• Dave Schwartz
    256
    Be forewarned: This is deep reading.
    (But there is simplification at the bottom.)

    Pretty provocative statement, right?

    In my daily reading I ran across an interesting article The Truth about How Creativity Really Works
    (This is not actually about creativity.)

    >>>> If you don't care about the actual articles, just scroll down to CUT TO THE CHASE.

    It begins as an article about John Boyd, a Military Strategist.
    ______________________________
    Within that article, I found this:
    Godel, Heisenberg and The Law of Shitty Clickthroughs.

    Boyd saw that the act of defining reality changes reality.
    ...When you create a new conceptual system, then reality reacts to that system.
    ...In the startup world, one way this shows up is the Law of Shitty Clickthroughs:

    Over time, all marketing strategies result in shitty clickthrough rates.

    In 1994, a display ad might get a 70% clickthrough rate. Display ad clickthrough rates are now in the neighborhood of 0.05%.
    — Taylor Pearson
    ______________________________
    That led to Heisenberg's Uncertainty principle


    CUT TO THE CHASE
    >>>>>


    WHY BACKFITS DON'T WORK
    Any attempts to prove the system is consistent and matches up with reality actually generates even more disorder and uncertainty, and it makes the conceptual system less useful for increasing your capacity for independent action.

    If you try to more accurately figure out the position of a particle, its velocity becomes less predictable (and vice versa).

    Any increase in an attempt to get a more aligned match-up of concept with reality just increases the misalignment and creates unexplained occurrences.

    When we try to force reality to fit our conceptual system, we create what Nassim Taleb has called “black swans”
    — dramatic and impactful events not predicted by the prevailing conceptual system.


    _________________________________
    BUT DAVE, WHAT THE HELL DOES ALL THIS MEAN?
    So, the original thesis was that you cannot know the precise position of a particle and know it's movement at the same time.
    (Stick with me here.)

    If you try to improve the location, the movement will become less predictable.
    If you try to improve the movement, the location will become less predictable.

    HUH?
    What I said was that...
    • you began with a system, method, or even your own seat-of-the-pants approach.
    • Then you tried to improve it.
    • Then you got it working (to whatever degree).
    • And it WORKED (to whatever degree).

    Think of "WORKED TO A DEGREE" as the "RESULT."
    Now think of "RESULT" as a combination of Hit Rate & Price.
    PROFIT is, of course, determined by Hit Rate & Price.

    Then, some weeks/months/years later you noticed that it was no longer producing as well as it was before.

    What comes next is
    "I've got to fix this because it isn't working any more."

    Heisenberg's work tells us that IT WILL GET WORSE when you try to improve it.

    So, what do you do?

    The answer can be found in two steps:
    1. Deconstruct an idea to examine its parts.
    2. Deconstruct it to see what it can be combined with.

    HUH?
    1. Deconstruct an idea to examine its parts.
    Look at the components of the system.
    ("Well, I use mostly early speed, trainer, pace ratings... oh, and the tote board.")

    2. Deconstruct it to see what it can be combined with.
    • Look back at your old approaches, making a list of components.
    • Do NOT try to use just the stuff that seemed to work best. (That will just lower the prices.)
    • Try to add some components that are not supposed to be any good.
    • Spread all these components out on the table (metaphorically).
    • Combine them into a new approach.

    Then go SNOWMOBILING.
    (See link below.)
    ncfg3aiegi7eas0l.png




    Want to Think Like Elon Musk?
  • William Zayonce
    38
    Interesting.. we'll need to discover "Which " components to use and "How" to combine them, perhaps tossing in some "negative enhancement" features ?
  • Dave Schwartz
    256
    Interesting.. we'll need to discover "Which " components to use and "How" to combine them, perhaps tossing in some "negative enhancement" features ?William Zayonce

    That would be the idea.
  • Tony Kofalt
    322
    Thought provoking Dave. I seem to recall you describing 'Whales' going through a similar process each year.
  • Dave Schwartz
    256
    Thought provoking Dave. I seem to recall you describing 'Whales' going through a similar process each year.Tony Kofalt

    Yes.
    I understand that they begin working on it during the summer so that they're prepared to roll it out in January.

    That's why things seem to change from year to year.

    A famous full-time player I use to speak with often, said that for 4 straight years his ROI went down. When he saw it go negative 4 months in a row, he pulled the plug on his racing career.

