Speaker 1: But knowledge to work and grow your business with c
Speaker 1: i T. From transportation to healthcare to manufacturing. C i
Speaker 1: T offers commercial lending, leasing, and treasury management services for
Speaker 1: small and middle market businesses. Learn more at c i
Speaker 1: T dot com put Knowledge to Work. Hello, and welcome
Speaker 1: to another edition of the Odd Lots Podcast. I'm Joseph Wisenthal,
Speaker 1: Managing editor at Bloomberg Markets. Tracy Alloway, who co hosts
Speaker 1: with me, is off traveling the world today. She'll be
Speaker 1: back next week, so I am all alone. But I
Speaker 1: was really excited about this episode because, as you may
Speaker 1: or may not know, it's about to be Kentucky Derby Day.
Speaker 1: And I think on when the Kentucky Derby Day rolls along,
Speaker 1: maybe the day of the raise or the day before
Speaker 1: the raise, people suddenly try to cram and learn a
Speaker 1: buy about horses. But we're going to get ahead of
Speaker 1: that because today we have David Popadopopoulos, who is a
Speaker 1: managing editor here at Bloomberg, and most importantly this week,
Speaker 1: he is an expert on all things horses, horse racing,
Speaker 1: horse gambling, horse breeding, and we're going to talk to
Speaker 1: him about horses obviously and everything you need to know
Speaker 1: to get ready for this weekend's Derby and the business
Speaker 1: of betting on horses and breeding horses. And so rather
Speaker 1: than just cramming Saturday morning, you're gonna listen to this podcast.
Speaker 1: You're gonna know a lot more than everyone else at
Speaker 1: your Kentucky Derby party. Thanks David for joining us, Thank
Speaker 1: you Joe. And basically what you just said, in other words,
Speaker 1: is that rather than losing your money and having no
Speaker 1: idea how you lost it, you're gonna lose it, at
Speaker 1: least you'll have you know, you'll have given it some thought,
Speaker 1: and then go on to lose your money. At least
Speaker 1: you'll learn something and maybe I'll have a little more
Speaker 1: enjoyable time watching the race. So I've never won money
Speaker 1: on horses. I've placed a lot of bets, not a lot,
Speaker 1: but I've been to races, a bet on the Derby,
Speaker 1: and I'm terrible at it. So we're gonna fix that
Speaker 1: this week. We're certainly gonna try. I mean, the Derby
Speaker 1: is a tough race. If you're just gonna bet once
Speaker 1: a year and you bet the Derby, it's a tough race.
Speaker 1: There are twenty horses on the track. That's more than
Speaker 1: double the size of a typical field and a typical
Speaker 1: race very chaotic. Uh, and just obviously just given the
Speaker 1: the sheer number of the horses out there, you know,
Speaker 1: if you're betting on one or two horses, Uh, it
Speaker 1: could be very tough. And you know the way things
Speaker 1: tend to unfold in these races, horses that often seem
Speaker 1: very logical. Not only may they not win, you could
Speaker 1: all of a sudden, you can see, they could come
Speaker 1: in dead last. That's a that's a common occurrence with
Speaker 1: a race like this. Well, I mean, you know, one
Speaker 1: of the things I was just looking at again just
Speaker 1: to to refresh my memory. You know, we had a
Speaker 1: period of twenty years. For instance, ninth teen, eight to nine,
Speaker 1: the favorite in the Kentucky Derby did not win a
Speaker 1: single one of those races. Um and in some cases
Speaker 1: I'm looking here, they finished twelve six eight. One of
Speaker 1: them did not finish eleven. So you know, it's just
Speaker 1: a chaotic race that How many horses are normally in
Speaker 1: a race you mentioned there twenty and I would say,
Speaker 1: you know, typical size varies, but you know anywhere you
Speaker 1: could have fields as small as five or six or
Speaker 1: you name some cases for a typical typical field be
Speaker 1: eight or ten. Twelve would kind of be a lot.
