The Paretto Principle
 

I mentioned in a new thread I started about compiling a ratings system about the Paretto Principal.

Now, I wont bore you because I am sure that everybody knows about it. But briefly this Mr Paretto an Italian mathamatician came up with the theory that 20% of what we do accounts for 80% of our outcomes. Convewrsley it applies also. 80% of what we do only produces 20% of our otcomes or results.

Now, here is my thought. Because so many on here are trying to add one more filter to a system for the Holy Grail what if we did the opposite?

Let's get back to the basics and not overcomplicate things.

If Mr paretto was a race horse punter I wonder what he would consider important in his 20% and what he would put in his 80%.

I could go on but will see if anybody else wants to follow along and add to this little idea. As always these things are not to be taken to seriously but often when discussing things like this little gems or ideas might show up.

Star

There was a brilliant thread on here just soncentrating on the Pareto Principle. I suggest you go and search it andread it. 40 to 50 pages I seem to recollect.

Ah thanks Barny.

40 to 50 pages, looks like my thoughts are not so scrambled. Be interesting to see what genius started that thread and to check who replied. May have underestimated a few on here and some personal apoligies may be in order. lol

Star

There's a lot of information, and a lot of posters contributed. I think the poster was Privateer. He had 7 rules in the 20% category from memory and his No. 1 was Fitness. HJis other 20% rules included Pre-post Price, Ave Prizemoney ..... He researched over a couple of years using hard copies of form guides, and trial information (not sure where he got this from).

It was interesting to see what he included in the 80% ..... some very well known filters.

If you do find the thread it'll keep you busy and out of trouble for a while.

It's a good read .....

Actually, now I think about this, and my recent experiences with my database, the more it makes sense. I've no doubt, as I've said before, there's a fine line, but there's certainly situations that pop up regularly time after time.

Until I got my database I was wary of class related filters, but I'm a convert now, as they do group horses that have a good Win S/R, probably the best filters I've got are class related filters. The "Pareto" thread is very strong on a class filter. I summarised the "Pareto" thread into a system, I might have to revisit it.

I recall his POT was around 25%, so nothing outrageous, and plenty of back up logic to support his findings.

Here's my take on the thread and my assumptions of the 20%

Pre-Post - Fitness - Ave Prizemoney - LS finish - Top 7 Saddlecloth - Place S/R > 60% - Horses backing up within 7 days

He said he had 9 criteria .....

Privateer back 'em 1 Win 3 Place and NEVER bets on a wet track.

Go crazy dudes !!!!!!!!!!!!!1

The most obvious one is horse must be a on pace runner in the majority of its races (1st - 6th on the home turn )

Sorry darkydog2002, but a direct quote from Privateers thread

"FWIW, I do not factor the pace of a race into any method that I apply to punting"

Sorry but I thought you wanted what was vital.
Or just what Privateer thought was important.
Cheers

Yeah, you're dead right. I was quoting as if this was Privateers thread.

Barny, why top 7 saddlecloth? Why not top 6 or top 8? Personally I would never use a filter like this in a system, especially not one of the top 20% of filters.

Here,s another 55- 58 Kg comprise 36.5 % of Races but win 50.6 %.
A huge advantage.

Hi Darkydog2002,

Is this only for handicap races?

In many Set Weight Races and WFA races nearly all starters would have these weights. If these races were eliminated the advantage would probably be greater.

Open Hcps and restricted races.
Cheers

mattio, it wasn't my thread nor my ideas. I'm just relaying the info.

Fair enough mate.

Barny, I have not found it yet but similar posts in the Archives. A made a jest that when told that it had been done before I asked who the genius was in fun.

Having a quick look at some of his threads and replies makes me think what I said in jest has to be taken back because I think Privateer is a serious contributor and his knowledge and thinking have me thinking that here is somebody to follow and study.

Looking back at the old posts I notice that many of the questions I have asked on here have been discussed previously and some in great depth. Also some of the terms I have used have not come from stories here but just things that have popped into my head before hitting the keyboard.

Eg A term I have used often is " SHIFTING SANDS " yet STIX mentions it in a 2007 post saying that he was pleased to see the term because it was very popular prior to this but seemed to have been retired.

So maybe, some of my innane threads are not so, but merely rehashed from the past although unknowingly on my part.

It has been mentioned to me to go back and read all the forum posts from the beginning. Might take me a year, but if some of the gems I have found in some old threads are repeated it will be time well spent.

Unfortunately some people who were contributing to a lot of knowledge were getting abusive E Mails from fellow members hence they no longer post here. In the few posts I have read I cannot fathom why. Maybe the abusers were lobbyist for the Bookies Guild and did not want the Grail to be spread to far. lol

So, if I am a bit quite on here in the future, I wont have absconded just gone mining.

