennethseabourne@yahoo.com

Thank you for your message Kenneth. Our recommendation was based on over 3 months of proofing the service. You can see all the tipsters we proof at http://www.raceadvisor.co.uk/tipster-proofing/

Michael after reading your blog would you say its not possible to make a profit dutching?

It’s definitely possible to make a profit dutching. In fact it’s one of my favourite bets.

Isn’t it more difficult to find value?

When dutching which is best, sraight forward dutching for an even return on all selections, back your top rated to win and others to break even [ not to lose] or level stakes on all selections, as I have said to you before maths confuses me and I cannot work this out.

Neil

If you’re just starting then simply do a level return on all selections. You can use the Odds Checker calculator at http://www.oddschecker.com/betting-tools/dutching-calculator.html to do that.

When you get more experienced you can start adjusting returns based on the different value each runners odds are offering and their likelihood of winning.

It’s not more difficult to find value, you just need to look at it differently. If you’re creating an odds line then you can take the runners that are offering value and combine their odds to determine the value odds you need for dutching them all.

There’s a lot of articles on the Race Advisor about dutching. Here is a search for them http://www.raceadvisor.co.uk/?s=dutching

Thank you again

Michael

Neil,

Dutching is massively under-rated in my opinion. More often than not there are 2-3 horses in any race that can win so why try to narrow it down to one if you can dutch for a profit?

Dutching is similar to trading in that you can increase your chance of winning by betting on multiple outcomes (horses) but for a lower return. The flip side is that the outlay is bigger!

And there’s the rub.

if you can narrow a race down to 2-4 horses and dutch for a profit, then back them…if not, leave that race alone – there’ll be more and better races later, tomorrow, or the next day.

Eamon

I agree Eamon, dutching is one of my favourite bets. As you say there are very few races where only one horse has a strong chance of winning.

SP is a pretty accurate estimate of a horse’s chance, e.g. even money shots win roughly 50% of the time, slightly less in fact to account for bookmaker margins. With this in mind, it seems to me that beating SP represents value and is the simplest way to obtain it. How can you beat SP? By only betting with bookmakers which offer best odds guaranteed, you will over time have a better average price than the average SP and therefore value. Trouble is, bookmakers quickly restrict punters who take advantage of their concessions and often withdraw the concession (Paddy Power’s favourite), close the account (Chandler, Boylesports and Stan James very quickly adopt this tactic), or simply restrict stakes to ludicrous levels (Bet 365 employ this tactic) so effectively closing the punter’s account. In such circumstances, the alternative is Betfair SP which, whilst not as good as BOG, is a pretty decent alternative. It don’t get any easier for the punter, that’s for sure.

Thank you for the comment, it’s a very good approach and certainly the easiest way to find value Brian. But you can beat SP in other ways as well 🙂

I have suspected for some time festival racing is bad news for punter, great news for bookie, a friend of mine who is an on course bookie has a pitch at one of the Yorkshire courses states, ” to have a pitch at Cheltenham or any of the big festival courses costs a bomb to rent “, of course the need to recoup their outlay, look at how many outsiders won at Cheltenham last year, I really would not go anywhere near these.

Michael is right, stick to the 8-12 runner race, try to find stand out horses that are in with a shout.

It is difficult though, especially when a horse wins for no apparent reason other than it has had 3 bad previous races, dropped down its handicap only to defy the odds and come storming home, this I find to be almost cheating and ripping us punters off.

As far as dutching goes I would say try and come up with a method to dutch the place market, I have a excel calculator in which I enter the place odds for the first 3 or 4 favs, then with the projected winnings from this back a percentage of those winnings on the remainder of horses in the win market….these are at much higher odds.

Sounds great but in practice results are up and down, still looking for that elusive system or strategy, great site, always enjoy a good read here, all the best