Edited sentence: Even if our informer is lying to us, we can still profit from his lies if we can find some reverse correlation between his tips and the actual race results.Instead, as we have have indicated, we need to evaluate our side information in the long term to see how it correlates with the outcomes of the races.Suppose we have an informer, who tells us that a certain horse is going to win.The nature of side information is extremely finicky.This way we can determine exactly how reliable our informer is, and place our bets precisely to maximize the expected logarithm of our capital according to the Kelly criterion.We certainly do not want to bet all our money on that horse just upon a rumor:  that informer may be betting on another horse, and may be spreading rumors just so he can get better odds himself.We have already seen that it can affect the actual event as well as our knowledge of the outcome