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Speaking of gambling, and the Racetrack Betting Book..... I used to go to the
West Palm Beach dog track for fun. While you really are unlikely to come away
from such a place a consistent winner over time, it's fun and there are
important corrallaries to trading. Well, anyway, there was a dog track
betting magazine that I found fascinating.... some guy was writing a series
of articles on a concept called "overlay betting"..... the basic idea that
you wait to bet on situations where the Real probability of your horse/dog
coming is much better than the pari-mutuel betting odds reflect.... EXAMPLE:
1) You determine your horse/dog has a 1 in 3 chance of winning based on your
handicapping, but the payoff odds are 6 to 1, 7 to 1, etc. That's an
Overlay... on the other hand, if the payoff is 3 to 2, even if your horse is
likely to win, the bet is terrible. Again, gambling is so rich with
corrallaries to trading....I'll save you the story about Blushing John and
Sunday Silence at the Breeders Cup.... my proudest overlay bet at the track :)
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