Nov 15, 2013
MONEY MANAGEMENT FUNDAMENTALS
By: RAY TAULBOT
We are keenly aware thatwhat one player considers a good winning percentage may not appear verygood to another player. Likewise, what one bettor considers good odds mayberegarded by another bettor as something less than satisfactory.
In proposing the use of twoor more spot play methods for making selections, we have made an effort tostrike a middle ground between winning percentages and prices.
Some players prefer a highwinning percentage; others strongly favor high prices. Of one thing we may besure: it is next to impossible to maintain a high percentage of winners at whatare generally considered high prices.
Personally, we prefer acompromise. That is, we favor a reasonably good winning percentage with profitsthat range from moderate to substantial.
Perhaps we should definemore clearly what we mean by "moderate" and "substantial"as these terms apply to mutuel prices. In our opinion, a price of3-1 is anacceptable or moderate price.
We know that somehandicappers 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, themost logical procedure is to try for a reasonably good winning percentage andgood average prices.
Professional horseplayersusually 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 toadopt the same method of play. A logical procedure is to set a daily profitgoal of an amount commensurate with the amount of operating capital availableto the individual and then to stop play when the first cashing wager attainsthe desired daily margin of profit.
It is foolish for a personwith, say, $100 to shoot for a daily profit of $50. If $100 is all that isavailable 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 dailyprofit. In fact, they might be wise to select an even more moderate dailyprofit objective if $100 is all they have available for wagering purposes.
If in this day of inflatedcosts, $15 dollars profit a day seems too low, then the individual should waituntil more operating capital is available which will enable him to safelyattempt a greater amount of daily profit.
How should he manage hisplaying capital in order to sustain the greatest possible margin of safety andat the same time attain his profit objective? In our opinion, close attentionshould be paid to the relationship between bankroll size, a contender’s oddsand the size of the target profit objective.
For example, suppose yourfirst selection for the day is going off at 3-1. If your daily profit objectiveis $30 a day, you can arrive at the correct amount to wager at odds of 3-1 inorder 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 isheld at 5-1. Since your profit goal is $30, you arrive at the correct amount towager by dividing 30 by five. The answer is six and the wager is, therefore,$6.
What does one do if thefirst selection loses? The amount wagered on the loser becomes part of theoriginal 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 plusthe six dollars lost on the previous selection. The amount of the next wagerhinges upon the odd sat which your selection is held.
If the second selection washeld at 3-1, you arrive at the correct amount to wager by dividing 36 by threeand the wager is $12. On the other hand if this second selection was held at,say, 6-1 then the wager would be only $6.
Many professionals backtheir selections on the 1-3 scale win and place. For every dollar wagered towin they bet three dollars to place. Remember, however, that if a playerchooses to use the win and place method of wagering, he must have availablefour times the amount of capital he needs for win bets only.
If you employ the moneymanagement plan explained above, remember that the one sure way to keep thewagers within reasonable limits is to avoid excessively short-pricedselections. In our own play, we seldom back a horse at less than 3-1. This isbecause in over 50 years of experience, we have learned that a short-pricedhorse can lose just as easily as a good-priced selection. There is no suchthing as a sure thing in this business, so why take the worst of theodds?
In making use of thefollowing method, the fan who is well grounded in sound handicapping principleswill produce better results than the player who knows little or nothing aboutsound handicapping. Nevertheless, this method is designed so that it can beplayed mechanically.
The basic principle on whichthis method is based is a race within the last two starts which offers goodevidence that the horse is now ready to turn in a good effort.
Any horse that gained threeor more running positions from the pre-stretch call to the finish, or whichturned in a front-running effort, is a horse worth following today. This isespecially true of horses that made such a gain or front running effort intheir next-to-last race, if it was run within the past 35 days.
Therefore, the first step inmaking a selection is to find a claiming race (other than a maiden claimingrace) 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 morethan 3-1/2lengths — or in which the horse turned in afront-running effort being defeated by no more than 3-1/2 lengths. Any horsemeeting this basic qualification becomes a selection if it meets all of thefollowing requirements:
1. The most recent race must have beenrun within the past 21 days and the next-to-last race must have been run withinthe past 35 days.
2. The horse must not be movingup in claiming price today.
3. It must not have finishedin-the-money in its top race.
4. If the horse is not droppingin claiming price today, the odds of its second race back must be higherthan the odds of its top race.
5. If the horse is dropping $10,000 ormore in claiming price today, Rule Four is disregarded, and the horse canqualify if it meets all other requirements.
A. Eliminate any qualified horse whoseodds were more than 15-1 in both of its top two races.
B. Eliminate any qualified horse thathas not finished in-the-money or within 3-1/2 lengths of the winner in at leastone of its top three races.
If two or more horsesqualify in the same race, play the selection at the highest odds today.
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