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Feb 19, 2004

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. Ofone 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 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 good average 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 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 $100is 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, 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 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 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 becomes part 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 odds at 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 times the 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-priced selections. 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 as easily as a good-priced selection. There is no such thing as a sure thing in this business, 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 be played 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. Thisis especially true of horses that made such a gain

 or front running effort in their next-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 thana 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 3-1/2lengths — 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 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 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 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.



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