Some thoughts

[Dick Schmidt]

AnotherDave,

Good advice, though I think a $75,000 bankroll requirement is a bit over the top. I mean, if you got a job where you can accumulate 75 large, what do you need betting for? I played full time for about 9 years, and part time for several others, making money every year. You asked for advice, so here is mine:

1) get your nut down as low as possible. The last thing you need is a heavy monthly payment looming in five days and you're short. This can make you push, and this leads to disaster. I know of only one handicapper who do this; Tom Brohamer who played to pay off a huge IRS judgment, and he's the best there is. Before I went full time, I paid off my mortgage, had zero credit card debt and owed nothing in monthly payments. The nature of the game is that you win and lose in streaks, and not being able to pay bills during the down streaks can make you crazy.

2) bet a very conservative percentage of bankroll. I don't feel you need a certain amount, that depends on your lifestyle, but if you put too much in play it will kill you. I never bet over 1% of bank per race. This includes all the bets in a race, including exotics. Don't forget to add in the multiple race (pick-3, pick-6) bets. This allows you to weather long losing streaks with equanimity.

3) become a record keeping fanatic. You need to track every bet you make, and know where to put your money. I always recommend using multiple bankrolls for each type of bet. Say you're doing well betting to win and want to bet show as well. Set aside a certain amount and use it to bet to show. Start small, and if you lose that bankroll, don't but another penny into it until you have reason to believe you have solved significant problems with that type of bet. A bettor is running a business, and every business I know of requires a set of books. Pari-mutuel investing is no different. Sell shoes, bet horses, you gotta do the books. Besides, someday they will come in handy in an IRS auditor's office.

Go for it, and have fun. Remember, if it stops being fun, stop doing it. There are lots of jobs that you can hate out there that pay a lot better.

Dick

[Dick Schmidt]

The above message started off as a reply to AnotherDave about his questions about going full time. Somehow, it wound up as a new subject. Anyway, AD, this is pointed at you.

Dick

[cj]

Regarding bankroll:

Try the following scenario. Lets say you start at $20k in the bank. From there lets say you bet 1% per race, thats $200 per race. Lets also say you find play five days per week for 40 weeks per year. That comes out to 600 plays for a total of $120k through the windows each year. If you hit at a very good ROI of 1.10 per $ wagered, you would make the grand sum of $12k for the year. Not bad for part time doing something you love, but hardly going to pay the bills.

Only ways to increase this are:

1. Bigger bankroll, thus increasing bet size
2. More bets per week
3. Bet a bigger % of bankroll
4. More weeks play per year (though 40 would be tough enough)
5. Increase ROI

Each have there pitfalls (1,2,3,4) or may not be possible (1,4,5). The point of all this is to show how tough it is to make a living at this game. I like the part time with the security of a full time job.

Any thoughts or anoyone see any flaws in my logic, please respond!

CJ

[thoroughbred]

If we approach bankroll with the real world in mind, it becomes very clear that it depends, to a very large degree, on your handicapping ability.

Let's talk extremes, (that is ridiculous options) just to make the point by bounding the problem.

If your win percentage is ZERO percent, no amount of bankroll will yield a profit. So, in the real world, you only play for fun and entertainment.

If your win percentage is 100%, no real bankroll is necessary. You win all the time.

It's the real world, it is in between these extremes that is important.

The point is, the better your handicapping skills, the less bankroll you need.

If your handicapping skills are such, e.g. greater than 30%, so in the long run you will make money, it then comes down to how much money you need for the short terms when you are in the midst of a losing streak. Again, though, the better your handicapping skills, the losing streaks will, on the average, be shorter.

Handicapping skill! Handicapping skill! That's what it's all about and which we all have to continually work on to improve. Never is there a free lunch.

[Lefty]

I read about a player in BM's newsletter that bets ONE QUARTER OF ONE PERCENT. Gee, wonder what kinda BR he's got. Has to be huge.

