SEPTEMBER 16, 2005
Horse Racing and the CIA
by Dick Powell
How much information do you need to handicap a horse race and decide on who to bet? The answer varies, but it might not be as much as you think. Sometimes, less information is just as good, if not better, than more information in your ultimate decision-making process.
In an essay written in 1979 by Richards J. Heuer Jr. called "Do You Really Need More Information?," a study was done on how much information is needed to make an accurate analysis. Heuer's essay appeared in his book, "The Psychology of Intelligence Analysis" which was not declassified until 1999 when it appeared in "Inside CIA's Private World: Declassified Articles from the Agency's Internal Journal 1955-1992."
Heuer referred to a study done by the CIA using eight horse racing handicappers as a way to analyze how much information was needed to make the most accurate judgment. The handicappers were first asked to rank the importance of 88 handicapping factors (weight, distance, rider, etc...).
They were then given the five most important factors to use and handicap a race. Then the 10 most important, the 20 most important and, finally, the 40 most important factors.
The results were startling: three handicappers showed less accuracy when information increased, two showed more accuracy and three others showed no change.
As a group, the eight handicappers did not improve their accuracy when more information was provided and their accuracy actually went down some.
But more importantly, as more information was provided, the handicapper's confidence grew. By the time they were given the most handicapping factors, their confidence had doubled. Their results went down some with more information and their confidence grew, making the gap between winning and losing even wider.
Heuer also references other studies that answer the question of whether we really need more information.
"A series of experiments to examine the mental processes of medical doctors diagnosing illness found little relationship between thoroughness of data collection and accuracy of diagnosis," Heuer said.
The psychology of decision making is what was most intriguing to Heuer. He found that, "Experienced analysts have an imperfect understanding of what information they actually use in making judgments. They are unaware of the extent to which their judgments are determined by a few dominant factors, rather than by the systematic integration of all available information. Analysts use much less available information than they think they do."
The reason Heuer's research found for this is that "individuals overestimate the importance he attributes to factors that have only a minor impact on his judgment, and underestimates the extent to which his decisions are based on a very few major variables...Possibly our feeling that we can take into account a host of different factors comes about because although we remember that at some time or other we have attended to each of the different factors, we fail to notice that it is seldom more than one or two that we consider at any one time."
On Sunday, September 11, Belmont Park's 2ND race was a six-furlong turf sprint for maiden special weight juvenile fillies. There were lots of pedigree angles for the first-time starters and the first-time turfers. A great betting race but not an easy one. And, like most of us, I figured that more information would be the way to solve the riddle.
Bonnie Dares (Arch) was a first-time starter that intrigued me. Unlike many of her rivals, her pedigree was not that strong. Arch is a very good turf sire, but Bonnie Dares' female family was not much.
Yet, she cost $500,000 at Fasig-Tipton this February at Calder; the most expensive Arch juvenile sold this year. I went to the BRIS American Produce Record CD and found that she was originally sold for $22,000 as a weanling, $75,000 as a yearling and $500,000 this year. Her pedigree didn't get any better, but she must have worked up a storm at the two-year-old in-training sale.
This led me to Fasig-Tipton's web site where I found that Bonnie Dares worked an incredible 9.4 seconds for a furlong on the turf at Calder for the sale. This was one of the fastest juvenile sale workouts of all time. Clearly, I was on to something and the extra research I did was going to pay big dividends. With this additional information, my confidence level went skyward.
Had I just stuck to my usual routine, I would have had Bonnie Dares as a contender based on her recent sales price and fast workouts at Saratoga the past month on the turf. But, I also would have paid more attention to the fact that trainer Phil Serpe only wins 5 percent with his first-time starters and 10-pound apprentice rider Julien Leparoux had won three races at Saratoga but they were all going two turns and not in sprints where the start is critical.
The betting public dismissed Bonnie Dares at 14-1, but most of them didn't know what I knew about her training breeze at the Fasig-Tipton sale. More for me and I bet her with way too much confidence.
When the gate opened, Bonnie Dares and Leparoux broke about a half-step slow and was pinched back a bit. Two-year-old in-training sales' workouts are done with a running start and certainly not out of the gate with a 10-pound apprentice rider. Bonnie Dares was pinched back some and wound up chasing the pace while four wide down the backstretch. She was no match for her rivals and finished a well-beaten eighth of nine fillies. If Leparoux rides back next time, I can only back Bonnie Dares going a mile where the 10-pound apprentice allowance will be more important.
The lesson to be learned, and I knew this going in but chose to ignore it, is that the extra information only clouded my judgment. Yes, if Bonnie Dares would have gunned to the front and showed the speed she did last February, I would have swelled with pride for uncovering the extra information. But, I let one factor become dominant in my decision making instead of systematically integrating all the information I had at my disposal.
Thankfully, it was only the 2ND race at Belmont on Sunday and did not involve national security.
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