Category Archives: markets

Articles related to quantitative methods of investment into stocks, forex, bonds and other financial instruments

RTÉ Racing: Racing industry saw growth in 2011

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Good news from Ireland on growth in the horse racing industry in 2011.

Bloodstock sales, Tote betting and racecourse attendances produced significant growth in 2011, according to figures issued by Horse Racing Ireland (HRI).

Racecourse attendances were up by 40,000 at 1.24 million compared to 1.20 million in 2010. The average attendance at race meetings in 2011 was 3,682, up 3% from 3,586.

Tote betting was €51.1 million, up 11.3% from €45.9 million, with most of the increase generated by international co-mingling deals.

RTÉ Racing: Racing industry saw growth in 2011.

When Will the Industry Finally Bet On Itself?

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An interesting article from HorseraceInsider commenting on the recent bans in the UK related to laying horses. Does the ability to lay horses on betting exchanges inevitably lead to “fixing” of races more than would be the case otherwise? Fixing of sporting events will go on, where there is money to be made and governing authorities need to make that they take appropriate measures to identify it and have the power to hand out suitable punishments.

Read the full article at HorseraceInsider:

“betting exchanges offer another way of cheating and that’s a fact – anyone can lay a horse to lose. But I think if [exchanges] didn’t exist there would still be people trying to cheat simply because there is money involved…

via When Will the Industry Finally Bet On Itself? | John Pricci Horse Racing Blog | Horse Racing.

Further investigations into horse racing

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Over the last few weeks I have been reading all I can about horse racing handicapping and form. The works of Andrew Beyer, Mark Coton, Tom Ainslie and others alongside more quantitative approaches from the likes of Bausch and Ziemba – have been the mainstay of this background reading. Resulting from this I am starting to reach some questions worthy of further research and can then start gathering the necessary data and build statistical models to help determine which factors look to be the most profitable.

Some primary data will be gathered from the annual form books (Raceform Flat and Jumps books for the years 2009-2010 and 2010-2011) as well as the Racing Post Weekender. It may be that I need data that these publications cannot provide. The US Daily Racing Form (DRF) seems to publish more detailed timings information that UK punters are unable to enjoy.

And a possible fly in the ointment is the recent ‘guidelines’ from BHA about use of the whip, which are likely to have an effect on the way some races are run. Top jockeys may not ride where the risk of a 5 day ban puts a big pay-day at risk – and in some jumps races there may be no finishers. Let’s hope that sense prevails and sometime soon – otherwise I may have to change tack and look at another betting market completely.

Plummeting and rocketing share prices

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The recent turmoil in the stock markets round the world shows little sign of ending any time soon. I’m not sure how automatic trading systems can cope with such high volatility. Whipsawing in fairly normal trading can be an issue – now it’s a whole new ball game. Probably best to be in cash and stand on the side lines and hope sanity returns.

The ongoing Euro crisis needs to be resolved soon. Either the Germans need to throw loads of money at Greece – or Greece needs to leave the Euro and sort itself out. Ongoing death by a thousand cuts is not going to resolve the problem and allow any sort of stability to emerge.

Interesting times!

Fortune’s Formula

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I am currently reading “Fortune’s Formula” by William Poundstone. The tagline is “The untold sory of the scientific betting system that beat the casinos and Wall Street”. I was put onto the book after reading Bellos’ book “Alex’s Adventures in Numberland” in which he discusses the card counting method (at Blackjack) of Ed Thorp, with which Thorp was very successful. Thorp has since gone on to be a very successful investor, having made more than $80 billion in the financial markets. In Bellos’ book, Thorp’s use of the Kelly criterion is described – however, perhaps not in as much detail as Thorp had hoped. Poundstone’s book is referred to by Bellos, and hopefully will provide a bit more background to the Kelly criterion and the practical applicaton of it.

Analysis Platforms

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I have been looking at some tools to help me in my stock investment research. Unfortunately none of them are particularly cheap – and are themselves a significant investment in money and time. The three tools I have been looking at recently are Tradestation, Metastock and Sharescope.

I will mostly be investing in UK stocks using end of day (EOD) data. I’d like to be able to use the tool to screen stocks based on various fundamental and technical criteria, and then to be able to back test a trading system over historic data.

Sharescope doesn’t currently offer a back testing tool - and access to the Sharescope scripting language requires a Plus (£36 per month) or Pro (£95 per month) subscription. On the plus side, Sharescope does seem to get very good reviews as a stock screener – so perhaps a Gold (£18 per month) subscription may be the way to go – and use another tool for back testing.

Tradestation seems to be linked to using the Tradestation brokerage – and has a $95 per month account management charge unless a number of criteria are met. Although the platform looks good – I am not sure that I can meet the criteria.

Metastock EOD Traders Pack seems to get good reviews for back testing and scripting. This would cost £430 including 10 years of historical data and 12 months of LSE data feed.

So, I need to be a successful trader from the off to justify the cost of the tools!

Spread betting?

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I don’t seem to have had any great success with spread betting – however I suspect that it could be profitable if I could find an edge and found the best ways of operating a spread betting account. I think that part of my lack of success in the past has been using too small an account. Not wanting to throw good money after bad, I won’t be doing any more spread betting until I have worked out a system!

Looking at Amazon for spread betting books shows up a list of titles as long as your arm. Fortunately I have a copy of one of the best reviewed titles – The Financial Spread Betting Handbook by Malcom Pryor – so I’ll see what I can learn from it.

This has led me to looking at Street Smarts: High Probability Short Term Trading Strategies by Laurence A Connors and Linda Bradford Raschke. This is a very expensive book to buy, even as a used copy – however the publisher’s website gives a clue as to one of the major systems in the book being based on the ADX (Average Directional Index) technical indicator.

I suspect that anyone who publishes details of their system have probably already milked it dry and now want to make a last bit of money out of it by selling details to would be investors. But maybe I am just an old skeptic!