Speaker 1: So twenty. There's only one time in America in horse
Speaker 1: racing where there are twenty horses on the track for
Speaker 1: a race, and it's the Kentucky Derby. And the reason
Speaker 1: for that is because every owner, every horse race racehorse
Speaker 1: owner in America is dying to say I had a
Speaker 1: horse in the Kentucky Derby. So Churchill Downs really goes
Speaker 1: out of its way to try to accommodate and try
Speaker 1: to had as many owners bring their horses to the
Speaker 1: race as possible. Uh, and you get this stampede of horses. Well. Um,
Speaker 1: before we get into talk about this weekend's Derby and
Speaker 1: the Derby in general, I want to talk really briefly
Speaker 1: about this obsession that I had a few years ago
Speaker 1: related to horses. And it wasn't related to horse bedding,
Speaker 1: but it was something called pin hooking which I read
Speaker 1: about and then I got obsessed with. And that's this
Speaker 1: idea of buying horses at auction and flipping them, selling
Speaker 1: them horses as speculations. Uh. I even thought, you know,
Speaker 1: there was that show Flipped This House, and I thought
Speaker 1: there would be a really great show flipped this horse.
Speaker 1: People who went out to these auctions and bought one
Speaker 1: year old horses or young horses and then tried to
Speaker 1: sell them. Eventually I realized it was it wasn't my world.
Speaker 1: I wasn't living in Kentucky. I didn't have any particular
Speaker 1: reason to be buying horses at auction. But it really
Speaker 1: fascinated me. And while you're here, I wanted to ask
Speaker 1: you about this world of pin hooking, because there are
Speaker 1: different ways to speculate on horses. One is gambling, but
Speaker 1: the other way is some people buy and sell horses
Speaker 1: like commodities. Yeah, no, pen hooking is. Indeed, it's a
Speaker 1: fascinating segment of the market. About a decade ago, I
Speaker 1: I once did a feature story on on the market.
Speaker 1: What it basically comes down to is guys who will
Speaker 1: buy yearlings. Um, it's a one year old. It's a
Speaker 1: one year old horse, a yearling, and they will flip
Speaker 1: them as two year olds. Uh. And it's not even
Speaker 1: a full year. Doesn't even transpire from the time they
Speaker 1: purchased them in the time that they flipped them. Really
Speaker 1: it's about six months. Um. It It's a very volatile market.
Speaker 1: You can have some huge home runs. You know, sometimes
Speaker 1: these guys will buy yearlings for two d thousand and
Speaker 1: managed to flip them for one point six million and
Speaker 1: have some huge score. But then they'll have any number
Speaker 1: of busts along the way, horses that get injured in
Speaker 1: that six month period and never make it to the
Speaker 1: track at all. You know. But what they're basically looking
Speaker 1: to do is, um they are looking you know, in
Speaker 1: the yearling sale when horses are one year old. Um,
Speaker 1: when you go and buy those horses at auction, you
Speaker 1: don't actually see them running. You simply see them on
Speaker 1: a shank, standing or walking. So you know what a
Speaker 1: pin hooker is looking to do. Is he looking to
Speaker 1: gauge the horses balance athletic ability. You know, if you're
Speaker 1: going to flip a two year old. You know, a
Speaker 1: two year old is a very young horse. It's like
Speaker 1: a young teenager. They have to be precocious, they have
Speaker 1: to be fast, and they have to be racy. And
Speaker 1: at one year old, they've never really raised. They've never
Speaker 1: raced before. They've absolutely never raced before, and when they're
Speaker 1: sold as two year olds, they still haven't raced in
Speaker 1: proper races. But at that point they are being trained
Speaker 1: on the track, and all the perspective buyers, before they
Speaker 1: bid on the horses, we'll watch them run on the racetrack.
Speaker 1: So again what they never run when they're one, not
Speaker 1: even like a practice, you know. Uh, they're certainly running
Speaker 1: in the fields, you know, the breeders fields, not running around,
Speaker 1: not on the track. And when you go to these
Speaker 1: these auctions, these yearling auctions, all they'll let you do
Speaker 1: is they'll let them. They'll they'll let you see them
Speaker 1: standing whilst the handlers holding the shank, they let him
Speaker 1: see him stand and walk. So are the people who
Speaker 1: participate in this, these pinhookers, They have to have been
Speaker 1: around for a long time. I mean, because if you're
Speaker 1: going to try to see that a horse has a
Speaker 1: swagger at just one year old and they haven't run
Speaker 1: at all, you need to be able to just have
Speaker 1: some intuition that you can't explain. I mean, the guy
Speaker 1: I spend a lot of time with back then, Buzz
Speaker 1: Chase Um, who just had developed a terrific eye over
Speaker 1: a sixty year period. Right his entire life was around horses,
Speaker 1: and he just developed that eye and he could see
Speaker 1: things that other buyers couldn't see, so he would buy
Speaker 1: them and being able to project six months out, you
Speaker 1: know what that horse would look like. And again, you know,
Speaker 1: it's not an exact science. These guys get any of
Speaker 1: them wrong or you know, horses get injured. They're very
Speaker 1: fragile animals. Um, but the but you know, the model
Speaker 1: is Joe, you need to hit a big home run.
