I Picked the Last Three Winners………….

As you read from my introduction, my father was a gambler. He taught me many things. He gave me Beat the Dealer as my High School graduation present. To be more precise he was a bookmaker which funded his addiction to horseracing.

Anyway, he told me how he used to buy the mailing list to the Racing form. Clearly these subscribers must also be addicted horseracing enthusiasts. So here is how the scam apparently ran. He would divide the list into six parts that is typically the smallest number of horses in a race. He would mail a letter introducing him as a horse picker extraordinaire. Because he had found this guy was also an expert he was going to give him a “free” pick. So now, 1/6 of the list had a winner. Same thing again, but now 1/36 of the list had a winner. The last letter basically stated I gave you two winners for free; this next pick costs $50. He would take the responses and still do the split across 6 horses. While the remainder was small, then next price was $250! You get the drift.

I am reminded of this every time I get solicitations on stock picks from advisors. Pretty easy to recollect the winning picks and forget the losing picks. Who audits these claims anyway?

1. 628% on a single stock pick! Great, pick a 1000 and advertise one winner,

Who would know?

2. 10 winners in a row!

Whenever I get these claims I cannot help but ask, are they so broke they can’t just buy these stocks themselves? Or maybe they already have? Don’t get me wrong there are credible advisory services, but if you buy track the picks first before you actually trade. It is not a race! There is always a stock pick available.

Similarly, there are something like 8000 fund managers. If you held a contest on coin flipping, I estimate 6 could flip 10 heads in a row. My point is on a statistical basis you can expect someone to end up being a big winner. As I hope you have heard a million times, past performance is no indicator of future performance.

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One Response to I Picked the Last Three Winners………….

  1. Pingback: horse racing picks

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