[weatherman]

how many people on this board has $20k as a bankroll for gambling, it's just a question. i think the average gambler has a short bankroll of a $100 or so each day and they're are trying to increase it by playing the horses. the challenge to say i'm the best is better than money to some. there's days i bet my hold bankroll on one horse, if he loses then i leave early so i can pick up tin cans on the way home, thats a joke, but how many people do you know that have lost everything. you cannot find better comments or discussions than on this board and we're all here to learn and improve our handicapping. Programs and systems are all good whether they pick winners or not if you know how they do, by keeping records , when i get home i have each bet i made wrote down and losing tickets and then i write comments on why my horse won or lost or the horses that didn't get in my picks that should have, post parade, warmup and going to gate comments, how they come out and how the jockey rode. can you tell if a horse is sore, that's what this business is about knowing your players and don't forget the trainers. If you can't win on a $2 w/p/s how can you win with a $100 across

[cj]

My whole point was that even an excellent handicapper needs to start with a decent bankroll to have a shot at winning some serious cash. In my example, it took 20k to win 12K over a one year period. That is an great ROI and any stock broker would be "thrilled to pieces" with such a return, but it is hardly going to make anyone rich. The advantage of playing horses is that you can churn the same money through the windows over and over again during the year. So the more you start with, the more you are likely to win!

CJ

[weatherman]

i understand your point on the bankroll but most gambler that are succesful have made their money from gambling, and started with a job to get the money. the point i'm making is build your bankroll, january i'm plus $800 and thats in the bank the 1st i'll start with $500 for the month. january the 2nd i hit a superfecta at Santa Anita for $3800 cost $18, but i split it with another person and gave my wife $600 took me a month to lose what i had to play on ($400). not good handicapping, but i had fun and a chance to make more on their money. i use to keep it all in my pocket for the next day, bad choice..

[Dick Schmidt]

Cjmikowski,

You make good points. Let me give you my thoughts:


1. Bigger bankroll, thus increasing bet size

This works for a while, but the pari-mutual system limits the amounts you can bet. At some tracks, a $100 win bet will tilt the tote, and there isn't a track in the country that can take a $2,000 bet on a daily basis.

2. More bets per week

Here is a real opportunity in the world of the internet. I average about 50 bets a day doing all my betting from home. Back when I was going to the track everyday, I was lucky to get in 15. It's a new world out there and this is one area where technology really makes a difference. Of course, you most likely have to use handicapping software and download information to do this, but that's easy.


3. Bet a bigger % of bankroll

Disaster! You are going to go through losing streaks no matter how good you are. Resist this at all costs.


4. More weeks play per year (though 40 would be tough enough)

If you can walk to work in your underwear and play just down the hall in your own comfy chair, it isn't that tough. Lonely, but not tough.


5. Increase ROI

Always to be devoutly wished, but hard to do. The truth is that you don't really need to. Using your 10% advantage, assume that you can bet 250 races a week at $100 dollars each. 25 large through the window each week, with a $2,500 profit. Play your 40 weeks and you have grossed a hundred grand. Net should be at least 75 (gotta pay for that hardware, fast internet connection, software and data).

Not a fabulous living, but it sure beats working.

Dick

[boxcar]

Posted by Dick Schmidt:

>>
Good advice, though I think a $75,000 bankroll requirement is a bit over the top. I mean, if you got a job where you can accumulate 75 large, what do you need betting for? I played full time for about 9 years, and part time for several others, making money every year.
>>

Over the top, eh? Hmm...so you're saying that anyone with a mere "job" -- even it were a good paying one -- would never be able to start up a business of any kind?

I know a few people who worked at one time for large corporations, retired and cashed in their 401Ks just to start up their own businesses, and their 401Ks were worth a lot more than 75K even after taxes -- and to a person they told me that they needed every penny of that retirement fund!

Your advice about keeping that "nut" as low as possible is good, but often times not easily doable. Consider a home-owner paying a $900. a month nut, for example! What's he supposed to do -- pay off the mortgage before going into the turf speculation biz, or any other biz for that matter?

Toss in a wife and a couple of kids on top of the mortgage, and one can easily see where 75K wouldn't go very far for very long. Methinks my advice is very reasonable when anyone has a family and a sizeable nut to crack every month.

Boxcar

[boxcar]

Since ROIs have come up quite a bit during the course of this discussion, I have a question I'd like to pose to everyone about this particular subject. I asked this question one time on the "vaunted" DL, and received nary a reply. So, here it is -- maybe I'll get a better response this time around.

