Cheltenham 2018: Supreme Novices Hurdle Handicapping

It is time once again for our annual attempt to find live longshots to finish in the money in the Supreme Novices Hurdle (G1) at Cheltenham 2018.

As ever, our approach is based on the following premises:

1. Supreme Novices Hurdle is similar to Kentucky Derby - young horses, many 
attempting graded stakes, championship race for first-time with little form in book.
2. Eliminate non-contenders and whatever remains, no matter how improbable, are our selections. 
Horses are only eliminated under one heading even though they may qualify for elimination under 
multiple headings:
    a. Pedigree mismatch to former winners [Sharjah].
    b. Small fields [Slate House].
    c. Poor "Late-Speed" [First Flow, Shoal Bay].
    d. Poor Cheltenham Form [Golden Jeffrey].
    e. Not suited by Going [Saxo Jack, Trainwreck].
    f. Not suited by L-H track [Getabird].
    g. Poor FPR [Khudha, Lostintranslation, Mengli Khan].
    h. Over-exposed form [Claimantakinforgan, Dame Rose, Western Ryder].
    i. Weak "Strength-Of-Schedule" [Simply The Betts].
8. Minimum price 10/1 [Kalashnikov, Summerville Boy].

This leaves Paloma Blue 13/1, Us And Them 33/1, and Debuchet 40/1 as our selections with Kalashnikov 4/1 and Summerville Boy 8/1 only eliminated on price!

Note: Given the limited exposure of all the runners, we are not saying that those we have eliminated are not going to win - simply that they did not meet our criteria for live longshots to run in the money. The key takeaway, as always, is using a process of elimination not selection for identifying contenders.

Kelly And Mutually-Exclusive Outcomes (AvK)

In AvB events, such as baseball, basketball, or football, the general advice to only bet the overlay is technically correct. However, in an AvK event, such as horse-racing, with a number of mutually-exclusive outcomes this advice is not strictly correct. For example, in the following racecard (sorted in decreasing e.v order), even though the handicapper has rated Bravo's win probability (π) at 29%, it is an underlay and not included in the list of bet selections:

h	p	π	e.v	Σ(π)	a.k	b.k	%
Echo	21.00	7.00%	1.470	0.070	0.048	0.977	2.49%
Charlie	5.50	20.00%	1.100	0.270	0.229	0.947	2.78%
Bravo	3.25	29.00%	0.943	0.560	0.537	0.951	0.00%
Delta	6.00	13.00%	0.780	0.690	0.704	1.047	0.00%
Alpha	2.50	31.00%	0.775	1.000	1.104	0.000	0.00%

But, if Bravo's price was to drift to 3.35, then this underlay is now added to the list!

h	p	π	e.v	Σ(π)	a.k	b.k	%
Echo	21.00	7.00%	1.470	0.070	0.048	0.977	2.56%
Charlie	5.50	20.00%	1.100	0.270	0.229	0.947	3.05%
Bravo	3.35	29.00%	0.972	0.560	0.528	0.932	1.18%
Delta	6.00	13.00%	0.780	0.690	0.695	1.015	0.00%
Alpha	2.50	31.00%	0.775	1.000	1.095	0.000	0.00%

Kelly betting is predicated on maximising the logarithm of the handicapper's bankroll over the long-term. But, in the short-term, that goal is translated into not losing specific events when the price is right! The key role played by overlays in mutually-exclusive events is that there must be at least one such betting option available in any event on which we wish to bet. Beyond that, the specific choices will only be governed by maximising the logarithm of our bankroll!

Note: Blindly backing high probability combinations such as Alpha, Bravo, and Charlie (total win probability = 80%) will eventually lead to ruin. In order to calculate the correct stakes, make sure table is sorted by column 'e.v.' in descending order!