Tuesday, June 09, 2009

The Mathematics of LUCK

This exchange of messages, which you will read below, took place between me and one Mr Aswin Patel (USA) two days ago on Mr Rajgopal Nair’s blog. Mr Patel had earlier written that a bookmaker once offered to pay him Rs 5 lakh for Rs 10,000 if he could nominate 10 half-money horses IN_A-ROW (win or place did not matter), or Rs 1 crore for Rs 10,000 if he could nominate 10 even-money horses, again, IN-A-ROW.

When Mr Aswin Patel visited my blog on Saturday and saw that there were 11 successful place bets IN-A-ROW, he wrote to me:
Mr Gosavi,
I noticed that you were successful in giving 11 winners in place, in a stretch, I do not know if they were strictly place bets or e/w bets and do not know if the Payouts were more than 1/2 money or Rs 15 for place which is one factor necessary to be correct.
If they were place bets KUDOS to you.

Aswin Patel

My reply was:
Dear Mr Ashwin Patel,
My all 19 bets over the last 13 race days were tipped as WIN bets, but since this is a public trial, I am also keeping track of the PLACE dividends.
Since you have asked this question, just for academic interest, if one had put a Rs10,000 roll on the last 11 successful PLACE bets, as per the BTC dividends, he would have got a profit of Rs 4,84,160 which is very close to the Rs 5 lakh figure that you talked about to begin with. And as you know, having consecutive successes has much more to do with luck than to any handicapping skill. Just plain lucky is how I feel when I look at those 11 consecutive successes.

Prakash Gosavi

As I went to bed that night, I wondered if I was really ‘lucky’ as I wrote to Mr Patel, or whether 10 successful place bets IN-A-ROW should be considered ‘normal’ for the FINOO (Follow-In-Next-Outing-Only) method.

Suddenly, I remembered my old research notebooks. These are four 200-page, ledger-size notebooks which I used between 1990 & 1998 when I was in brilliant (pardon the self-praise) mathematical form, and invented formulas (I was then known by my pen name Speculus) for predicting the ‘Number of strides’, developed mathematical framework for ‘stride angle and its connection with form’, the effect of turn on speed of horses, and also the formula for accurate timing up to 1/100th of a second which, incidentally, is now used the world over by hundreds of pace handicappers as a useful tool. During the same period (with nothing better to do in spare time except getting frustrated at the fact that all this wonderful research was only turning out to be academic and was not exactly adding to my bottom line), I had also toyed with devising a formula to predict the biggest winning streak or losing run for a horse race player who knew his average strike rate over the long run. Was it still there in those pages? I would check first thing the next morning, I thought and went to sleep.

That formula was a personal milestone for me in my research about money management, a subject I first learnt from one of the finest souls--Dick Mitchell.

Late Dick Mitchell, noted American handicapper/writer who introduced me to the subject of money management, had suggested using the random number function (now easily available on even scientific calculators) to simulate a series of wins and losses to predict the longest losing streak for a gambler. The random number function generates a random number between 0 & 1 (say .38 or .07 or .86) every time you hit the key.

Dick’s concept was quite scientific, but extremely tedious.

He proposed that if you were, say, a 35% handicapper (that means your long term historic record shows that, on the average, you win 35 of the 100 races you bet), then there is a way to manage your money so that your worst losing run does not take you beyond your comfort zone. All you have to do is generate a series of 100 (or 500 or 1000, whatever you think as number of bets you would make over the long term—it may be six months or a year or 3 years, or whatever) random numbers by using the random number function (denoted generally as Ran# on most calculators), and catalogue all the results. Then treat any figure that is .35 or less as your WIN situation and all others (greater than .35) as your LOSS situations, and re-write the whole matrix with W or L replacing the figures. Now, count the maximum number of L’s that are in sequence, that’s your longest losing run in that sample. Then repeat the whole process for another series and again record the maximum number of consecutive L’s. After doing this process a number of times, you can arrive at a reasonable ‘average’ value of L (your possible maximum number of losses IN-A-ROW). Once you arrived at this number, then the rest of the process was fairly simple.