From everything I've read about the nature of handicapping contests, there's virtually unanimous agreement, among saavy players of these kinds of events, that if you hope to win one of those bad boys, you will have to at least double your money -- at minimum! My question, therefore, is this: Since this kind of result is achievable within a framework of a short term contest, why can't it be accomplished on a routine basis in the real world of long term turf speculation -- most especially when you consider that here in the real world each player plays by rules with which he feels the most comfortable.

Boxcar

[Bob Harris]

Originally posted by Lefty
I read about a player in BM's newsletter that bets ONE QUARTER OF ONE PERCENT. Gee, wonder what kinda BR he's got. Has to be huge.

I didn't read Barry's article but that percentage is actually more common than you would think. While I certainly don't know *all* winning players, everyone I do know personally works off of a betting line. Losing streaks of 20 or more are commonplace and unit swings in the bankroll can be huge...wagering 1/4 to 1 percent of bank is certainly closer to the norm.

One thing which can't be over stated: A player could have a winning method, overbet his bankroll and never know he had a winning method! When I see or hear people testing systems by taking out 50.00 and making 2.00 wagers, I cringe. Two dollar wagers from a 50.00 bank is 4% and if you hit a cold streak at the beginning, that percentage of bank just goes up.

You might get away with that if the play was *very* high percentage but since most winning angles are of the low win%/ high mutuel variety, anything more than 1 % would be costly.

[anotherdave]

Originally posted by boxcar
My question, therefore, is this: Since this kind of result is achievable within a framework of a short term contest, why can't it be accomplished on a routine basis in the real world of long term turf speculation -- most especially when you consider that here in the real world each player plays by rules with which he feels the most comfortable.

Boxcar

Every one of us has had periods of times when we are on a roll. In contests I would guess that the people who win are the ones who happen to be hot for those days. Just like a batter can bat .600 for a week, but give it some time.....and he'll come back to earth.

Anyone can be on a roll short term, but to keep up that pace long term - not likely.

[superfecta]

A few things here
Before you start thinking what size bankroll you need,you need to have some sort of idea what kind of bets are profitable to you.
Keep a record of what is profitable to you ,is it win bets or exotics?If you don't know,that is starting a business with a product you have no idea how it works.
keep your bets as small as possible,weigh them against the probability of success.The fact you are involved in para-mutuel betting limits the amount of money you collect from a single bet.
Don't think that win betting is the only way to profitability,a smart bettor takes advantage of money management.Sometimes win betting is the way to go,sometimes using that horse as a key horse in an exotic bet of some sort is the most efficent way to profit.
Each one of us is different,so the way we choose horses is different.Why shouldn't the way each one of us makes profit be different as well?Thats why you need to be confident in your type of betting before you decide to become a pro.

[boxcar]

Posted by anotherdave:

>>
Every one of us has had periods of times when we are on a roll. In contests I would guess that the people who win are the ones who happen to be hot for those days. Just like a batter can bat .600 for a week, but give it some time.....and he'll come back to earth.

Anyone can be on a roll short term, but to keep up that pace long term - not likely.
>>

But doesn't this explanation beg the question? If some players within the context of a contest do very well because they're "hot" for that short period of time, and you acknowledge that "anyone" (even out here in the real world) can be on a "roll" over a short term, then wouldn't it be reasonable to think that this "anyone" should also be able to experience numerous "hot" and "cold" periods over a much longer period of time? And if so, wouldn't those many "hot" periods offset the losses incurred, by a disciplined player, during those cold periods in a very big way?

And if don't agree with my line of reasoning, wouldn't you in essence be making an even stronger statement than the contest player when he says that good results in those events boil down to 50% skill and 50% luck? In the real world, if such returns aren't even remotely possible when operating under the most advantageous conditions and over the long haul, then I would have to conclude that the modest results obtained "out here" rely far less on skill and much more on luck -- perhaps to the ratio of 20% -80%, respectively! And if this be the case, I don't know why anyone in his or her right mind would not only want to buck up against the track's vig, but would want to rely mainly on the elusive element of "luck", that was operable during those "hot" periods, to eke out a modest living -- or even worse to have to risk huge sums of money over time, under these two horrendous handicaps, to make a decent living.

