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 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 theindividual 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 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 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 and the size of the target profit objective.

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

daily 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 10 and $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

 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 every

dollar 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 sound

handicapping 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. 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 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 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 within

3-1/2 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 up

in claiming price today and was eliminated by Rule Two.