If you define your comfort zone as NOT losing more than two-thirds (66%) of your betting capital, and for your 35% strike rate if you got the figure of L=11 (meaning you expected to lose maximum 11 bets in a row in worst-case scenario), then just divide 66% by 11 and the answer, 6%, tells you that you should NEVER bet more than 6% of your capital on ANY bet if you wish to always stay within your comfort zone.

Dick’s logic was superb, his method scientific, but it was extremely tedious and boring. How nice it would be if you could just put your winning (or losing) percentage in a formula, and it would give you your longest losing run (or longest winning streak), I thought.

Fortunately, I came across a website on probability by Peter Webb, a self-proclaimed speculator/investor himself. He had listed an approximate, but excellent, formula for the longest winning/losing run on the site. However, a check revealed that the formula broke down for higher strike rate and lower number of trials (bets), giving absurd answers like 14 straight wins from 10 bets (for the strike rate of 85%), so I had to start thinking afresh.

By the grace of God, I was soon able to introduce a correction to Peter Webb’s formula (to strive for the accurate formula was beyond my math training as well as intellectual ability, I must admit) that would give a near-accurate answer to the desired question of the longest winning streak or losing run.

Was that formula still sitting somewhere in my old notebooks? I wondered.

The first thing I did on Sunday morning was to take out the notebooks and scan them. And sure enough, there it was, this useful little mathematical tool staring at me from one of the pages. To make understanding simpler, just put this formula in an excel sheet and let it work out the answer for you:

T = ROUND(EXP((N*(-LN(P)))),0)+(N-1)

Where T is the number of trials (or in our case, BETS to be made),
N = longest winning streak or losing run
P = percentage (win or loss) expressed as a probability between 0 & 1
while ROUND and EXP are MicroSoft Excel functions.

You can try it yourself by inputting excel cell addresses in place of T, N & P values to generate answer to your queries about what can be your longest winning streak or losing run at the current level of handicapping skill, and base your decisions, especially related to management of betting capital, on it.

Now, let me come back to the problem I started with. Was it really a matter of luck (as I wrote to Aswin Patel) to have 11 successes in a row? Or should it be considered “normal” for a system that was expected to give 80+% results for place?

Here is the table generated by the formula that lists, for various success %, the number of bets to be made to have 11 straight successes in a row. Have a look at it:

The table tells you at a glance that for a method with 80% strike rate one needs only 22 bets to have a winning run of 11 successes in a row. So when the current percentage is even better than 80%, it is no surprise FINOO has had 11 successes in a row in just 19 bets. It is not a matter of luck at all, it is a simple matter of the law of probability.

Do make a note of the 50% strike rate case (which, in racing, is considered quite a decent %) which says that 11 straight successes will come only ONCE in 2,058 bets!

Don’t believe it? Get a friend for company and start flipping a coin (probability of heads or tails is both 50%) and record how many times you get either 11 straight heads or tails in 2,058 tosses. I am sure you will get convinced.

Another interesting thing. Look at the .35 figure in the table which is generally the public’s win percentage. For the public choices or favourites to win 11 races in a row you need over a hundred thousand races to be run. It means that if you see that happening more often than the laws of probability demand, be sure the races are heavily rigged in favour of the fancied horses, or most of the horses in most of the races are simply non-jobbers, thus tilting the balance in favour of fancied horses whose strike rate is defying the mathematical probability.

When you see straight 21 races at Ooty racecourse being won by the first favourites (I did, in 2003), you know a highly improbable event has become reality because of some extraneous forces and their machinations.

The point I want to make is in horse racing exceptional success or exceptional failure must always be viewed in terms of the strike rate and strike rate alone. FINOO’s stupendous success in PLACE is in keeping with its present strike rate, as is clear by the formula given above.

Post script: Mr Rajgopal Nair, famous on the web with his pen name Destiny Calling, on whose blog I exchanged messages with Mr Aswin Patel, has announced on his blog that he would try to tip 10 successful bets in both the WIN and PLACE categories BEFORE the end of this Bangalore summer season 2009!

How probable is that?

Let us run the formula and generate a table for 10 straight successes like we did for 11. Here is how it looks:

Assuming Mr Nair tips 2 to 3 bets a day for the remaining 18 days of the season, that’s about 40 to 50 bets until the end of season before which he must accomplish the task. The table shows that he can expect to do it in 44 bets provided he strikes a success rate close to 70%.

