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The Saratoga Bounce



All things being equal, Saratoga Springs would be just a typical resort town nestled snugly near the entrance to the Adirondacks if it were not for the racetrack that was built here in the 1800's. As it is, the racetrack ensures that all things are most certainly not equal. Kentucky has Keeneland, a track so picturesque that it was used as the backdrop for Seabiscuit's match race with War Admiral in the current movie. Southern California has Del Mar, a beach resort where watching Hollywood's weekend gamblers is as entertaining as watching the horses. Each has its own unique charm, but they simply can't compare to the history and tradition here at the Spa. Saratoga's history and tradition are chief among the reasons I come here.

During the racing season, which lasts a mere 36 days, the small town of Saratoga is inundated with racing fans. If your only familiarity with horse racing is a weekday afternoon at Belmont Park, a cavernous racetrack that sits mostly empty even on the weekend, then it's probably difficult for you to imagine what those 36 days are like. Day in, day out, during the afternoon the track is filled to near capacity. Families with their children set up mini camps behind the grandstand and clubhouse area, near the paddock, while the rails are standing room only when the horses turn for home. If you were new to America and your only experience with horse racing was Saratoga, then you would conclude that horse racing is the most popular spectator sport in America. You would be wrong, of course, but your conclusion would at least have an element of logic to it.

Before I became a technical analyst I was a handicapper/page editor for the Daily Racing Form. See, I graduated from college in 1991 with a degree in philosophy. If you recall, there was a fairly deep recession in 1991-1992 and since none of the big philosophy companies were hiring, I naturally went to work for the Racing Form. Once racing finds its way into your blood it's impossible to get it out, especially if, like me, you refuse to go to court mandated counseling. Relax, I'm kidding about the counseling...your honor.

The similarities between technical analysis, fundamental analysis, and handicapping horses are numerous. As in the analysis of stocks, handicapping can be broken into roughly two separate, though related, camps - the fundamentalists, and the technicians. Not to belabor the similarities but at the track, the fundamental analysts are those who make their selections based on the horse's class, the trainer, the horse's record over the surface and at the distance, their workouts, etc. The technicians on the other hand, focus almost exclusively on speed figures. Naturally, I take the technical approach. Also, like anyone who operates in the stock market, I have a methodology for handicapping horses and I try to exercise my methodology in a disciplined manner.

In a sense, my methodology is based on the charts of the horses. I use Len Ragozin's "The Sheets" speed figures. Ragozin's figures are refined speed figures that theoretically allow a handicapper to identify patterns based on those numbers. It's like technical analysis, except for horses. The idea is to look for patterns that suggest whether a horse is going to run a poor effort (also called a bounce), a medium effort, or a top effort. Sometimes fast horses lose to slower horses simply because the slower horse was ready to run a "good" race while the faster horse "bounced." In my experience the Ragozin Sheets afford handicappers the best possibility of identifying a longshot that other handicappers disregard, perhaps because the horse looks "slow" on paper according to, say, Beyer speed figures, which are widely used and therefore of questionable value in a parimutuel system, or because of some other conventional wisdom.

Tomorrow I'll look at value handicapping and the art of identifying unloved horses with the potential for a turnaround. In the meantime here at the Adelphi Hotel in beautiful downtown Saratoga Springs, I'll be kicking back with a cocktail and scanning tomorrow's race card for opportunities. And like a good trader, my goal will be to win a little, lose a little, sometimes win a lot, but never lose a lot. The rest will take care of itself.

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No positions in stocks mentioned.

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