Speaker 1: You need something to flip something in a really big price,
Speaker 1: and that will pay for a lot of the strike.
Speaker 1: It reminds me kind of like venture capital investing in
Speaker 1: terms of you invest in these seedlings or seed rounds,
Speaker 1: and most of them don't work out, and then every
Speaker 1: once in a while you invest in an uber and
Speaker 1: AIRBNBA hopefully and you make up for all the losses.
Speaker 1: And at that early stage, the only thing you really
Speaker 1: have to go on is intuition and pattern recognitions. And
Speaker 1: you know, bringing it back to the Derby, one of
Speaker 1: the things that really allowed the pin hooking market to
Speaker 1: take off was um Bob Baffort, trainer of of of
Speaker 1: American Pharaoh, last year's Triple Crown winner and trainer this
Speaker 1: year of More Spirit. He's the guy that in a
Speaker 1: lot of ways got the pin hooking market going how well.
Speaker 1: He'd picked a horse named silver Charm in he plucked
Speaker 1: Silver Charm out of a two year old sale, and
Speaker 1: Silver Charm the next year would go on to win
Speaker 1: the Kentucky Derby. So that was the first moment when
Speaker 1: buyers said, hey, you know what in these two year
Speaker 1: old sales, you can really find talent, talent that's even
Speaker 1: cabable of winning the Derby. And so as more and
Speaker 1: more buyers went to the two year old sales to buy,
Speaker 1: it created a bigger market for pinhookers to sell into.
Speaker 1: He has a pin hook and this year and he does,
Speaker 1: and and Baffort's got a pin hook. He was not
Speaker 1: the pin hooker, he was the buyer. He purchased at
Speaker 1: the two year old sale for I believe six hundred
Speaker 1: and fifty thousand dollars. Um. Very nice horse. More spirit
Speaker 1: is his name, and he's the lone pin hook in
Speaker 1: this year's uh and this year's Derby. But um after
Speaker 1: Silver Charm one in seven then Monarchos, who was another
Speaker 1: pin hook or if he wasn't a pin hook, he
Speaker 1: was at the very least he was purchased in a
Speaker 1: two year old sale. Those kind of especially those two
Speaker 1: back to back really allowed the thing to take off.
Speaker 1: And that the interesting about Bafford as a buyer, and
Speaker 1: he specifically bought this horse more spirit for these clients.
Speaker 1: Baffort's not a big guy about pedigree, Like he's not
Speaker 1: gonna spend hours and hours contemplating pedigree. He's another guy
Speaker 1: who's got a G eight dies the horses, the horse.
Speaker 1: He's just looking for athletes. Now, of course you want
Speaker 1: some pedigree because if you simply buy an athlete that
Speaker 1: goes on to do great things, if the horse has
Speaker 1: got no pedigree but did great things on the track,
Speaker 1: he's not going to be very attractive as a stallion
Speaker 1: or a study. You're not gonna be able to sell
Speaker 1: him as a stallion. So even like a horse that
Speaker 1: had a great track record, people still want to see.
Speaker 1: I guess that it wasn't a fluke in the that's great.
Speaker 1: So if a horse like California Chrome, you remember, may
Speaker 1: remember from a couple of years ago, almost won the
Speaker 1: Triple Crown. He came from essentially a bad family. He
Speaker 1: basically could have come from the Popadopolis family. I think
Speaker 1: his father was old Yeller. I don't remember who his
Speaker 1: mother was but so even though he won the Derby,
Speaker 1: he won the Preakness, he won all these races, breeders
Speaker 1: weren't knocking down his door to have him come in and,
Speaker 1: you know, and and make him a big stallion offer
Speaker 1: and pay them countless millions. The reason why Joe's yes,
Speaker 1: breeders will assume that in a case like that, he's
Speaker 1: just a freak athlete and a bad family. All right,
Speaker 1: let's let's we're gonna turn our attention to the Kentucky Derby.
Speaker 1: But first let's take a quick break for our sponsor.
