Cheltenham Is Nearly Here; Say Hello To Mr Market!


I thought that with the Cheltenham festival nearly upon us, now would be an ideal time to introduce you to Mr. Market.

Mr. Market was first introduced to the world by Benjamin Graham the famous value investor and mentor to Warren Buffett.

Benjamin Graham uses the analogy of Mr. Market being a paranoid investor that will one day be euphoric pushing prices up, another day he could be in the midst of a massive depression causing prices to drop and other days Mr. Market might even appear uninterested in doing anything.

Benjamin Graham said that intelligent investors could take advantage of the violent mood swings that Mr. Market is prone to.

Warren Buffet uses a slightly different analogy of Mr. Market, that of him being a pitcher in baseball who will always pitch, sometimes fast, sometimes slow, sometimes a curve ball etc. The point Warren makes is that we as speculators do not have to swing the bat until we feel that everything is in our favor.

He put it this way:

“You can wait for the right pitch all day and there is no penalty other than lost opportunity. So, when the fielders are asleep, step up and hit the pitch.”

You may be asking what all of the above has got to do with sports speculating and especially what as it got to do with Cheltenham?

Well Mr. Market is alive and well in sports speculation and will be especially active and paranoid during the Cheltenham festival, causing huge fluctuations in price on which ever selections are in or out of favor with the racing press and general public.

So I believe that it is our job as patient sports speculators to notice when Mr. Market is active and presenting us with the ideal opportunities (pitches) to lock in some value.

Good luck to everyone with your sports Speculation at the festival.

I hope you enjoyed this post
Stay patient
Mark

4 comments:

  1. I've always thought the large amounts bet during the festival hold the prices firmer than you'd see at say somewhere like AW Kempton where small money and whispers can cause huge fluctuations.

    To me the Cheltenham markets are almost in slow motion which suits me much better.

    ReplyDelete
  2. ps how do you manage to get rid of the left hand margin on the blog :)

    ReplyDelete
  3. Hi Trader

    I would say you are correct regarding short term swings, I was refering more to the fact that certain horses will be overbet because of all the pundits and public support.

    sorry for the confusion and thanks for raising the point.

    Regards
    Mark

    ReplyDelete
  4. Hi trader

    I did not get rid of the left hand margin on the blog. I think that the template is designed that way!!

    Mark

    ReplyDelete

Note: only a member of this blog may post a comment.