BASE BET + SQUARE ROOT

[ratpack]

Does anyone have a copy of that bet chart from "Hold your Horses"

If you do I would appreciate it if you could email me a copy or post it.

Thanks,

chrissiciliano@netzero.com

[Rpd]

I believe there is a copy of it in James Quinn's book "The Best of Thoroughbred Handicapping"

[The_Knight_Sky]

Don't want to rain on your parade RatPack,
but the Base Bet + Square Root method was deemed to be inferior in several studies versus the Kelly percentage method.


Just so you are aware.:D

[Doug]

Wondering just who deemed it inferior to Kelley?

For somewhat short flows of races I find it to be absolutely superior. Takes big time advantage of of short term streaks.

DOUG

[GameTheory]

For a mathematical perspective, Kelly is absolutely optimal. Nothing can beat it. It has problems when using it it practice, but so does every other such system...

[PaceAdvantage]

It's optimal only if you feed it absolutely accurate numbers regarding your advantage over the game, correct? If you are dealing with unreal winning % and ROI (say for instance calculated over a small sample size), then Kelly will kill you....

Since it is virtually impossible to conclude with absolute certainty your longterm projected performance, Kelly is nothing more than an intellectual pursuit, not to be taken literally or played in real life, unless in a MODIFIED form.

Or am I totally off base?

[GameTheory]

No, you're not off-base. Trying to play "full Kelly" is playing with fire. However, using a fractional Kelly scheme can work well, and probably better than Base+SquareRootProfit or similar. Basically, you just want to give yourself a margin of error. Since Kelly is optimal, that means it is on the "edge of the cliff" of the point where you are in danger of over-exposing yourself to risk. So if you figure the full-Kelly bet fraction, but only bet 1/4 of it you've got some room for error. Or when calculating perceived overlays, you could arbitrarily cut them all down by a certain percentage before figuring your bet. Other factors also come into play if you're talking about a large bankroll -- size of the pool, etc.

Another issue: your style of play may not lend itself to calculating advantage on individual bets, but only on a group of bets. Kelly can also get you into trouble there because of variance of payoffs.

[Lefty]

With Kelly Huey Mahl used to say you had to keep very close track of your win avg and avg price. I blve he said to refigure everything every 15 races or so. Even then, it was too dangerous to use full Kwelly and Huey said never bet more than 8% of bank in any instance.

[GameTheory]

Originally posted by Lefty
With Kelly Huey Mahl used to say you had to keep very close track of your win avg and avg price. I blve he said to refigure everything every 15 races or so. Even then, it was too dangerous to use full Kwelly and Huey said never bet more than 8% of bank in any instance.

Yeah, that's what I mean when I said "as a group". Huey is talking about betting the same fraction of bank every bet with that fraction calculated Kelly-wise based on AVERAGE win% & payoff. Very dangerous unless you know your odds will be in a very narrow range.

But if you make probabilities for every horse in every race, you can calculate it individually for each bet. Much safer, although you still need an error margin...