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Speaker 1: T dot com. Put knowledge to work. All right, David,
Speaker 1: let's talk about the Derby, But let's talk about Let's
Speaker 1: say someone doesn't do anything about horse bedding. As I
Speaker 1: said in the intro, maybe they pay attention to horses
Speaker 1: one day a year. How do you start to look
Speaker 1: for a good bet to a good horse to bet on,
Speaker 1: or a good wager? What's the framework? Well, you take
Speaker 1: to take a half step back, I would say the
Speaker 1: first thing that you know, most gamblers do, and even
Speaker 1: people who don't have a great sense that they should
Speaker 1: really be looking for value, not simply thing to identify
Speaker 1: the horse with the best chance to win, but looking
Speaker 1: for value. I think they'll typically look out a handful
Speaker 1: of things. Obviously simply whether this horse is winning or
Speaker 1: losing recently in his most recent races, what kind of
Speaker 1: speed figures the horses producing. Nobody looks pretty much at
Speaker 1: raw times. Um most obviously tracks are dirt surfaces. They're
Speaker 1: very affected day to day, hour to hour by rain,
Speaker 1: wind and everything, so you can't look at raw times.
Speaker 1: There are any number of groups. That's why we don't
Speaker 1: hear about like the equivalent of the hundred meter world record,
Speaker 1: because that's correct. It is true. That's Secretariat arguably the
Speaker 1: greatest throb in America of all time to this day,
Speaker 1: has the record in the Kentucky Derby, and the record
Speaker 1: in the Preakness, and the record in the Belmont. All
Speaker 1: those things are true raw times. But generally speaking, you know,
Speaker 1: raw times are are kind of skews to speed figures.
Speaker 1: They're they're a handful of them. They're Andy buyer an
Speaker 1: old Harvard guy's got the buyer speed figures, And then
Speaker 1: there's the is the ragazine sheets and there, and there's
Speaker 1: the brig net and there those well, those are basically
Speaker 1: they take the raw times, but then they figure out
Speaker 1: how they have their own formulas for how fast or
Speaker 1: slow the track is playing on that particular day in
Speaker 1: the which it's it's conceivable that on Tuesday, if a
Speaker 1: horse does a mile, runs a mile in an eighth
Speaker 1: in a minute forty seven, and then three days later
Speaker 1: another horse does that same mile in an eight and
Speaker 1: in a minute fifty, it's conceivable that the mile the
Speaker 1: minute fifty is actually a better figure, is a faster
Speaker 1: time than a minute forty seven, depending how the tracks playing.
Speaker 1: So they'll they'll take all those things into consideration. And
Speaker 1: as a amateur gambler, when I want to see a
Speaker 1: horse's speed figure, what where do I look? And what
Speaker 1: is a good number? Is it lower numbers, higher numbers? What? Right?
Speaker 1: So everyone's got their own system. The most the most
Speaker 1: common sort of the the gold standard, I guess in
Speaker 1: the industry are the buyer speed figures, which you'd find
Speaker 1: in the daily Racing form. And they're big, bold type
Speaker 1: that basically the only number in the racing formats in
Speaker 1: bold type. The higher the better, Uh, you're looking in
Speaker 1: the Derby, typically people want scale. There's no you know,
Speaker 1: there's no set scale. But you know, I think for instance,
Speaker 1: they went and they did, uh they back off top seed.
Speaker 1: For instance, Secretariat's Belmont and I think he got a
Speaker 1: hundred and thirty eight. I think the hundred thirty eight
Speaker 1: is basically the highest you'll ever see. You know, maidens
Speaker 1: horses that have never run in their lives before, you know,
Speaker 1: made you get figures as low as thirty or forty.
Speaker 1: You know. You know, typically Derby winners, before they run
Speaker 1: in the Derby will have done something in the hundred
Speaker 1: range hundred plus um. So, So anyway, so your typical gambler,
Speaker 1: he looks at win loss record, he looks at speed figures.
Speaker 1: He probably looks at the competition the horse has been
Speaker 1: facing recently to give him a sense, all right, has
Speaker 1: he been racing against really good horses or weaker horses?
Speaker 1: And then we'll just you know, most handicappers will will
Speaker 1: put most emphasis on the horses most recent race is
Speaker 1: you know, um recency matters much more than whether a
Speaker 1: horse was doing great things two years ago. And that's
Speaker 1: the way, you know, generally speaking, your average gambler would approach.