Star

Star,

Having read many of your posts
Have found quite a few somewhat intruiging.

I would be interested to know,
What exactly is it that you are looking for in here,
In a nutshell?

LG

Interesting post LG.

In a nutshell? Now. I know you didnt mean it to be read this way and I understand why you ask. Maybe the nut in the nut shell is me!.

But really, most of what I have written is just my attempt at humour with enough seriousness thrown in to give the opinion I may know something. I am not a person who thinks in black or white. I can see shades of grey in most things and people.

But that does not mean I am wishy washy and have two bob each way on every subject. A lot of the things being discussed here lately are well outside my scope of reference, so if I ask a question or give a reply it is based on my experience over many years.

I have been around this industry for a long time, won a lot in bursts and had it bled from me over a longer period. Our life circumstances change and so does our personality and betting philosphy.

I think , like most people I do not like to get taken to far out of my comfort zone and put blind faith in too many people outside my mentors. I have read a lot and try to incorporate and adapt some things that certain books and authors try to portray.

While when I was reading them Punting was not even in the back of my mind, but it seems a shame that using some principles in life and business should only be restricted there. For example here are a few books in my reference library that may have to be reread just to refocus the mind.

1. Think and Grow Rich

2. The Richest Man in Babylon

3.The Paretto principle.

Now, their are many more but most can trace back their origins to these. Infact one of my favourites was a guy called Doug Edwards. I could really relate to him.

Strangely, I was telling one of my friends about Doug and he said that Doug actually was the mentor of Anthony Robbins in Anthony's early days.

Maybe I digress a bit but sometimes I find Napoleon Hill's advice is pretty sound and his thoughts on ' The Power of the Master Mind" really refer to what this and other non betting forums are about.

Unfortunately, on a betting forum, most contributors are not as sharing like all the other ones I am on.

In one forum I have made some really good friends and a lot of us meet up about three or so times a year. So, you can see I have varied interests.

So, getting back to the point, What am I looking for? I am sure it is not some complicated computer software driven program. Maybe it has taken all these posts of mine to come to the conclussion that what I am looking for is a simplified idea or ideas to mix in with my own so I can dabble and not invest a lot of time and money in a game that has destroyed many.

Napoleon Hill has also said. " What the Mind can Conceive and believe the mind can Achieve " By osmosis, the clarity of thought will come and a plan will be laid out for you providing you follow the priciples and really want and believe that what you fully believe should be yours will be achieved.

He also states " that their has to be a definite purpose " By that he states that if you want and need a certain amount of money you have to define and write down exactly how much and what you are goijng to do in return to receive that sum.

If you truly believe then, by osmosis the means and information will slowly appear which will allow you to achieve your goals. But, whether that works on gambling. I am not sure. Because in life you get nothing for nothing.

So, I guess the Paretto Principle fits in with my philosopy and what else I am looking for is to not go to far outside my present range of experience but to redefine and rejig what I know. " Stick to my knitting " I suppose is another term that fits in well here.

Because I do not want to go to far out of my comfort and reference zone I was really impressed with the thoughts of an earlier forum member PRIVATEER.

It was he who mentioned the Paretto principle I am told. I have not found his thread yet but others have alluded to it. I have seen some of Privateers posts and I feel that he was not to far away from my philosphy. However, time marches on, so what happens in the past may not necessarily apply to the future.

However, here is the rub. In my opinion the formulation of Systems, Ratings and neurals are based on information found in past results, so, like it or not. the question is:

' CAN THE PAST PREDICT THE FUTURE. '

Great post Star.

Very Interesting.

LG

Thanks LG

I really identify with these qoutes.

Cheers.

Morning garyf,

When you say you relate,
In terms of life or the punt?

Cheers LG

Well I'll take 10's on that the SUN will not only rise tomorrow , but will rise within a minute of the same time it rose today.

The Punt.

Cheers.

garyf, do you think profit is still achievable if you weren't able to watch the market before a race?

' CAN THE PAST PREDICT THE FUTURE. '


As far as horses go, what else is there to go on?
Mind reading perhaps?
When punting there is no other way, you must take into account the past, be it performance or non performance.

The NOW can also predict the future,
As in price moves at open and/or just before close?

LG

Putting a bet on without not knowing my return v/s risk,
Is not my way of doing things.


Betting market.
Stock market.
Share market.

If you don't look at the market, any market, how can,
You know if a profit can be achieved before you invest?.

What's your thoughts?.

Cheers.