He will need to hit exceptional form to have that kind of rate especially for the WIN category. But it’s not impossible. Let’s hope and pray he does it. The whole secret and winning strategy required for his success is given by the formula as displayed by the figures in the highlighted row: He must strike, maintain and sustain a success rate of 70%, and he must tip at least 44 bets to realistically hope to achieve the target of 10-in-a-row. If he can do it, then it will not be a matter of luck at all—it will be purely a matter probability (and of course his handicapping skill which is reflected in the figure of 70%).

But suppose he accomplishes 10 straight winning bets with only 50% strike rate and only 30 bets (this means 15 successes, 10 of which must be in a row) then, although the feat in itself will be an extraordinary case of brilliant handicapping skill, having 10 of the 15 winners IN A ROW will have to be treated as a matter of exceptional luck.

After all, luck also has its own mathematics, and not much different from the laws of probability, as the formula above explains.

This has reference to Prasad's query (in the comments section) about my money management reserach. I have always believed stock market speculators can learn a thing or two from shrewd horse race gamblers. And money management is one area I think we understand far better than the so-called white or blue collar investors from the world of finance--MBA's included! Prasad, a banker, has asked something to which I am not just replying in hollow words, but actually putting up a demo of the power of how a sound money management fromula, based on what I have learnt from horse race betting and its pitfalls, can give most rewarding results even in a market that crashed like a plane hit by missile.

Look at the shares, sheets, prices and buy/sell calls suggested by the formula, and just see how my formula delivers incredibly better results than the best money managers have perofrmed (?) during the three most stormy years between 2006 & 2008 (34 months between January 2006 & November 2008).

Dear Prasad (or anyone else from the stock market who reads this blog), please do not hesitate to contact me in case you have any queries, but remember my advice will come with a price tag, as I have absolutely no sympathy for stock market speculators who look upon us, horse racing gamblers, most superciliously with the least of reason.

Do focus on how the formula always manages to buy cheaper and sell higher to accumulate profits without letting the human ignorance, need, greed or fear come in the way of decision making. You don't even have to "think" if you should buy or sell at a particular price, the formula itself will tell you if you should buy or sell or hold (wait).

Sample these demo results.


  1. prakash ,

    sir ,

    stick on your finoo list
    dont give undue credit to abstract blogs
    Your support for rajagopal in his quest for 10 is misplaced .
    it failed on day 1.
    chapter closed.

    if you are ready to take up the gauntlet do it openly.Lets see what you achieve.


  2. You are born in the wrong place Mr Gosavi. I have been racing for 18 yrs and never known anything about you before this blog. In any other country like US, UK you would be a demigod of racing. So much reserach you have done so many yrs ago and no one knows about it when every half baked idiot projects himself as knowall here. Should I call it humility or lack of marketing skill? I pity you & your luck.

  3. Excellent. Brilliant.

  4. This comment has been removed by a blog administrator.

  5. Both your tables titled 11 in row. Pl correct the second one.

  6. A legit claim.
    I remember having seen this blog to be put up on the Toolbar, but the home page looked so complicated I was not sure it was a tipping blog or a statistics monitoring blog.
    C Kuamr's blog goes onto the toolbar RIGHT NOW.

  7. Is Peter Webb the same fellow who once dreamed of a football match result and made money?

  8. You are right Nene. He's the same guy. That story really is incredible. As they say, truth sometimes can REALLY be stranger than fiction. I think BBC had done a story on that.

  9. I googled and found the story. You can check it out here:

  10. Thank u for mock races of june 7 on race tv channel. Good job.

  11. SIR YOU SAID " Well, if you mean why I am not publishing the entire FINOO list as it stands today, the reason is obvious. Even a 10 year old child can then apply the qualifier rules and choose bets, and no one will need to come to this blog except to check additions to the FINOO list. Also, it would be unkind to a small group of people (my private clients) who have stood by me through all the research (investing time and money "

  12. This is for Anonymous/Sairam. What you are perhaps not aware that Mr Gosavi is always the first with his tips. Sometimes just after the declarations are out and most times even before the race books are out. For example his Saturday selections were posted at 12.30 pm on Friday and Sunday tips were put up before 3.30 pm on Saturday. So how do you expect him to know whether the horse is half money or 10 to 1?

