Daily Speculations The Web Site of Victor Niederhoffer & Laurel Kenner Dedicated to the scientific method, free markets, deflating ballyhoo, creating value, and laughter;  a forum for us to use our meager abilities to make the world of specinvestments a better place.

Home

Write to us at: (address is not clickable)

Department of Connections

3/19/2004
A Turf Handicapper offers lessons from horseracing:

I learned about cardinal rules the hard & expensive way: at the racetrack. The racetrack is flooded with cardinal rules, maxims, laws, precepts, principles, proverbs and prescripts, all of which are absolutely worthless. Behind the horses and jockeys it's an orgy of aphorisms, as if Heraclitus himself woke up and crafted some bizarre incantation to impart and bestow pseudo-pithiness to everyone who has ever crossed through a racetrack turnstile.

Bacon did his best more than 50 years ago to show the uselessness of cardinal rules. Still they persist. This is not a bad thing, at least for those who exploit the public's quest for pithy proverbs. So now that spring has arrived and brought with it the hope of a potential Triple Crown winner, here are just a few of the useless, money-losing track maxims I have paid good money to learn.

• Never bet on a horse to do something it has never done before.   
• There is no more certain way to avoid winning big than to adhere to this rule.
• Never bet a short-priced favorite.
• There is a difference between price and value.
• Class tells.
• Demonstrably untrue, if one would simply look at any day's results charts.
• Pace makes the race.
• Also demonstrably untrue, if one would simply look at any day's results charts.
• Never bet against the track bias.
• Ever-changing cycles.
• Never bet more than you can afford to lose.
• Who are these mythical people who routinely gamble with money they can afford to lose? I sometimes lie in bed awake at night dreaming of a crowded racetrack filled to overflowing with these afford-to-lose people. There is no dumb money quite as dumb as carefree loser money. It must be stated clearly: if you can afford to lose, you will, BY DEFINITION, never win. Winning is the antithesis of losing. You can't have one without the other.

Glen Shaw Comments:
(Ed note: we don't know what it means, but it sounds good) Is this the authentic racing form for the 12 o'clock lunch crowd?? .. Or are they going to let the 1 o'clocked in too and get Bloch..ed ralph. They held after 10:30 though.. triple parked to the outside and didn't break getting back into the pocket feels like I'm riding Seabiscuit on a sloppy track with mud in my good eye here.

3/22/2004
Excerpt from Horse Tradin' by Ben Green: This one too good to wait for final review of book:

"What would you have to have for that team of mares, and let me buy 'em from you "
"Oh, I believe those mares ought to be worth 300". ( testing the market).
"Well I think so too, but I cant give that much for them because I don’t have that kind of money. But I do got some very nice mules here, completely clean of blemishes, clean type. And if you'll take 150 boot, I'll give you the mules and that will give you the 300 ". ( a pairs trade )
"Well it looks to me like you are taking care of your interests a lot better than I am mine, but I guessed it would be okay and I'll swap with you ". ( Don't make him feel you're too anxious)
They visited and gave each other addresses and shook hands. It looked like I mite not have such a hard winter after all ). "

Best story is similar to this . Trading for about 15 back and forths and then the elegant lady's granddaughter becomes a customer. vic