The 12 Major and 16 Minor Axiomsffice



The book Zurich Axioms contains a set of principlesproviding a practical philosophy and trading psychology for the realisticmanagement of risk. These common sense principles is available everyone and canbe practised anyone - the man in the street and not just the ************.



Although many of the axioms go against the conventionalbelief and traditional wisdom of the investment advice business, those whomaster the meanings and implemented the concepts will be successful - just likethe enterprising Swiss speculators who devised them became rich, while manyinvestors who follow the conventional path do not.



Major Axiom 1: On Risk



Worry is not a sickness but a sign of health. If you are notworried, you are not risking enough



Put your money at risk. Don't be afraid to get hurt alittle. The degree of risk you will usually be dealing with is nothair-raisingly high. By being willing to face it, you give yourself the onlyrealistic chance you have of rising above the great un-rich. Worry is the hotand tart sauce of life. Once you get used to it, you enjoy it.



MinorAxiom I
Always play for meaningful stakes






MinorAxiom II
Resist the allure of diversification.
(Because it forces you to violate precept minor axiom 1.)
(Because it creates situation where gains and losses cancel each other out.)
(Because you end up with too many balls in the air.)






Major Axiom 2: On Greed



Always take your profit too soon.



Sell too soon. Don't hope for winning streaks to go on andon. Don't stretch your luck. Expect winning streaks to be short. When you reacha previously decided-upon ending position, cash out and walk away. Do this evenwhen everything looks rosy, when everyone else is saying the boom will keeproaring along.



The ONLY reason for not doing it would be that some newsituation has arisen, and this situation makes you all but certain that you cango on winning for a while.



Except in such usual circumstances, get in the habit ofselling too soon. And when you've sold, don't torment yourself if the winningcontinues without you.



MinorAxiom III
Decide in advance what gain you want from a venture, and when you get it, getout.






Major Axiom 3: On Hope



When the ship starts to sink, don't pray. Jump.



Learning to take losses is an essential speculativetechnique. MOST never learn it. Take losses at once and move on. Take smalllosses to protect yourself from the big ones.



Beware the 3 obstacles to jumping ship:



Fear of regret (that the loser will turn out to be a winnerwhen you've bailed-out)



Unwillingness to abandon part of an investment (becomewilling to abandon)



Difficulty of admitting you made a mistake.



MinorAxiom IV
Accept small losses cheerfully as a fact of life. Expect to experience severalwhile awaiting a large gain.






Major Axiom 4: On Forecasts



Human behaviour cannot be predicted. Distrust anyone whoclaims to know the future, however dimly.



Nobody has the foggiest notion of what will happen in thefuture. Nobody. Never lose sight of the possibility you have made a bad bet.



Major Axiom 5: On Patterns
The Emperor Axiom






Chaos is not dangerous until it begins to look orderly.



Do not look for order where order does not exist. Do notoverlook the large role chance takes in any speculation. Study information inwhatever speculative medium to improve chances and take your best shot. Staylight on your feet ready to jump this way or that. You are dealing with chaos,as long as you are alert to that fact you can keep yourself from getting hurt.
Internal Monolog goes:
"OK. I've done my homework as well as I know how. I think this bet can payoff for me. But since I cannot see or control all the random events that willaffect what happens to my money. I know the chance of me being wrong is large.Therefore I will stay light on my feet, ready to jump this way or that whenwhatever is going to happen happens."






MinorAxiom V
Beware the historians trap.
The Historian's trap is a particular kind of orderly illusion. It is based onthe age-old but entirely unwarranted belief that history repeats itself. Peoplewho hold this belief - which is to say perhaps ninety-nine out of every hundredpeople on earth - believe as a corollary proposition that the orderlyrepetition of history allows for accurate forecasting in certain situations....Don't fall into this trap. It is true that history repeats itself sometimes,but most often it doesn't, and in any case it never does so in a reliableenough way that you can prudently bet money on it.






MinorAxiom VI
Beware the Chartist's illusion.






MinorAxiom VII
Beware the correlation and causality delusions.





MinorAxiom VIII
Beware the Gambler's Fallacy. (This is my lucky day.)






Major Axiom 6: On Mobility


Avoid putting down roots. They impede motion.



Be ready to jump away from trouble or seize opportunity. Youdo not have to bounce from one speculation to another like a ping-pong ball.All your moves should be made only after a careful assessment of the odds forand against, and no move should be made for trivial reasons. But when a ventureis clearly souring, or when something clearly more promising comes into view,then you must sever those roots and go. Don't let the roots get too thick tocut.



MinorAxiom IX
Do not become trapped in a souring venture because of sentiments like loyaltyand nostalgia.