  13. Mr. Prakash Gosavi,

    I tried the link which you hv mentioned above but its showing its wrong. Pls give the right path address.


  14. Mr SP Singh, are you talking about this link:

    I just checked it's working.

    If you are talking about any other link, please clarify.

    Blog Moderator

  15. Prakash,

    Did you remember your bet on Cruising Away??.You taken out bagful of notes immediately after the race and I was sitting on the same bench where you listening the commentary by standing below the loud speaker.You just get out of race course with your bag after the race.No I am not your friend , I used sit over there.I still remember your shouting when cruising away won as my ears crashed.So why you left tipping that kinda horses rather than following some finoo rules?.
    May I ask you is that your last good bet? which happened a decade back.

  16. Dear Cruising Away,
    I honestly don't remember this particular incident, but I remember the place on the right side of the weighing room where I and my friends used to listen to the Bangalore commentary.

    I haven't left tipping that kinda horses, in my MiD DAY column (for Bombay & Pune) you will find many longshots.

    I feel the FINOO method deserves an open trial and public scrutiny because it is unique in the following attributes:

    i) It requires NO hard work (15 minutes for one race day to watch videos ONLY ONCE)
    ii) It eliminates too much betting action (a major stress-causing factor)
    iii) Instead of you chasing a possible bet, you simply wait in anticipation until the bet comes to you (which you can also reject if your qualifier rules don't pass it)
    iv) Once a bet pops up, you don't even need to look at the rivals or handicap them or worry over other factors like shoes/equipment/track work etc. You just cease to be a typical handicapper who burns midnight oil.
    v) FINOO promises high strike rate (about 50% for WIN & 80% for PLACE) which raises hopes of a long term profit
    vi) You don't really have to go and attend races every day just to keep your data/knowledge/information bank updated. So when you attend races, you can really start enjoying like when you went there for the first time, by socializing, hanging out with race course friends or betting a tener on the Tote in non-FINOO races just for fun. (I think this is one of the greatest benefits).
    vii) FINOO frees up lots & lots of quality time for your personal/family/social priorities, makes racing more enjoyable to you, gets you the great habit of betting less often but winning more often which may do wonders not only to your bottom line but also to your lifestyle.

    Hope this makes clear my preference for the FINOO approach. If possible, please read the mail I wrote to CP in August 2008 (which he has published in the comments section of the article dated April 25, that will give you all my personal reasons why I am enamoured by FINOO.

  17. Dear Cruising Away,
    on second thoughts I feel let me paste the same mail here too. Here it goes:
    Dear Prakash sir
    i am pasting the mail u sent me last year that changed my life completely. pl read carefully what u said abt PLACE betting. I just dont understand why u have to add qualifier n condition n filter & go for win betting when place betting works so good?
    date Fri, Aug 29, 2008 at 4:10 PM

