Money Management Fundementals

By: Ray Taulbot

We are keenly aware that what one player considers a good winning percentage may not

 appear very good to another player. Likewise, what one bettor considers good odds maybe regarded by another bettor as something less than satisfactory.

In proposing the use of two or more spot play methods for making selections, we have

made an effort to strike a middle ground between winning percentages and prices.

Some players prefer a high winning percentage; others strongly favor high prices. Of

one thing we may be sure: it is next to impossible to maintain a high percentage of

winners at what are generally considered high prices.

Personally, we prefer a compromise. That is, we favor a reasonably good winning

percentage with profits that range from moderate to substantial.

Perhaps we should define more clearly what we mean by "moderate" and"substantial" as

 these terms apply to mutuel prices. In our opinion, a price of3-1 is an acceptable or

 moderate price.

We know that some handicappers consider anything lower than 10-1 as less than

satisfactory. However, in this business we can't have our cake and eat it too. Therefore,

the most logical procedure is to try for a reasonably good winning percentage and good

average prices.

Professional horseplayers usually have a set profit goal for the day, and when they

attain that goal, they call it a day and leave the track. The recreational player is

advised to adopt the same method of play. A logical procedure is to set a daily profit

goal of an amount commensurate with the amount of operating capital available to the

individual and then to stop play when the first cashing wager attains the desired daily

margin of profit.

It is foolish for a person with, say, $100 to shoot for a daily profit of $50. If $100 is all

that is available for wagering, then his daily profit objective should be no more than $15

a day. That is because he or she simply does not have sufficient operatingcapital at their

 disposal to safely enable them to shoot for a higher daily profit. Infact, they might be wise

 to select an even more moderate daily profit objective if $100 isall they have available for

 wagering purposes.

If in this day of inflated costs, $15 dollars profit a day seems too low, then the individual

 should wait until more operating capital is available which will enable him to safely attempt a greater amount of daily profit.

How should he manage his playing capital in order to sustain the greatest possible margin

 of safety and at the same time attain his profit objective? In our opinion, close attention

should be paid to the relationship between bankroll size, a contender's odds andthe size of the target profit objective.

For example, suppose your first selection for the day is going off at 3-1. If yourdaily profit

objective is $30 a day, you can arrive at the correct amount to wager at odds of 3-1 in order

 to attain a net profit of $30 by dividing 30 by three. The answer is 10and $10 is the logical

 amount to wager.

Or suppose your selection is held at 5-1. Since your profit goal is $30, you arrive at the correct amount to wager by dividing 30 by five. The answer is six and the wager is, therefore, $6.

What does one do if the first selection loses? The amount wagered on the loser becomes part

of the original profit goal. So if the daily profit objective was $30 and the lost wager was $6, the profit goal becomes $36, the original $30 profit goal plus the sixdollars lost on the previous selection. The amount of the next wager hinges upon the oddsat which your selection is held.

If the second selection was held at 3-1, you arrive at the correct amount to wager by dividing

 36 by three and the wager is $12. On the other hand if this second selection washeld at, say, 6-1 then the wager would be only $6.

Many professionals back their selections on the 1-3 scale win and place. For every dollar

wagered to win they bet three dollars to place. Remember, however, that if a player chooses to

 use the win and place method of wagering, he must have available four timesthe amount of

capital he needs for win bets only.

If you employ the money management plan explained above, remember that the one sure way

to keep the wagers within reasonable limits is to avoid excessively short-pricedselections. In our own play, we seldom back a horse at less than 3-1. This is because inover 50 years of experience, we have learned that a short-priced horse can lose just aseasily as a good-priced selection. There is no such thing as a sure thing in thisbusiness, so why take the worst of the odds?

In making use of the following method, the fan who is well grounded in sound handicapping principles will produce better results than the player who knows little or nothing about sound handicapping. Nevertheless, this method is designed so that it can beplayed mechanically.

The basic principle on which this method is based is a race within the last two starts which

offers good evidence that the horse is now ready to turn in a good effort.

Any horse that gained three or more running positions from the pre-stretch call to the

finish, or which turned in a front-running effort, is a horse worth following today. This

is especially true of horses that made such a gain or front running effort in theirnext-to-last

 race, if it was run within the past 35 days.

Therefore, the first step in making a selection is to find a claiming race (other than a

maiden claiming race) where a horse gained three or more running positions between the pre-stretch call and the finish in its next-to-last race and lost by no more than 3-1/2 lengths — or in which the horse turned in a front-running effort being defeated by no more than 3-1/2 lengths. Any horse meeting this basic qualification becomesa selection if it meets all of the following requirements:

1. The most recent race must have been run within the past 21 days and the next-to-last race must have been run within the past 35 days.

2. The horse must not  be moving up in claiming price today.

3. It must not have finished in-the-money in its top race.

4. If the horse is not dropping in claiming price today, the odds of its second race back must be higher than the odds of its top race.

5. If the horse is dropping $10,000 or more in claiming price today, Rule Four is disregarded, and the horse can qualify if it meets all other requirements.

ELIMINATIONS:

A. Eliminate any qualified horse whose odds were more than 15-1 in both of its top two races.

B. Eliminate any qualified horse that has not finished in-the-money or with in3-1/2 lengths of the winner in at least one of its top three races.

If two or more horses qualify in the same race, play the selection at the highest oddstoday.

Now take a moment to study the past performances of Maria's Reward in the sixth race at Sportsman's Park on March 3, 1998. The mare had raced 17 days ago and her previous racehad been run within 35 days (Rule One) . She was not moving up in claiming price today (Rule Two) and she had run out of the money in her most recent race (Rule Three).

Rule Four did not apply since she was dropping in claiming price today (see Rule Five) but could have qualified anyway since the odds in her next-to-last race were higher than those in her most recent race. She also qualified easily on both of the elimination rules.As a perfect single qualifier she paid $39.80 to win.

Ten And Two also qualified on all the rules except Rule One because her next-to-last race had not been run within 35 days. Even so, Maria"s Reward at 18-1 was an obvious pickover Ten And Two at 2-1. The only other horse who had raced within 21 days was moving upin claiming price today and was eliminated by Rule Two.