Are all professional players nothing more than bunch of masochists beyond any hope of redemption?
Boxcar

[anotherdave]

Originally posted by boxcar
If some players within the context of a contest do very well because they're "hot" for that short period of time, and you acknowledge that "anyone" (even out here in the real world) can be on a "roll" over a short term, then wouldn't it be reasonable to think that this "anyone" should also be able to experience numerous "hot" and "cold" periods over a much longer period of time? And if so, wouldn't those many "hot" periods offset the losses incurred, by a disciplined player, during those cold periods in a very big way?
[/B]

Good points. Anyone could have a hot streak - but I would guess a good handicapper would have more than a bad handicapper. When I was on the losing side of the ledger I had some great runs, but more horrendous runs. Now that I am on the positive side, I still have some great runs and some bad streaks, but not near as many of those as I used to. I am learning to deal with them. (Mostly by not chasing).

In the handicapping contests isn't there a lot of strategy? Hit the big one, get a lead and cruise home. Or if you are behind, make the big bet on the longshot and see if you can catch up. One of those guys that is way behind might catch up - there will be enough of them. So luck will come into it.

But at the track would we act the same way? Would we try to catch up or cruise when ahead? Not me. And it doesn't work for 99 of the hundred guys that are way behind, but maybe it does for the other 1. That doesn't mean he's smart- he's probably good and lucky.(50-50 like you say). Still for the other 99 guys they took a shot at the contest, it was only a contest.

"Are all professional players nothing more than bunch of masochists beyond any hope of redemption?"

Probably - but some people want to climb Everest or write the great American novel - I say go for it. Most of them won't make it-but hey why not give it a shot if you aren't hurting anyone (except maybe yourself) in the process? Might have fun regardless.

[boxcar]

Posted by anotherdave:

>>
In the handicapping contests isn't there a lot of strategy? Hit the big one, get a lead and cruise home. Or if you are behind, make the big bet on the longshot and see if you can catch up.
>>

Sure there is strategy in a contest. But don't all serious players in the real world have their strategies, also? I know I do. Really, everyone needs a game plan -- a plan of attack.

And since out here in the real world we're not subjected to someone else's arbitrary rules, and can make our own,this fact alone should give us a tremendous long term advantage over tourney contestants.

"Are all professional players nothing more than bunch of masochists beyond any hope of redemption?"

>>
Probably - but some people want to climb Everest or write the great American novel - I say go for it. Most of them won't make it-but hey why not give it a shot if you aren't hurting anyone (except maybe yourself) in the process? Might have fun regardless.
>>

I'm not sure a good parallel can be drawn between a professionl turf speculator and a mountain climber, for example. In the case of the former,
his activity is in the context of a profession -- a vocation whereby he earns a livelihood. Whereas in the case of the latter, he's engaging more in a hobby -- a recreational activity. The major concern of the professional horse player is for his or her bottom line. On the other hand, the serious hobbyist is seeking his moment of fame -- perhaps even getting his name in the record books, etc.

Boxcar

[anotherdave]

Originally posted by boxcar
I'm not sure a good parallel can be drawn between a professionl turf speculator and a mountain climber, for example. In the case of the former,
his activity is in the context of a profession -- a vocation whereby he earns a livelihood. Whereas in the case of the latter, he's engaging more in a hobby -- a recreational activity. The major concern of the professional horse player is for his or her bottom line. On the other hand, the serious hobbyist is seeking his moment of fame -- perhaps even getting his name in the record books, etc.

Boxcar [/B]

If you want to climb Everest, it isn't a hobby. People who do that take 6 months or more off to do it. They get prepared, spend a ton of money on equipment and travel and when they are done they may have the satisfaction of knowing they did it.

If a horseplayer tries going "pro" for a while, they take time off, invest a lot of money and may have the satisfaction of knowing they did it. And if they did it, they even have some extra dough in the bank!

[boxcar]

My point, Anotherdave, is that mountain climbing, to the best of my knowledge, has never been a paying vocation; therefore if it isn't a hobby or a sport (I'll give you that), what is it?

I don't denigrate activities such as mountain climbing, parachute jumping, skydiving, surfing, etc. by referring to them as "hobbies". There are an awful lot of hobbyists out there who take their involvements with such activities very seriously.

But a professional turf speculator, I don't believe, would look upon his activities as a hobby or recreational pursuit. He would more likely view it as a profession...as a job, even. This was all I was trying to say.