    subject Finoo list

    mailed-by gmail.com

    hide details 4:10 PM Reply

    Dear CP,
    You may try to contact me but I am likely to be in Pune on that day. Family function. However nothing certain yet. So do phone me to find out.
    Now about the FINOO list which I would like you to look at as a NEW method of follow horses, unlike the traditional one.
    The traditional method of follow horses was generally prepared before a race season began based on the performance of the earlier season. No current handicapping was then done, no files maintained. It's like what they call a paper & pencil method.
    You just had a list of horses to follow through the season, and the belief was that if you play them over the saeson (sometimes depending on your view of which distance suits the horse) and try to make profit. Whether this method earned you profits or not was not really considered important--but the fact that you saved lot of handicapping time, did not engage in too much betting action (coz you would play only the list horses, no other horse) and did not put yourself under the stress of decision making (with follow horse list your decisions are made in advance) were considered great benefits.
    Today, in the age of computers and algorithms, and speed numbers and pace ratings, and vet reports and change of equipments, the modern student of handicapping has ceased to enjoy racing the way his fathers and grandfathers did.
    Look at us! With the stress of monitoring track work, attending races, then watching video number of times, preparing our files, putting in dynamic handicapping formuale, working out track variants, monitoring entries, handicaps and acceptances to have a peek into the trainer's mind (I sometimes wonder if most of them have one), checking track work to find out if it conforms to a trainer's "jobbing pattern" (whatever that means), and then after declarations chew nails and pick hairs to make up your mind if there is a bet lurking in there somewhere and if it's going to make me some money. Nowadays, only thinking about it gives me the jitters, and when I stand in front of the mirror, I sometimes feel I am staring at the greatest idiot in the world.
    What's the point in investing so much time to make so little money, and sometimes, NOT even making that?
    With such thoughts crowding my mind all the time I wondered if DH & its insights can be harnessed to make life easier and still keep alive the possibility of making profits from this game. It was a long process, and there were many hurdles, it took nearly 4 months but finally I think I have managed it with the FINOO (Follow In Next Outing Only) list.
    Why only next outing? Simple. DH is great at "estimating" current form with great accuracy. That's been our strongest point, so ideally we must bank on what sets us apart form the crowd, shouldn't we?
    At the moment the results are absolutely great, without any "qualifier rule" for PLACE betting. You will be shocked but 80+% strike rate seems to be the norm. However, the WIN profitability will NOT work unless you apply some qualifier rules as a filter. I am working on that right now. When that happens I will go for a public trial.
    I think I am going to make Dynamic handicappers' life very easy, keep your fingers crossed:).


  18. What you say makes great sense mr gosavi. Thanks.

  19. Mr gosavi, do you think if anybody just appled patience & uses your qualifier rules to his own method of study and then decides final bets, his win% will improve?
    You will be shocked but it has happened in my case. And my results are better than you.
    Therefore 'no thanks' for finoo, but thanks for your other ideas.

  20. Mr Prakash,restrain yourself,it's too early to blow your own horn.Let it be left for people other than you to judge.

  21. Very informative article about probabilites in gambling. But only 10% will understand. Looks like jawnsin is not among them. I don't see how he says you are blowing your own trumpet (not horn, jawnsin pl note) when all you talk abt is a formula & its implications. Does J stand (words omitted by Blog Moderator) here?

  22. P G ,


    fancy your chances in the contest.

  23. Mr Gosavi , I had sent a mail to you at your mid-day address before I saw this article, I am pasting it , I have a feeling that his qualifier/condition MAY have a better outcome.

    The basic premise in this is to always be involved, I.E to always have something riding on your convictions. this is a simple tool yet could be a very powerful and potent one.

    For this one needs to allocate a certain number say 25 k ( or whatever ) thats the pool and one can only parlay a certain predefined % of that pool , say 5% or for the brave 10%. with this as your wins go up so does your betting amount and as you lose your bet reduces , This helps in 2 ways your luck is also included in a crude manner, and you will always have some money to be in the game. Maybe you would like to calculate the results now with this and see the end result instead of a set amount of betting amount.
    If you have the TIME , INCLINATION and results , please calculate this for any period of time say 6 months , a season , or a year.In this with a lower strike rate BUT with a better odds ratio the results could be astonishing.
    (Lottery lagne ke liye ticket kharidna Jorrori hai, need to be in the game always )

  24. Dear Mr Patel,
    Thank you for your suggestion of a variation of money management. I have spent many quality hours of my life on this topic alone and as of today, these are my views on Money Management systems:
    i) Theoretically, the best system would always remain the Kelly system, there just cannot be any system that, in THEORY, beat Kelly.
    ii) Another point: there can never be a bigger gap between theory and practice than what you can find in the field of Money Management.
    iii) What is theoretically possible may not always be so in practice. Like a famed scientist once said: "Theoretically, it is possible to count every single grain of sand in the Sahara desert, but practically, it just CANNOT be done."
    iv) If you bet a fixed % of bankroll, and use the parlay technique, all advantage that you will gain when on a winning streak will be lost as fast when you get onto a losing run.
    v) There is a belief among gamblers that no money management system can convert a negative expectation game (flat bet roi being negative) into a positive one. While I agree this to be true for FIXED negative expectation games like Toss-of-the-coin or casino games like roulette etc where ODDS and WINNING PROBABILITY always remain constant, I feel that for games like horse racing where we deal with "variable" winning probability and "variable" odds (as opposed to "fixed"), there can exist, at least in "THEORY", a system which, under some special circumstances, can "ALWAYS" improve a negative expectation or maybe even convert it into a positive one. There has been a huge debate on this topic on the paceadvantage forum (please read my post "STOP, before you comment) and my work is still going on. There have been some sensational breakthroughs but I will prefer publishing them only when I have checked them thoroughly. It may take another six months or a year.

