Racing Forum

Hedging( War Emblem) futures

Posted By: D
Date: 19 May 02, 4:18 pm

In Response To: Ricky, the dark cloulds gather around, but we aren't dead yet. (Fezzik)

You stated, "IMO, it is a myth that most sports bettors go belly-up due to overbetting their bankrolls. Although this can happen, the truth is that most sports bettors lose because they make lots of negative EV bets. Keep making these "no" triple crown type bets, and things are going to take care of themselves despite what happens in the Belmont."

I agree with you 100% :). In the long run- no question.

Now- that being said-- lets look at this specific situation:

You stated, "Whatever you do, don't panic and start betting on the now unltra public horse W.E. to hedge your risk in the Belmont."

Simply because hes a public horse-- doesnt lower his actual value as a horse-- correct? In other words-- every highly publicized 'winner' (not just in horse racing) is going to get a lot of public attention. But- some of it just happens to be well-deserved-- even if by accident. Just a thought.

Now-- hedging futures has been discussed EXTENSIVELY on this site- and the discussion has always been tremendous- and constructive. Let me sum up- what i mainly gathered/learned from all of that discussion (theres a TREMENDOUS thread on hedging- sometime during last NFL pre-season- in the General Forum- i believe).

Three factors come to mind- when attempting to determine whether to hedge a futures bet (all additional comments welcome- this is in no way meant to serve as a comprehensive list- just a thumbnail sketch- of what I keep in mind- when dealing with the situation):

1. Is the 'hedge' a '+' or '-' EV bet- in itself?
2. Has something changed about the bet you've made- since you made it?
3. Is the risk of your originial futures bet-- too much for you to psychologically handle?

Let's attempt to answer these related to the War Emblem situation:

1. The hedge would take the form of a bet ON War Emblem to win the Belmont. It will surely be a -EV bet-- because of the Triple Crown hype. This is the point that you're making- Fez- and you are certainly correct.

2. However-- something has very much changed since the original bet was made. This horse has proven something much, much more- since his Kentucky Derby win. He looked very, very good in the Preakness. This horse handled the pace much better than everyone thought he would prior to the Preakness. Remember- everyone thought that with all the speed in the Preakness- there was almost no way he would be 'allowed' to win. And instead- he won impressively.

3. This point is always debated. Most say-- why did you make the original bet- if you cant handle the risk? I think this is mostly true. But- again- something has changed since the original wager- and those changes not only affect the overall EV of the wager- but can also affect how comfortable we are- with the risk. Don't get me wrong-- this 'contingency' should have been thought about prior to the Preakness- and making the wager (i.e. what happens if War Emblem wins the Preakness impressively? Will i be comfortable having 10k out against him?)-- but none the less- things have changed.

Comments appreciated- as always.

Messages In This Thread

Belmont questions -- ricky -- 19 May 02, 2:38 am

Answers to the easy ones.. -- Sluicebox -- 19 May 02, 8:10 am

a few more answers -- Dunbar -- 19 May 02, 8:32 am

Bid got hurt though... -- StevieY -- 19 May 02, 11:41 am

yep -- Dunbar -- 20 May 02, 3:14 am

added question -- ricky -- 19 May 02, 11:28 am

No -- Rusty Starfish -- 19 May 02, 11:36 am

thanks smartass. (nt) -- ricky -- 19 May 02, 12:26 pm

Not your most important question, but -- Gladstone -- 19 May 02, 1:26 pm

A week isn't enough for horses... -- Burnt Card -- 19 May 02, 1:56 pm

Ricky, the dark cloulds gather around, but we aren't dead yet. -- Fezzik -- 19 May 02, 12:42 pm

don't worry about me -- ricky -- 19 May 02, 1:13 pm

Hedging( War Emblem) futures -- D -- 19 May 02, 4:18 pm

2 & 3 -- ricky -- 19 May 02, 4:38 pm

Reponse -- D -- 19 May 02, 4:47 pm

here we go again :) -- ricky -- 19 May 02, 5:12 pm

Im not the one- -- D -- 19 May 02, 5:39 pm

if you disagree, please respond to this post -- ricky -- 19 May 02, 6:19 pm

Nothing to worry about yet -- patrick -- 20 May 02, 8:20 am

issues and answers -- Dunbar -- 20 May 02, 8:35 am

response -- ricky -- 20 May 02, 9:58 am

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