MinorAxiom X
Never hesitate to abandon a venture of something more attractive comes intoview.






Major Axiom 7: On Intuition



A hunch can be trusted if it can be explained.



Though intuition is not infallible, it can be a usefulspeculative tool, if handled with care and skepticism.



If you are hit by strong hunch - put it to the test. Trustit only if you can explained it. That is only if you can identify within yourmind a stored body of information out of which that hunch must reasonably besupposed to have arisen.



Be wary of any intuition that seems to promise some outcomeyou want badly.



MinorAxiom XI
Never confuse a hunch with a hope.






Major Axiom 8: On Religion and the Occult



It is unlikely that god's plan for the universe includesmaking you rich.



Assume you are on your own. Rely on nothing but your ownwits.



MinorAxiom XII
If astrology worked, all astrologers would be rich.






MinorAxiom XIII
A superstition need not be exorcised. It can be enjoyed, provided it is kept inits place.






Major Axiom 9: On Optimism & Pessimism



Optimism means expecting the best, but confidence meansknowing how you will handle the worst. Never make a move if you are merelyoptimistic.



Optimism can be a speculator's enemy. It feels good and isdangerous for that reason. It produces a clouding of judgment. It can lead youinto a venture with no exits. Even when there is an exit, optimism can persuadeyou not to use it.
You should never make a move if you are merely optimistic. Before committingyour money to a venture, ask how you will save yourself if things go wrong.Once you have that worked out, you've got something better than optimism.You've got confidence.






Major Axiom 10: On Consensus



Disregard the majority opinion. It is probably wrong.



Probably wrong. Figure everything out for yourself.



MinorAxiom XIV
Never follow speculative fads. Often, the best time to buy something is whenno-one else wants it.






Major Axiom 11: On Stubbornness



If it doesn't pay off the first time forget it.



Perseverance is a good idea for spiders and kings, but notalways for speculators. Don't fall into the trap of trying to squeeze a gainout of any single speculative entity.



Don't chase any investment in a spirit of stubbornness.Reject any thought that an investment "owes you" something. And don'tbuy the alluring, but fallacious idea that you can improve a bad situation byaveraging down.



MinorAxiom XV
Never try to save a bad investment by averaging down.






Major Axiom 12: On Planning



Long-range plans engender the dangerous belief that thefuture is under control. It is important never to take your own long-rangeplans, or other people's, too seriously. >



React to events as they occur in the present. Put your moneyinto ventures as they present themselves and withdraw it from hazards as theyloom up. Value the freedom that will allow you to do this. Don't ever sign thatfreedom away.
There is only one long-range financial plan you need: the intention to growrich. The how is not knowable or plan-able. All you need to know is that youwill do it somehow.






MinorAxiom XVI
Shun long-term investments.

I guess technically you can.
Lets say i put 3 bets on the night before,
And i look at the results 24 hours later.
Technically you have won without looking at the market.

But that's not me.

Cheers.

RE POST=31.

iF THEY WIN AT A DIVIDEND GREATER THAN YOU OUTLAY.

Cheers.

Or you can set up a bot and just crunch nos,
By backing and laying is another way i guess.

Cheers.

It is unlikely that god's plan for the universe includesmaking you rich.


The older I get the more I see this is true.

Yes LG, but the strength or lack of it, of money for a horse is determined by how it has been performing, be it recent or otherwise, therefore PAST is king.

What about factors since the last run / rating,
Which remain unknown to us but not to those,
Who place $$$(or dont) on the nose before it jumps?

Eg condition on day of race

This is not about the past - all about the present,
And we can only get a hint of this via the price ie NOW,
Unless we are on track with clear-clever eyes?

LG

Not only that particular horse, but all the others over the years with similar form in a similar events too. HISTORY is the only guide we have.

Spot on B.

I also find it funny today when the boss commented to me about the Carlton v Collingwood match. He ask who I was backing.

I said Collingwood by the form.

He replied but your not going to look at how many times Carlton have won at that ground, the margin last start, the ground condition they played last time, the weight of Chris Judd and Swann. The coach of the sides. You do all this for horse racing.

Are these factors like Win % and Place % that we use iirelevant in more cases than none.

If HISTORY is the only guide we use,
Then we will forever be on the loosing side I feel.

You can forget all about Pareto!

More like 99/1 rule being,
99% of us loose in the long run because the clever 1% leverage off
a. readily available historical information better
b. additional info(=edge) unavailable to the 99%

The only path I see for us to move from 99 - 1% is in the MARKET = price movements which reflect what we know about past events, and what we don't.

Surely it is the BEST guide we have?

LG