Sunday Funnies: Big Brown a sure thing at Belmont

Like Friday in the market, on Saturday lots of people who bet on Big Brown lost alot of money. Regettably for the bettors, their losses were the direct result of an individual's (the Jockey's) choice not to continue competing; not the mysterious movings of market forces.

I fully agree that predictions in both sports & market timing are speculative at best. (see Mr. Sattler's remarkably ill-timed post on Friday) Still when one sees one's team pulled off the field without trying, one has to ask some questions about who is really making money here.

Another interesting point Dan...

What were the betting patterns like and did anybody make big money betting against Big Brown?

HEY!

My post wasn't ill timed, it was an expression of hope!

You know, if we didn't have a quarter million clueless investors dumping stock with their magic stop loss investment widget programs, we wouldn't be seeing these big drops in the market every time a little round of profit taking starts.

I knew damn well that the odds were in favor of a market tank on Friday. GEEES, look at the last year. What's the pattern you see? A downward ratchet, one tick up and two ticks down. You can almost set your watch by it.

I have hope that investors are going to buckle down and stop this foolishness. Wall Street has become the world's largest on line gambling casino. In the mean time, fifty years of national retirement savings are going down the crapper, compliments of myopic, short range thinking which pursues quick profit at the expense of all good sense. The worst part is that some of the biggest investors have been sucked into playing the game.

Go ahead and play those games, feed the shorts. My investments are now in fixed income assets and real property, except for my managed retirement plan which the investment game players have all but destroyed.

Yes, I guess my post was ill timed, but any time is appropriate for reasonable hope.

Wall Street steak is getting cheap and Winnie the Pooh is up to bat.

Sheldon,

I've got absolutely no evidence to suggest that the Belmont was fixed.

& Mr. Sattler's "expression of hope" is welcome and may well be warranted. It is regrettable that he chose to post it on a day the market was tanking.

Clue in, the only way to make money on the Belmont was to bet against Big Brown. Use your head. The jockey didn't throw the race, Big Brown just didn't get in enough training to race after his injury.

Sheldon,

The capricious world of horse racing isn't really that unpredictable and oddly was the place where I learned about randomness, statistics, probability, and the markets in general. My grandfather frequented the tracks in Maryland, Delaware, and Charles Town, West Virginia on a daily basis. I had show horses of much of my youth and I was employed as an exercise rider when I was in high school. I wasn't small in stature but I was able to calm the the most fractious of beasts. One thing I noticed at the track (as a ten-year-old) was that the favorite wins roughly 33-40% of the time and finishes in the money a very high percentage of the time. If Big Brown had won at 1-5 he would've paid $2.20 to win. Also you may have noticed that Big Brown was the first horse that had won the Derby and the Preakness to finish out of the money in the Belmont. Once again a fairly safe bet based on past performances. Basically in 150 seconds you would've garnered a return of ten percent which is fairly good. The problem with horse racing? Unlike the track, unless of course things become totally Enron or Bear Stearns, your stock retains value from day-to-day. A losing ticket is worthless. Trading everyday is akin to betting on every race. Some races, particularly is they're filled with first time starters, (maidens), are very difficult to handicap. Think of them as IPOs. Other horses have more established track records and will generally have better connections, i.e., jockeys and trainers, that help to raise the odds in your favor. Man O' War emerged victorious in 20 of 21 races and Secretariat captured 16 of the 21 contests in which he participated. Extreme examples for sure and you couldn't have become rich betting on Secretariat as he was the favorite in every race except one. Unless of course you were willing to risk extreme amounts of money. Think of that as being overweight on any one particular stock or buying on the margin. A trivia question: Which horse was the only horse to be the public's choice over Secretariat in a race? Linda's Chief. Anyone who made a bet on the winner made about $70 for a $2 dollar bet. The real story here are the people who lost big money betting on Big Brown and because he finished totally off the board that was a factor in the various exotic wagers, (pick threes, exactas, etc. think of them as derivatives), and the large payouts in the place and show pools. I've been to the races once in the past twenty years though I still love to watch the Triple Crown races every spring. I managed to make it to the opening day at Saratoga last year. I loved the atmosphere and took my young daughter on a backstretch tour to see the horses when they were working in the morning.

Why did Big Brown win? Well drugs may have played a role as his trainer, Richard Dutrow, Jr., admitted that he had given him a shot of steroids once a month in the past or he may have simply had bad racing luck and reacted poorly to the heat. Personally, I believe he was given a bad ride by a great jockey Kent Desormeaux. Basically, Kent tried to employ the same strategy for all three races. Wrestle him to the outside, sit three wide, and blast to the front in the stretch. Just like in the market different days and economic conditions call for different strategies. Desormeaux used the same strategy on three occasions. Yesterday he should've let the horse settle and stayed on the rail instead of pulling him up two or three times to establish position. Next he took him to the middle of the track and lost ground. The middle of the track may have been much deeper than the rail and also he let the jockey on the winner control the pace trotting through the half in 48 and change. Much too slow given the conditions. At the head of the stretch Big Brown should've been, based on his time in the derby, eight lengths in front.

I watched the race with my wife and picked the grey horse. I didn't think Big Brown would win because I had questions about his soundness based on his hoof condition and the small number of races he had participated in and the relatively few workouts he had prior to the Belmont.

If the macro-market conditions were more favorable Apple would be at $230 today. If we get the video chat stand by hard chargers because Secretariat has risen again. Sure the American market may be a challenge in the near-term but Apple has a ton of international exposure now. I believe that this entire slow roll-out thing was a part of the plan from the beginning.

Anywho, we find out tomorrow.

Riders up.

Beltway Greg

Wow Greg,

Thanks for taking the time to enlighten everyone.