As I’ve mentioned at various points along the way, I feel that between picking and betting, betting is the more important skill. The experience of a friend of mine in Pennsylvania inspired me to start talking about this now. There’s a certain mindset that goes along with healthy and successful speculating. Above all, the primary thing that you must realize about speculation psychology is that you get paid to take risks. If I were writing a book about gambling at the races - don’t worry, I’m not - but if I were, I might start it with an introduction that goes something like this:

There is a central reality to all of this. It should be obvious, it would be obvious if but the horse player would for once take the trouble to think it through. The world isn’t interested in showering you with money, nor are the other patrons at the racetrack. The race track owes you nothing. You are paid for betting on the unknown - something neither you nor anybody else can be sure of.

The pari-mutuel pools are a very imperfect mechanism. People bet more with their hearts than their heads. Because a disproportionate minority embrace risk as the common denominator of profit, the risk-takers are paid more than they deserve in a mathematical sense. This is a paradox. The world over-rewards risk taking and under-rewards those in search of certainty. Same with the track. While there is no consistent relationship between the riskiness of a bet and the payoff, it tends to work in favor of the risk-taker.

The so-called "prudent" speculator is usually someone who wants to feel prudent. He achieves a feeling of security and deludes himself by avoiding apparent risk. (An example of this is an over absorption with who is getting the money on the tote board.) But his quest for safety and certainty is in vain, because most seemingly "safe" bets are almost as risky (and sometimes riskier) than those in which the risk is more overt, or apparent. These seemingly safe bets are often full of non-apparent risk and the problem is, that the payoff for doing this doesn’t justify the risk. There are always experts, public handicappers, commentators, etc. who will exaggerate the safety and prudence of certain selections or bets. They pander (innocently perhaps, perhaps not) to the urge of safety and certainty. This happens in subtle ways, such as comments like "Horse A is much better than these" or "should have no trouble with this field." But there is no way to be sure about the future. Certainty and safety do exist, but they are always in the past. The world doesn’t pay you for that kind of safety - rather, it charges you a premium for it.

What is the practical application of this in gambling? Well, you have good reason to feel uncomfortable if the uncertainty and risk of a certain play are not apparent to you. Rather than avoid this, learn to embrace this risk ….. go the extra mile to seek it out. There, and there alone, is where the real profits lie.