Speaker 1: And those are all important initial steps, you know. I think, though,
Speaker 1: if you're really trying to find value, and I was
Speaker 1: just gonna say, if these buyer speed figures are in
Speaker 1: Bright's correct, you're not getting any edge by looking That's correct, Joe,
Speaker 1: to the point, to the extent that you know, honestly,
Speaker 1: in my mind, when I really made up my mind
Speaker 1: that I just like a horse visually, because I will
Speaker 1: break these horses down on film, and I will watch
Speaker 1: them race after races, and I will watch I may
Speaker 1: watch certain portions of the race multiple times when I've
Speaker 1: decided I really like a horse. I like the way
Speaker 1: he travels, I like the way he he takes the
Speaker 1: jockey forward. When that race is over, I'm actually hoping
Speaker 1: he gets a low buyer figure, because a big buyer
Speaker 1: number is gonna gonna attract a lot of attention. It's
Speaker 1: gonna attract a lot of money. But if he gets
Speaker 1: a weaker figure, that's going to sort of scare people off,
Speaker 1: scare other gamblers off. I may still believe in the horse.
Speaker 1: Think it's the point where you say, you're watching horses
Speaker 1: on film that most people should realize they don't stand
Speaker 1: a chance. I mean, like, like there are people out
Speaker 1: there watching film of these horses. That means that the
Speaker 1: one day year gambler really really doesn't they don't have
Speaker 1: a print. All right, let's take it a bit further,
Speaker 1: so everyone sees those same buyer speed rating. You go
Speaker 1: as far, and I imagine others watch film to like
Speaker 1: really size up the horses. You said, Um, you had
Speaker 1: an epiphany at some point in your career to take
Speaker 1: your bedding to the next level. Um, what what was
Speaker 1: that epiphany? I did, Joe. It was probably about a
Speaker 1: decade ago, and I was I was kind of playing
Speaker 1: hockey from work. I think I think I properly took
Speaker 1: it as a vacation day. I'll have to go back
Speaker 1: and check it. And I went to at the time. Okay,
Speaker 1: so it's all on the database. It's all on the database.
Speaker 1: We can go back and check it. Uh. And I
Speaker 1: went up to Saratoga with my father and a buddy
Speaker 1: of his, and I was kind of trying to handicap
Speaker 1: on the fly like most people, and and doing the
Speaker 1: things that I I had walked you through earlier looking
Speaker 1: at you know, when wins loss is looking at speed figures.
Speaker 1: And I was trying to do this for race after race,
Speaker 1: ten races on the day and throughout the day. If
Speaker 1: I zagged, they zagged. I just had it wrong all day.
Speaker 1: I went over ten on the day and I and
Speaker 1: I dropped every penny I bet. I remember walking out
Speaker 1: of there and my father's buddy was giving me a
Speaker 1: hard time. He was kind of just kind of laughing
Speaker 1: at me whatever. I remember just walking out of there saying,
Speaker 1: you know, this thing about trying to chase each and
Speaker 1: every race and trying to handicap on the fly, this
Speaker 1: is for the birds. There's no way, no how, you
Speaker 1: can truly find any kind of value doing this. I
Speaker 1: need to take a much more patient approach. I'm really
Speaker 1: pick my spots, and when I'm gonna bet, really make
Speaker 1: sure that I believe I'm I have an information advantage
Speaker 1: over everybody else. So now when I go to the
Speaker 1: track on a given day there are ten twelve races,
Speaker 1: I may bet one, two, three, zero, depending on what
Speaker 1: I see. And so, you know, it takes a lot
Speaker 1: of discipline. People want to I mean, even if you
Speaker 1: establish that Okay, you really want to pick your spots,
Speaker 1: figure out where you have an edge people, It's hard
Speaker 1: to do that when there's races. It's it's it's it's
Speaker 1: human nature, and especially when you get down. Also, let's
Speaker 1: say I only plan on betting race six on a
Speaker 1: given day, and I bet whatever, fifty dollars, whatever it is,
Speaker 1: and and I lose it instinct, this is sort of
Speaker 1: immediately start looking through the racing forma. Sorry, how am
Speaker 1: I going to bring that back in the seventh race? So,
Speaker 1: as a disciplined gambler, I try to just walk away
Speaker 1: and not do that because at that point then you're
Speaker 1: sort of chasing. You're chasing, Uh, You're you're throwing. You're exactly,
Speaker 1: you're throwing good money after bad. But so the kind
Speaker 1: of ways you can find value in my case, I
Speaker 1: watch a lot of film. Um, you know, film can
Speaker 1: tell you question, where do you get There is that
Speaker 1: online everywhere? There are multiple places you can get that online, um,
Speaker 1: and and they're great. You can get multiple shots. You
Speaker 1: can get the pan shot that everyone's traditionally used to seeing.
