To be a consistent winner at the race track, a person has to overcome the staggering 17 percent frictional cost of placing a bet. According to Munger, there are actually a few people who are able to make a living by betting at the race track after paying the full 17 percent.8 These folks watch all the horses and races, yet place no bets. Then, when they encounter widely misplaced odds (in their favor) on a horse about which they know a great deal, they bet heavily on that one horse in that one race. After that, they go back to watching the horses and races indefinitely with no bets placed
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