  25. how can toss of coin be negative exp game?

  26. You are right Anonymous. Toss of the coin is a zero-expectation game where neither party can hope to win if they play for a large number of trials.

    However, just a thought. If you believe time is money, then shouldn't the time WASTED in making ZERO profit be treated as a LOSS? Then it does become a negative expectation game, doesn't it? :) (just joking).

    Thanks for pointing out.

  27. pl note that bol book site is not opening in last some days on ur toolbar.

  28. Thanks for informing. They had changed the url from bolracingclub to bolrace. It has now been corrected on the toolbar.
    Blog Moderator

  29. Dear sir, on ur toolbar u r giving jockey/trainer stats from indiarace. Indiarace is slow. Still showing 3june data. Pl give link to latest stats. Thank u.

  30. Dear Mr V Prabhakaran,
    We just checked, you are right about Bangalore stats, but we are positive Indiarace admin will make the correction soon. However, we have for the time being connected the BTC official site's stats page to Quick Links.
    Please note that Mysore stats however have already been updated by Indiarace after June 10 races, so Quick Links will keep on connecting to Indiarace destination page for the same.
    Also, please note that most web visitors are used to Indiarace format, so we will immediately switch over to Indiarace Jock/trainer stats as soon as we find them updated.

    Blog Moderator

  31. Mr Gosavi I am a banker by profession and work with a multinational bank. I also invest in shares but now the scale is very small compared to what it was two years ago because like most people I have also lost too much money. I want to ask you a question. You say that you have made some sensational breaktrhoughs in your money management research and I don't doubt it. What I want to ask you is can your research be helpful in share market or portfolio management? if you feel pl send your answer to prasad6589@gmail.com
    Thanks in advance.
    Prasad N

  32. Dear Prasad N,
    As a special case, I have uploaded my reply (including a link to DEMO file) on this blog page. Please check the file, and if you are interested or have any query, you may contact me through my mail address gosavi@mid-day.com
    Prakash Gosavi

  33. Mr Gosavi, I do have an MBA from BHU got it in 1980, went into software, and was with Citibank N Y until 1987, We then moved to Oshkosh cuz my wife practice is here in a local Hospital, being a small town I was not finding work here and I did not want to travel MON-THUR/FRI as my daughter was young. It was then that I started to involve myself in the stock market,and traded from home something I still do.
    I get bombarded with letters, e-mails etc from people who claim they had the absolute bottom and got out at the High etc, and their system is PROVEN PER THE PAST RESULTS.
    I have never handled others money in the market, NEVER WILL, when asked for my opinion I on a stock or the market , I give my opinion and the reasons for my thinking so, I invest my own money and sleep peacefully.
    Now I do not have any problem with some one earning money, we all have some vocation or the other, BUT I find it strange that one would say "future results are not guaranteed " .
    When we see people who are succesful investors they donot sell their stuff they put their own money and reap the benefits.

    The point I am trying to make is that the Stock market is so big that if one has the magic formula , they can make the same money in the matter of minutes possibly seconds.

    Here in the U S there were many who would tell one person to SELL a particular stock and tell another to BUY.

    This somehow seems similar to touts in the race course selling ANDAR KI Khabar and take people to their KHABAR.

    This would be more honest if one would say I will show you or invest for you and if there is a profit , you give a % and if their are losses I will also partake in that too.
    Sorry I have a lot of friends who went to their KHABAR by following newsletters etc , ONE SUCH PERSON IS BY THE NAME OF CRAMER, WHO HAS A TV SHOW, and a newsletter by the name of The street.com look it up to see what I mean.
    Getting a Remuneration for TEACHING is good , this is like taking undue advantage of people following their Dreams,
    These are my PERSONAL THOUGHTS on this. Incidentally, The richest man of Babylon also suggests that one should have control of their money.
    Sorry If I am butting in where I should not BUT this is a BLOG , so I thought I can air my Views.

