Perspective: The True Significance Of Market Fluctuations

August 8th, 2012 | Marten's Perspective

Marten Julian's Perspective HeaderWe live in an age of conspiracy theories … did the men really land on the moon, or was it a studio set-up? – and racing has a fair share of them.
John McCririck never fails to inform us, with more than a hint of suspicion, when a horse is withdrawn from a 16-runner race to a 15-runner race, thereby reducing the place element from four to three runners.

I always take a look at the trainer responsible for the withdrawal, and wonder if it’s conceivable that he or she has been ‘thanked’ for saving the bookmakers a small fortune in each-way bets.

In truth, I think that most unlikely. It may have happened, years ago perhaps, but news would have got out before now were this the case. Someone, somewhere, would have spilled the beans. Perhaps McCririck knows something we don’t. I shall have to ask him about it one day.

There are, though, other areas relating to betting about which I can comment with more authority based on personal experience.

I know, for a fact, that there are occasions when a horse is strongly fancied by connections and yet drifts out in the market to such an extent that even those closest to the horse start to wonder if something has gone wrong.

For example, earlier this year I was watching a race at Southwell on TV which featured a horse with which a close friend of mine is involved. The filly had been prepared for the race, having slipped down the weights to a winning mark, and carried maximum confidence.

The only concerns were that she had never run on the surface and she was drawn wide, in stall 10.

Unable to get to the track, we watched in a state of shock as she drifted out from around 7’2, at lunchtime, to a starting price of 14’1. On the track, in the 20 minutes before the race, she drifted with the bookmakers from around 7’1 to 14’1.

As for Betfair, she touched 20 at one point. My friend was so concerned that he rang his trainer at Southwell to check everything was in order. The trainer confirmed the filly was on very good terms with herself and, by a long way, the pick of the paddock.

Our concern, as the race approached, was that the jockey may have been working to a different agenda. Yet his potential profit from such a course of action would have been minimal, given the low liquidity in the market.

As it turned out he rode the filly precisely to instructions, making all and winning comfortably by over two lengths.

Things could hardly have worked out better, because my friend had put £2,000 on the horse in the expectation of winning about £7,000. Because of the ‘best odds guaranteed’ concession he ended up winning no less than £28,000 – together with snippets on Betfair at odds ranging from 12 to 20.

Had he known the horse was going to start at 14’1 he would probably have halved his bet, if not even less, because that is what people – perhaps erroneously – often do.

Looking back on this case we came to the conclusion that the cognoscenti took the view that the horse, who had been the subject of support before, would not be fancied first time on the surface and from a wide draw. Once the doubts started to creep into the market, then others followed suit.

You get the same thing with horses from recognised gambling yards. For example, if a horse of Barney Curley’s drifts then you see people who want to lay it in the win and place market for anything they can get. The theory is that if today’s not the day, then it will not win.

This is just one example from many I could draw upon. I also recall another occasion many years ago at Taunton, when we went there to back a horse we owned in a selling hurdle. There, before our eyes, it drifted from 11’4 out to 8’1. Again we thought the jockey had been ‘got at’, but the horse was ridden perfectly to instructions and won easily.

These days, with the exchanges opening the market up to both layers and backers, a momentum can build up from very small beginnings. For example, if you happen to know what Tom Segal of Pricewise is selecting then you could make money by trading as his horses are always strongly backed.

There are other influences – tipping services used to be a factor – while, by contrast, if a Racing Post pundit puts forward a short-priced horse as a lay, then again there will be a ‘knee-jerk’ response in the early trading.

However the most important money is placed in the minutes before the race. It only takes a few pounds, literally, to shorten a horse’s price on Betfair overnight, when the liquidity in a race is probably no more than a couple of hundred pounds. These ‘shirt-button’ boys, as I call them, have a greater influence than you would imagine.

This is because the tissue compilers will always take a look at Betfair to see if there are any clues, especially on unraced horses or horses from known gambling yards. It is not like the old days, when first show used to mean something. Even for regular meetings the markets have been busy for the best part of 24 hours beforehand.

This can, though, work in one’s favour. I once worked closely with a very successful backer and one evening he got me to lay his horse on Betfair (something you cannot do now) through the evening and early hours of the morning so the tissue compilers would think the horse was not fancied. I recall that it only took about £300 to force the horse from 5’1 – its correct price – to 16’1. In the morning my friend managed to get an average of about 12’1 in the shops and on his accounts. That would not have happened without Betfair.

So, where does this leave us?

The early markets can, in my view, prove very misleading. For every horse which is backed by connections, there are many that are being supported by opinionated outsiders. In the early stages of the Betfair market – or in the case of a bookmaker who prices up the night before – a few pounds can influence a horse’s price.

My experience is that the ‘proper’ money comes through very late. That is when the on-course bookmakers step in to use Betfair to ensure they have balanced books. It’s never clear whether Betfair leads the bookmakers, or the other way round, but in my opinion late money is the best money.

Here, then, are a couple of hints.

Be wary of supporting any horse which drifts on the place market, especially in a small field. This is the medium the unscrupulous elements of our industry like to exploit if they have reason to believe a horse is likely to underperform.

Do not assume that because a horse drifts in the market that it is not fancied by connections. You may wish to reduce your bet, but don’t let it run unbacked if you fancy it.

Finally, do not be too influenced by the early markets. There is so little liquidity it counts for virtually nothing.
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