At “Committee Box” level 4 Singapore Turf Club, Hosted by Mr Teng Joo Chee. – Singapore (Kranji) Race Meeting on 03/02/2013

No matter how sophisticated our choices, how good we are at dominating the odds, how good our handicapping is, and it does not matter who we know and who knows us - randomness will have the last word.

When betting on horse racing, we must know that losing bets are part and parcel of betting and we must be mentally prepared for it (bumper harvest as well as drought ). It is best to have small wins to allow us to sustain play, than expecting to hit the jackpot. It is an enjoyable way to make a living if we bet in moderation and it can act as a business that can last a lifetime.

A punter who takes little risk in his betting would have very few disastrous outcomes. And because of that, he also doesn't get wildly rich in a short space of time. But he is wealthier according to the probabilistic method of accounting than someone who has taken a big risk by betting big and have his bet paid off. On the average of lives he could have led, he is extremely rich.

By contrast, the high-risk punter may only make it once in many lifetimes. Even in the lifetime that he struck it rich, there is a high chance of him suffering a blow-up - an unexpected movement in the market which more than wipes him out.

No matter how sophisticated our choices, how good we are at dominating the odds, randomness will have the last word.

The problem isn’t that people don’t reason. They do reason. But their arguments aim to support their conclusions, not ours.

Due diligence

Due diligence, hard work, discipline combine with patience and consistency and the realization of the "right type of thinking" can lead us to achieve a result with a very high probability. Beyond that, it is all randomness: either by taking high, enormous and unconscious risks, or by being extraordinarily lucky. Mild success can be explainable by skills and labor. Wild success is attributable to variance

Courtesy of Aaron Bornstein 07/10/05

Courtesy of Aaron Bornstein 07/10/05

An engineer, a mathematician, and a physicist went to the races one Saturday and laid their money down. Commiserating in the bar after the race, the engineer says, "I don't understand why I lost all my money. I measured all the horses and calculated their strength and mechanical advantage and figured out how fast they could run..."

The physicist interrupted him: "...but you didn't take individual variations into account. I did a statistical analysis of their previous performances and bet on the horses with the highest probability of winning..."

"...so if you're so hot why are you broke?" asked the engineer. But before the argument can grow, the mathematician takes out his pipe and they get a glimpse of his well-fattened wallet. Obviously here was a man who knows something about horses. They both demanded to know his secret.

"Well," he says, between puffs on the pipe, "first I approximated all the horses as identical spheres..."

The sun, the moon, and the truth cannot be long hidden.