    B T W . The short history is to say that one needs common sense more that genius to invest.
    Buy a Stock if you feel its worth it and sell if you would not buy it at that price.

  34. Dear Mr Aswin Patel.

    I think you have missed the whole point! Or maybe you did not check the data I uploaded closely.

    These are the results of a money-management formula, it has got nothing to do with RECOMMENDATION of stocks.

    You can choose stocks by your own knowledge or khabar or based on a dream. It's not my formula's concern.

    All over the world, most people have lost most of their money not because they chose lousy stocks, but because, on the average, they bought high and sold low.

    That's because typically a human brain is hardwired for failure whenever it is asked to make a decision between a dilemma (Buy or Sell) or a trilemma (I am coining this word to convey the effect: Buy or Sell or Wait), especially in environment which is stressful due to time ticking away.

    After making it clear that my formula does not pick stocks for investment, I will try to give a simplistic example to explain what my formula actually does.

    Imagine God tells you to go ahead and invest in shares of YOUR choice with only one assurance that God will give you the perfect guidance whether you should BUY or SELL or WAIT whenever you need to take the decision. All you have do is turn to God and say, "Boss, this is the price today, what should I do?" And God says, "Sell X shares OR buy Y more shares or WAIT." And imagine, being God, He is always going to be right, never wrong. Would you take His advice?

    That's precisely my program will do. Anytime you put the price in the price column, it will instantly tell you if you should sell (it will tell you how many shares to sell at that price) or buy (again, how many to buy) or WAIT. You simply do what it says and forget all about it until the price moves to a mark where you need to take next decision.

    I hope things are clear to you now. I have deliberately chosen the worst and the most stormy period in the Indian stock market, and taken "What to do" call only once in a month (opening price of the first trading day of every month as per the BSE archives records) between January 2006 & November 2008, and these are the results.

    This is not a magic formula that will make silver out of shit. But if you have silver, it will convert it into gold, and if you have picked shit, it will at least see that it does not stink by keeping your losses at minimum.

    Hope things are clear now. I would like to have your comment NOW after I have explained this. Thanks for your input by the way.

  35. Dear Mr Prasad,
    Pl check your mail after 10 am.

  36. Dear Mr Aswin Patel,

    Since you invest in shares, I can offer you a better way of checking what I say makes sense or not.

    Send me the price history of ANY share/s on which you took decision calls of sell/buy, and within minutes I will send you what would have been the program's recommendations had you had access to it. Then compare the two to get convinced.

    The only situation in which someone may do better than my program is when the stock picked will only keep on rising all the time without even once regressing in price. But as you know, that NEVER happens in the stock market.

    In all other situations I expect the program to do better.

    I think this formula still has room for further "improvement", but after November 26 last year, I have had absolutely no time to work on it. Right now, in its present form, a small group of investors (mostly my friends who burnt their fingers by listening to the so-call stock experts) are using it for their call on the market.


  37. Attn Mr Aswin Patel,
    Mr Gosavi has asked you to check mail.

  38. Attn Mr Prasad,
    Mr Gosavi has asked you to check mail.

  39. prakash why did u not hv time after november last year? the bombay season started in feb 09?

  40. On second thoughts,considering your profile and background.......... how about a "FINOO" list for the stock market too? Mind you I am serious.I am sure it will turn out to be a super hit.You may make it a pay option after five free trials.GIVE IT A TRY>>>

  41. Anonymous, I was deeply anguished by the horror of 26/11 and was filled with impotent rage and helplessness. Couldn't get back to normal life for a long, long time. I wouldn't like to say anything beyond that as even those memories have power to again unsettle me.

  42. My sympathies to Prakash on this, this is absolutely sheer waste of time for comparing horse racing Vs Share markets. Both are completely different, you have a hope in share market where your invested money can come back, however in horse racing if it is gone it is gone. (horse racing is gambling and share market is a investment place). FYI, I am involved with both. I can come up with formula and spreadsheets when all is over, my friend please understand stock markets work on future statistics not on elapsed.

  43. Sad sack, read my comments carefully. The program CANNOT pick stocks for you. It can only advise you about your buy/sell transactions most efficiently than anyone in the world.