Speaker 1: You can get the head on shot, which is great,
Speaker 1: which gives you a lot of you know, a lot
Speaker 1: of different uh insight. UM, So you can do film work, uh,
Speaker 1: you know, to gain value. You can, um, you can
Speaker 1: subscribe to Cocker Reports, guys who are watching these horses
Speaker 1: train each and every morning and they can watch their
Speaker 1: evolution and report to you on their evolution. And it's
Speaker 1: kind of thing. Yes, it's it's accessible to other people,
Speaker 1: but folks tend not to spend the money for it.
Speaker 1: And it can be very insightful because these are, after all,
Speaker 1: agricultural products, right, their horses, right, they go good and bad,
Speaker 1: and so it's very important to know how they're doing
Speaker 1: day to day, week to week. Um. You know they
Speaker 1: are also um, if you were to go to the
Speaker 1: paddock before the race. I mean I'm a big believer
Speaker 1: and being in the paddock before the race and watching
Speaker 1: those horses, and over the course of years and years
Speaker 1: I've learned and read about you know, you know what
Speaker 1: when a horse is giving signs that the horses physically
Speaker 1: really ready to roll, and when he's not so ready
Speaker 1: to roll, And that's just kind of going back to
Speaker 1: the pinhooking something. You just learned to watch the patterns
Speaker 1: over the years, and there's no shortcut on that. Yeah,
Speaker 1: you you do. And also I mean, in my case,
Speaker 1: you know, initially started I probably picked up a handful
Speaker 1: of books on the subject written by horsemen, not not
Speaker 1: by uh not by journalists like myself. But yeah, I
Speaker 1: mean there are certain telltale signs that become pretty obvious
Speaker 1: to you. Like you know, if you ever see in paintings,
Speaker 1: classical paintings, you know, a horse and a painting, you know,
Speaker 1: they always get that really bowed arched neck. And if
Speaker 1: you ever see a horse it's really bowing its neck
Speaker 1: arch neck that is you know what we call like
Speaker 1: a sort of war horse kind of pose. That is
Speaker 1: a very proud, very a horse that's feeling full of himself.
Speaker 1: That's usually pretty good tip off something we're talking about
Speaker 1: before that you uh uh, sort of based on being
Speaker 1: in the paddock. You told me something about how smart
Speaker 1: money is early in the bedding. That's right. Yeah, smart
Speaker 1: money is often early and and it's a great thing
Speaker 1: to watch, not so much on derby day. It's probably
Speaker 1: a little bit harder on derby day because so much
Speaker 1: money is pouring in. But you know, typically in a trainer,
Speaker 1: an owner, the grooms, everybody involved at the horse loves
Speaker 1: the way their horses is doing. They love the way
Speaker 1: he's he's suddenly back eating well, and he's training great,
Speaker 1: and his coat looks terrific, and they love their horse
Speaker 1: this day, and they want to bet on him in
Speaker 1: the paramutual windows, which they're allowed to, which is legal.
Speaker 1: They will typically do that early on in the day
Speaker 1: because when it comes time to saddle the horse and
Speaker 1: for him to run, they're busy. They well, it's it's
Speaker 1: it's they typically, at least traditionally, I've always got that
Speaker 1: done early. So when when when a race is about,
Speaker 1: you know, when the fifth races ended, and now we're
Speaker 1: going to the sixth race, and there's twenty five minutes
Speaker 1: of the sixth race. That first flash of odds you
Speaker 1: see on the board is often very telling. If a
Speaker 1: horse out of the blue that no one expected to
Speaker 1: be the favorite, starts off at two to one. Uh,
Speaker 1: and you can take a look at the wind pools.
Speaker 1: You always want to look at the wind pools. There
Speaker 1: there really a lot of money in that wind pool
Speaker 1: or is it just a little money. And if you
Speaker 1: see that horse that no one expected is starting off
Speaker 1: at two to one and there's a lot of money
Speaker 1: in the windpool, it's a pretty good tip off that
Speaker 1: the barn likes their horse. The insiders, the insiders, legal inside,
Speaker 1: you know, inside information, they have um. Again, they're just
Speaker 1: privy to things that we would not be. Yes, the
Speaker 1: clocker reports can give you a bit of an inclination
Speaker 1: of that for sure. Yes, what you see in the
Speaker 1: paddock can tell you that a little bit as well.