Boxcar

[anotherdave]

Originally posted by boxcar


But a professional turf speculator, I don't believe, would look upon his activities as a hobby or recreational pursuit. He would more likely view it as a profession...as a job, even. This was all I was trying to say.

Boxcar

Point taken.

[anotherdave]

or should I say Point Given?

[tanda]

Several thoughts:

1) As to tournament play, tournaments are completely different than day-to-day long-term handicapping. They are not necessarily an accurate test of long-term handicapping ability. They are a test of a different type of handicapping ability. Just as poker tournaments are completely different than ring games (a ring game is your standard casino/home game), so it is with handicapping. The proper strategies in poker tournaments are sometimes significantly different than in ring games. Infact, many very successful poker tournament players are not nearly as successful in ring games and vice versa. The differences between the long-term handicapping and tournaments include, but are not limited to,: restrictions on bet types, bet amounts, number of plays and payout odds and success sometimes measured in wins not R.O.I..

2) Also as to tournaments, even a player with a long-term positive expectation is more at the mercy of luck in the short-term than his/her skill. In other words, luck (as measured by your standard deviation) has more control on shor-term results than skill. However, in the long run skill has more control.

3) The second comment also applies to bankroll requirements. A player's bankroll requirements are contolled by three factors:1) expectation (R.O.I.), 2) standard deviation (effect of short-term luck on results) and 3) tolerance for possibility of going broke. The higher 1) and 3) are and the lower 2) is, the less bankroll a player needs (bankroll as measured by betting units. That means that if you cannot compute those factors with reasonable accuracy, it is impossible to determine your optimal bankroll requirements.

4) I would recommend that every horseplayer read "Gambling Theory and Other Topics" by Mason Malmuth which is available many places including its publisher Two and Two Publishing. Although most of the book is directed to poker players, its discussion of "the silly subject of money management" and bankroll requirements is just as applicable to horseplayers. An understanding of its topics will answer many of the questions posted here and dispell many of the myths. Educating yourself in this area will reward/protect you in many ways. One of the most important points is how long it takes to get into the "long run". It takes longer than most of you probably realize. If so, you are probably playing with a short bankroll. This misunderstanding is why many skilled poker players (those with a positive expectation) can still go broke. Dick Schmidt touches on the likelihood that a skilled player can still experience extended losing streaks and the need, therefore, for a bankroll with many more units then most people think. He is absolutely correct.

[boxcar]

tanda wrote in part:

>>
1) As to tournament play, tournaments are completely different than day-to-day long-term handicapping. They are not necessarily an accurate test of long-term handicapping ability. They are a test of a different type of handicapping ability. >>

Okay...but what is to prevent a sharp tourney player from permanently adopting that "different type of handicapping abiltiy" on a permanent basis
outside the framework of contests?

I have to go back to what I said earlier to Anotherdave, which essentially was: It stands to reason that if a player can rake in big bucks over the short haul playing by others' rules, and by adopting a strategy that would normally be foreign to him in the real world, he should be able to experience many such "hot" streaks or "lucky" periods over the long haul, and come out smelling like roses by simply sticking with what worked so well for him in those contests.

>>
2) Also as to tournaments, even a player with a long-term positive expectation is more at the mercy of luck in the short-term than his/her skill. In other words, luck (as measured by your standard deviation) has more control on shor-term results than skill. However, in the long run skill has more control.
>>

Agreed. And your assertion here lends good support to mine above. In fact, since the degree of luck diminishes as time increases, the tourney player out here in the real world should, theoretically, do even better for himself.

Boxcar

[tanda]

Boxcar,

I was not debating. In fact, I just skimmed most of the posts and was not taking issue with any in particular.

And yes, a player could become profitable as a tourney only player adopting unique strategies. In fact, there are probably some profitable opportunities available. For example, the BRIS contests allow you to compete for free (although most purchase their contest data from BRIS, only $1 for Premium file). That contest must have a positive expectation for a skilled player. Obviously the stakes are low, but it is an example of the opportunities available.

[boxcar]

I wasn't particulary debating, either, tanda. I just thought that since you had mentioned "contests" that you had taken a shot at the question I posed on this thread on 1/28.

Boxcar