  44. Dear Girija Shankar,
    Do you "buy" and "sell" in the present or future?

    And can you explain what is "future statistcs"?

    And in fact I want YOU to understand that horse racing or stock market both can either be gambling or investing depending upon who is undertaking it. It is all a matter of risk and odds after all.

    For that matter, even crossing a street is a gamble.

    For example, the odds of crossing a street in a village without being hurt will not be the same as crossing a street in a city like Bombay. However, it mainly depends upon WHO is crossing the street. For a blind man, odds of crossing a village street will be much more than for the man with eyes who is trying to cross a busy Bombay street.

    Hope you get what I am trying to say. Just because you dabble in both racing and stocks doesn't make you an expert in either. So please engage in something more constructive than sympathizing with me.

  45. I think there is a communication gap, I never said I am a expert, BTW I am big fan of your FINOO list and analysis and articles. Future statistics means, people look into the earning factors of a share in the coming days that is for next quarter or for coming year based on the market conditions and the funds raising potential of the company. so if you look into the current scenario there is lot of buying in the market though the actual recovery did not happened, what does that mean is people predict the recovery will happen pretty soon.

  46. I guess I did get personal in that last para and I apologize for that. Just one of those moments when I react out of proportion.

    However, I still maintain that whether it be stock market or horse racing (or street crossing), your success finally boils down to how accurately you have assessed the risk and odds, and how efficiently you have managed your money.

    My formula deals ONLY with the last part (efficient money management). If you have any doubt, I make you the same offer that I made to Aswin Patel. Take it to be convinced of the efficacy of the money management formula.

    Here is what I wrote to Mr Patel some hours ago:
    Dear Aswinbhai,

    Please read my response in the comments section of the blog.

    If you are interested, you can send me the price movement history of any share in which you invested. Don't send me the entire price
    history, just send the price marks at which you took a call to either
    sell or buy. Then call me on my cell +91 98677 10108 to tell me you
    have sent the mail. And I will immediately run the program and send you what would have been the formula's recommendations and results. You can then compare the two.

    A lot of people (including Warren Buffet and Charlie Munger) feel that the market can never be "timed" because it can never be "predicted".

    While it is true that the market can NEVER be predicted, it is NOT
    true that the market cannot be intelligently timed. This formula
    proves that.

    It does not predict the future direction, it only "responds" to the "present" market price with a brilliant algorithm that always checks back on your past and present history of owning that particular stock, and how, based on "present" price, you can create advantage for yourself either way--whether market goes UP or DOWN in future.

    I can understand your skepticism about such claims, but all I can say is the proof of pudding is in eating.

    Send a real life sample from your own history, and see what the formula would have done for you.

    I am telling you to call me on phone to let me know so that I can rush you the results asap, and save myself from any suspicion of using time to doctor results or backfit them.



  47. Thanks for your offer, it is interesting. I will get in touch with you sooner.

  48. I think I understand ( somewhat ) what you mean about your program, sound interesting, I can understand what you are saying , am not clear on the How and the why of it, will call you to understand more ( sometime in the future your evening /early night time ) , You always learn something new, I have a feeling that your Program would do well with high volatility stocks.
    P.S I am not out for a free Lunch, if the food is Healthy and tempting.

  49. You are right on that count, Mr Aswin. My program thrives on volatility and just "loves" disaster. You are most welcome for query anytime.

  50. I have not received any mail , please check the address , apatel58@yahoo.com. I tried to call Mr Gosavi , 7.Pm Tuesday June 16th and the message said the phone was switched off , are they alternate numbers , you can send them thru e-mail

  51. Have you put my name as a spammer? :) (just joking).
    The fact is since you sent mail to me from your gmail account and replied to you, so it must have gone to that account. Pl check your gmail account. In any case, I have pasted it word to word here, so you got the message anyway, right?

    Additionally, I will forward it to your yahoo account also.

  52. And btw my phone's battery had conked off, its charging now. You can call me after about 8 pm IST. No probs.

  53. This comment has been removed by a blog administrator.

  54. This comment has been removed by the author.

  55. I have been visiting various blogs for my term papers writing research. I have found your blog to be quite useful. Keep updating your blog with valuable information... Regards


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