Speaker 1: But they ultimately know this horse in a way that
Speaker 1: we just wouldn't. So, you know, it's always a great
Speaker 1: sign when you see a horse out of the blue
Speaker 1: like that he starts off at two to one, because
Speaker 1: because the barn itself really pounded him, and then he
Speaker 1: drifts two to one, three to one, five to one,
Speaker 1: eight to one. That eight to one when the horse
Speaker 1: when the race goes off, that's the odds. Those are
Speaker 1: the odds you get. All right, let's talk quickly about
Speaker 1: this specific race which is coming up on Saturday. So
Speaker 1: obviously between now and then, no one is going to
Speaker 1: gain the years of experience that you have checking out
Speaker 1: these horses in the barn and so forth. Most people
Speaker 1: are just going to be coming at it. But give
Speaker 1: us your take on this upcoming race and some insight
Speaker 1: that could help the one day year gambler do a
Speaker 1: little better than he might have done here she might
Speaker 1: have done in previous than in previous year. Yeah, so
Speaker 1: a couple of things on that. I mean, one thing
Speaker 1: I would say is that the Derby is traditionally a
Speaker 1: somewhat chaotic event, right, So whereas if you were to
Speaker 1: look at the r o I over an extended period
Speaker 1: of time on the long on long shots in races
Speaker 1: non Kentucky Derby races, just normal races, bending long shots
Speaker 1: thirty one hundreds of one, it's a terrible bet. Decades ago,
Speaker 1: my father ran a very significant study has this, and
Speaker 1: about a decade ago I ran the data as well.
Speaker 1: The returns are just abysmal because they're overpriced because everybody
Speaker 1: wants to bet. It's there's always some pool of money
Speaker 1: out there that's just gonna bet the long shot because
Speaker 1: it looks like it looks cheap. Exactly. It's the dollar
Speaker 1: in a dream kind of thing, and so it looks
Speaker 1: cheap at eighty to one, But Joe, you know what
Speaker 1: at eighty one actually is not perhaps, but in the Derby,
Speaker 1: it turns out, given the fact that there are three
Speaker 1: key elements that make it a chaotic race. You know,
Speaker 1: betting long shots has been pretty good over the past
Speaker 1: twenty years. And so the three elements are a the
Speaker 1: size of the crowd, hundred and fifty thousand drunk Kentuckians
Speaker 1: and other Americans, creating a very boisterous, unnerving environment for horses,
Speaker 1: for animals that are ultimately prey animals, they're very skittish,
Speaker 1: they're very jumpy, they're very nervous, and the big favorite
Speaker 1: of the top five favorites, for all we know, they
Speaker 1: may leave their race on the track before the race
Speaker 1: even begins. They may be so unnerved by the crowd.
Speaker 1: Keep in mind, in a typical Saturday at the at
Speaker 1: racetracks across America, these horses are running in front of
Speaker 1: ten thousand people. So go from ten thousand people to
Speaker 1: hundred fifty thousand people is a big difference. That's one.
Speaker 1: Two is none of them has ever run this distance
Speaker 1: before in their life. A mile and a quarter. It's
Speaker 1: the longest distance. It's hard sometimes to fully project who's
Speaker 1: going to really want to go that far. That's a
Speaker 1: second element that makes it a big chodech. And the
Speaker 1: third element, and perhaps the most important, is with twenty horses,
Speaker 1: on the race track, it's this cavalry charge, it's a stampede,
Speaker 1: and many, many times the best horse will be compromised
Speaker 1: by a bad trip. He'll get slammed into, he'll get
Speaker 1: stuck behind other horses, He'll find himself in situations he's
Speaker 1: never confronted before, and things can sort of lead to
Speaker 1: these bizarre long shots coming up and out of nowhere
Speaker 1: and winning. So, you know, history just shows that you know,
Speaker 1: if you were to if there's a race to chase
Speaker 1: long shots, the Derby is not a bad one to chase.
