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 ofwinners 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 of 3-1 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 goodaverage prices.

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

 call it a day and leave the track. The recreational player isadvised to adopt the same method of play.

A logical procedure is to set a daily profitgoal of an amount commensurate with the amount of

operating capital available to theindividual and then to stop play when the first cashing wager attains the

 desired dailymargin of profit.

It is foolish for a person with, say, $100 to shoot for a daily profit of $50. If $100is all that is available for wagering, then his daily profit objective should be no morethan $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 theindividual should wait until more operating capital is available which will enable him tosafely attempt a greater amount of daily profit.

How should he manage his playing capital in order to sustain the greatest possiblemargin of safety and at the same time attain his profit objective? In our opinion, closeattention 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 oddsof 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 atthe 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 becomespart of the original profit goal. So if the daily profit objective was $30 and the lostwager 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 bydividing 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 everydollar wagered to win they bet three dollars to place. Remember, however, that if a playerchooses 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 wayto 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 soundhandicapping principles will produce better results than the player who knows little ornothing 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 startswhich 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 thefinish, or which

 turned in a front-running effort, is a horse worth following today. Thisis 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 thepre-stretch call and the finish in its

next-to-last race and lost by no more than 3-1/2lengths — 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

becomes a selection if it meets all of the following requirements:

1. The most recent race must have been run within the past 21 days and thenext-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 itssecond 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 Fouris 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 bothof its top two races.

B. Eliminate any qualified horse that has not finished in-the-money or within3-1/2 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 odds today.

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 race had

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 pick over 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.