    He was a mini-whale himself - wagering just shy of $40m per year.
    BTW, he was the only fully automated operation I ever heard of.
  • RanchWest
    457
    Interesting, Dave. This is a topic I don't usually discuss. I don't discuss it because I don't really get jazzed about being called a liar when I am telling the truth. lol

    Back around the turn of the century (sounding like an old codger here), I was having incredible success with the horses...from a win percentage and ROI perspective. I had a decent job, so I considered what I was doing to be long-term research (it would last forever, right?). So, I was not betting much money... very little. This was back when my state still allowed ADW's. This success went on for a few years, maybe 3 or so. I won't tell the level I was at because nobody would believe me. I will say that I was making at least 60 wagers per month, minimum, so it wasn't like I was just lucky on a few wagers.

    Eventually my win percentage dropped about 25% from where it was and my ROI went from unbelievable to a small loss. So, I changed my approach without thinking it through and tanked. Instead of looking for tweaks or even significant tweaks, I leaped into vertical wagers and was not successful.

    I believe I have learned a lot. Horse racing is very complex. Millions of factors and that's before cheating or manipulations are considered. I now believe it is good to look at enough factors to be able to ebb and flow, but not more factors than are manageable. But, as you suggest, I have also learned that the Holy Grail is migratory.
  • Dave Schwartz
    256
    I have also learned that the Holy Grail is migratory.RanchWest

    That quote is worth the price of admission.

    I generally refer to it as "fragile" but perhaps "migratory" is better because it does seem to come and go. And dare I add, "... never to return."
  • William Zayonce
    38
    Although winning methods can exist , which counter balance the effects of "random chance ", the "Holy Grail" cannot exist unless "chance" is completely eliminated.
  • Dave Schwartz
    256
    Although winning methods can exist , which counter balance the effects of "random chance ", the "Holy Grail" cannot exist unless "chance" is completely eliminated.William Zayonce

    Casinos seem to do reasonably well despite the fact that "chance" exists.
  • William Zayonce
    38
    Casinos don't deal in "chance" , that's why they thrive.
  • William Zayonce
    38
    Every payout on every game is lower than what random chance would indicate .
  • Dave Schwartz
    256
    So, you don't believe that card counters can win at black jack?
  • William Zayonce
    38
    When 4vdecks in play and reshuffling at the halfway mark?? No
  • William Zayonce
    38
    What on earth does this have to do with horse racing!? Lololol
  • RanchWest
    457
    Although winning methods can exist , which counter balance the effects of "random chance ", the "Holy Grail" cannot exist unless "chance" is completely eliminated.William Zayonce

    As we discussed recently, a good strategy will counter chance. While perfection will never exist, a reasonable profit is possible. I think sometimes we can be greatly rewarded for finding strange stuff.

    Maybe an owner has a much better win percentage on Tuesday. Maybe that's because the owner is only able to go to the track on Tuesday. We don't have to know that the owner goes to the track on Tuesday and tells the trainer to give the horse its best shot on Tuesday, just that the owner wins on Tuesday. I know this is an extreme example, but my point is that good data usage can really pay off.
  • William Zayonce
    38
    @RanchWest
    I agree that "good data usage can pay off" and serve to counter balance "chance" if we're using "good data". The fact remains that horses,jockeys ,trainers and players all lose more often than they win, by a large margin...that is the "chance" effect from all of the factors that we cannot see or know .
  • RanchWest
    457
    .that is the "chance" effectWilliam Zayonce

    Always remember what Johnny Oates said...Luck is when preparation and opportunity meet. We just have to be prepared.
  • William Zayonce
    38
    @RanchWest
    "I think sometimes we can be greatly rewarded for finding strange stuff."

    I applaud your willingness to consider "strange stuff" , that esoteric or "organic" type of data which can yield positive results.
  • William Zayonce
    38
    @Dave Schwartz
    "Casinos seem to do reasonably well despite the fact that "chance" exists."

    Horseplayers are not casinos. A more appropriate analogy would be that they are "players" in a massive casino that holds a much larger "edge" than the conventional casinos.
  • Dave Schwartz
    256
    I contend that the profitable ones are.

    If you have an edge, you *** ARE *** the casino.
  • William Zayonce
    38
    @Dave Schwartz
    "If you have an edge, you *** ARE *** the casino."
    LoL! What a fanciful notion! Your suggestion would mean that the "highly selective" ,profitable player would have a monetary interest in All of the races rather than just the ones in which they have an "edge".
  • Dave Schwartz
    256
    We've reached the point of diminishing returns here.

    We see the wagering world far differently.
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