Speaker 1: The other thing I would just say is if you
Speaker 1: were to sort of practically apply some of the value
Speaker 1: handicapping concepts of this race, I think you could look
Speaker 1: at it through two horses that I'd like to look at, Exaggerator,
Speaker 1: who's probably going to be the second favorite in the race,
Speaker 1: and a horse named gun Runner, who will be somewhere
Speaker 1: midpack in the betting now. Exaggerator on the buyer's speed
Speaker 1: figures scale, got a huge number last time out in
Speaker 1: the Santa Nita Derby out in California. You got a
Speaker 1: one hundred and three buyer, which, if if memory serves
Speaker 1: me correct, it's probably the highest last out buyer of
Speaker 1: any horse in the field. Gun Runner, on the other hand,
Speaker 1: has been running figures in the low nineties, and Exaggerator
Speaker 1: is gonna probably be about six to one eight to
Speaker 1: one as the second favorite, and gun Runner is probably
Speaker 1: gonna be in the fifteenth to one category. Now, the
Speaker 1: thing that you know they keep in mind now that
Speaker 1: the reason why I would say these horses were probably
Speaker 1: fair odds would probably have both of them closer to
Speaker 1: ten to one. So rather than Exaggerator being eight to
Speaker 1: one in gun Runner fifteen to one, I would say
Speaker 1: fair price would be tend to one and tend to one.
Speaker 1: A couple of things play into that. Exaggerators big figure
Speaker 1: in the Santa Nita Derby was largely created by the
Speaker 1: pace of the race. Turned he was twenty lengths off
Speaker 1: the lead eaters. The leaders were flying early, going way
Speaker 1: too fast. They all absolutely knocked themselves out, crawled home,
Speaker 1: and he came flying from behind, and because they had
Speaker 1: softened themselves up so much, he was able to sort
Speaker 1: of just inhale them all and it looked very visually impressive.
Speaker 1: He won by four or five lengths. He got this
Speaker 1: huge speed figure, and he's a nice horse. And I'm
Speaker 1: not saying he can't win the race. He certainly can,
Speaker 1: but that race on paper looks a lot better than
Speaker 1: it actually was. Any horse that's worth his salt that's
Speaker 1: sitting twenty lengths off of a torrid battle upfront, damn
Speaker 1: well better win the race. So that's that's why that
Speaker 1: hundred three buyer and that big win he had is
Speaker 1: going to inflate, essentially, inflate his appearance and attract more
Speaker 1: money than should. Gun runner, on the other hand, as
Speaker 1: a horse who's been only running middling poor buyer figures,
Speaker 1: and people would look at that and sort of be
Speaker 1: driven away, scared off. Having broken this horse down on
Speaker 1: fit home, I can tell you I think forget about
Speaker 1: the speed figures. This horse is just a runner. He
Speaker 1: is tactical. He breaks well out of the gate, He
Speaker 1: sits nicely behind other horses and and does what we say,
Speaker 1: he eats dirt. You know, horses, it doesn't come natural
Speaker 1: to them to sit, to run behind other horses and
Speaker 1: have all that dirt and mud kicked into their eyes,
Speaker 1: their nose, their mouth, And it happens a lot in
Speaker 1: the derby because it's such a big field. He does
Speaker 1: that very easily, very nicely, doesn't seem to bother him
Speaker 1: at all. And he's just a horse that runs very forwardly,
Speaker 1: really carries the jockey wherever he wants to go. And
Speaker 1: in these races which he has been winning and producing
Speaker 1: low buyer figures, he's just been pulled out at the end.
Speaker 1: He's been traveling behind other horses and he's been pulled out,
Speaker 1: you know, as they head into the home stretch and
Speaker 1: he goes by him and the jockey then sort of
Speaker 1: wraps him up and the race ends. And it may
Speaker 1: not be producing really big numbers, but I can tell
Speaker 1: visually watching him, you can tell this horse can run. David,
Speaker 1: this is awesome. I could I could listen to talking
Speaker 1: about this stuff for a long time. And now one
Speaker 1: one of my new life goals. I want to watch
Speaker 1: film with you sometime and see how you break all
Speaker 1: this down. But thank you very much for coming on
Speaker 1: the podcast. And I feel I feel smarter than I
Speaker 1: did half an hour ago, or than I was half
Speaker 1: an hour ago. And I feel like if I were betting,
Speaker 1: i'd feel a little more confident. Excellent show. Does that
Speaker 1: mean you're gonna make any good right? Right? But I'll
Speaker 1: lose money, feeling less stupid. All right, thank you, David,
Speaker 1: Papa Doubulas. I'm Joe Wisenthal. You could follow me on
Speaker 1: Twitter at the Stalwart and David you're on Twitter right.
Speaker 1: I am el Greco. David el Greco, David el Greco,
Speaker 1: thank you very much for listening. We'll be back here
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