How Much Would You Pay? [Archive] - Horse Racing Forum - PaceAdvantage.Com

Kreed

03-07-2005, 08:08 PM

And so what? That Program, if IT Existed, not in Fantasy, would be Good
but NOT GREAT. I'd give that "program" a B. Yes, you would make money,
but what moron couldn't accomplish that? I JUST posted that TB betting is
Penny Ante & even with NO ADEQUATE system, but some self-control, you
could play on for a long time with limited money, before wiping out. Again,
NOT ONE PICK but only: "cursiere non desieau imagino". LOL ... let's see mr
just how long it takes YOU 2 translate that (NOT given the language its in) ..
go ahead, Googlers, ask those 2 guys who REALLY made serious money.

dav4463

03-07-2005, 08:19 PM

85% return on exactas ? Why would anyone sell it ? I would pay whatever I could afford if it was a guarantee, but there is no guarantee in horseracing.

e_r

03-07-2005, 09:49 PM

Sounds like mucho fun: run a program and make tons of money.
Now, that's (cosmetic surgery) hadicapping.

Heaven forbid I actually put some time and effort into understanding the sport.

cato

03-07-2005, 11:20 PM

Notwithstanding Kreed's input, the program would have great value initially but between people figuring out how it worked and cloning the program and/or changes in the game (more drugs, less drugs, global warming, whatever) it would lose its edge. So it's hard to value given that it's a crapshoot as to how long it could maintain an edge

But let me know when you come up with it and are ready to put it on the market :)

Cato

midnight

03-08-2005, 12:17 AM

The original question mentioned that you would be the exclusive owner and assumed that such a program could exist in the first place. Assuming both of those criteria are strictly met (example, you wrote the program yourself and struck paydirt with something weird), I'd guess it'd be worth millions, provided you were careful about staying anonymous.

bucktron

03-08-2005, 10:45 AM

For a black box program, (if it existed), that could predict the winner out of the top two selections 66% of the time, playing all of the races except those exclusively for FTS. The average payout on straight bets at over $8.50 and better than 85% return on exactas using the top two horses when the M.L. odds are at least 3/1. Remember this is a hypothetical situation where you would be the exclusive owner of said program.

Has anyone ever backfitted a sample of 20,000+ races that met the goals and selection criteria stated by NoDayJob? If so:

What computer language did you use
What were your results for your Test Set (Data the System did not use in Backfitting)
How long did it take you to Backfit the Data

midnight

03-08-2005, 01:43 PM

I didn't actually backfit, but I've done database tests with things over a calendar year (40000+ races) database and have come up with samples as large as 3,000 plays with reasonable win percentages and ROI's of 1.10 to 1.20. Testing the same thing in the previous and succeeding years would produce lower win percentages and ROI's in the 0.85-0.90 range. It's weird.

Dave Schwartz

03-08-2005, 01:50 PM

The unreasonable attitude of horseplayers became obvious when I posted a similar question a few years ago on this very forum. This is from memory, so it may not be precise.

"If I produced a program that allowed you to make $20k per month at the races and I could prove it to your satisifaction, how much would you be willing to pay for this program?"

I expected to get answers like $1,000 per month, $20,000 per year, etc. And what I had really expected was that someone would go as high as $5,000 per month.

I was astounded to find that the highest response I got was $1,000.

Not $1,000 per month but total price!

I viewed this as a "franchise fee" of sorts. But apparently nobody else does.

Talk to an entreprenaurial type and ask them such a question. You might get answers as high as $15k per month if the business was low work and risk.

Regards,
Dave Schwartz

sq764

03-08-2005, 03:08 PM

The unreasonable attitude of horseplayers became obvious when I posted a similar question a few years ago on this very forum. This is from memory, so it may not be precise.

I expected to get answers like $1,000 per month, $20,000 per year, etc. And what I had really expected was that someone would go as high as $5,000 per month.

I was astounded to find that the highest response I got was $1,000.

Not $1,000 per month but total price!

I viewed this as a "franchise fee" of sorts. But apparently nobody else does.

Talk to an entreprenaurial type and ask them such a question. You might get answers as high as $15k per month if the business was low work and risk.

Regards,
Dave Schwartz
Dave, with all the crap software, scams and generally shady people out there, would you blame people for not being willing to shell out big chunks of cash for software?

46zilzal

03-08-2005, 04:18 PM

Find something that works, PRACTICE and it will reward you. So many folks are IMPATIENT and HAVE to buy a new one when it is probably a lot earlier and more profitable to JUST LEARN what you already have.

46zilzal

03-08-2005, 05:25 PM

A wagering DECISION software package based upon the individual's input from EACH course so that one would not have to remember all those little factors that clutter you at BET time.

Bruddah

03-08-2005, 05:40 PM

of what I would be willing to pay for such a system, an old joke comes to mind. TAKE MY WIFE...PLEASE!!! :D :D :D

Kreed

03-08-2005, 05:41 PM

Not that I would ever agree with your swap, but that's Really A Funny retort.

RunningWild

03-08-2005, 07:52 PM

You can have whatever Program or system you can find,,But if you don't have control in the way you bet. You have nothing.

NoDayJob

03-08-2005, 10:15 PM

The unreasonable attitude of horseplayers became obvious when I posted a similar question a few years ago on this very forum. This is from memory, so it may not be precise.

I expected to get answers like $1,000 per month, $20,000 per year, etc. And what I had really expected was that someone would go as high as $5,000 per month.

I was astounded to find that the highest response I got was $1,000.

Not $1,000 per month but total price!

I viewed this as a "franchise fee" of sorts. But apparently nobody else does.

Talk to an entreprenaurial type and ask them such a question. You might get answers as high as $15k per month if the business was low work and risk.

Regards,
Dave Schwartz

I'm surprised you were offered $1000.00. I would have expected more like $99.00 from the average capper. I guess, NO SALE, huh?

NDJ

Tom

03-08-2005, 10:45 PM

Dave - it would depend on the dta file price/month. I would assume the software would be FREE! :rolleyes:

Kreed

03-09-2005, 07:35 PM

Do you know if such a program exists? 66% winners from the top 2?
An avg $8.50 Win Payoff? I wonder what the Variation from those stats
could be? Also, Does an Exacta BOX yield the 85% P, or is it Top Pick
and 2nd-pick, Straight?

Dave Schwartz

03-09-2005, 08:59 PM

NDJ,

Actually, there were several takers.

There is a segment of serious, businessmen-horseplayer that is willing to spend a "reasonable" amount of money to make "reasonable times fifty."

They just don't walk around discussing it publicly.

Regards,
Dave Schwartz

traynor

03-09-2005, 09:34 PM

Some years ago, a fellow named Joe Karbo wrote a book about how to make money. If I remember correctly, his formula called for a 50% investment in advertising and marketing; most people went berserk at the thought. Spend thousands every month just on advertising? What a crazy idea!

It is a no-brainer to spend $10,000 to make $20,000--at least in the real world. Similarly, the value of a handicapping application is the amount of profit you can make with it. It has nothing whatsoever to do with the amounts charged for garbage programs elsewhere. Anyone who believes it does buys in to the old argument, "Waddya mean it doesn't work! It only cost $300! How can I possibly lose? There are programs out there that cost $2000 and they don't work either! This is only $300! Its a bargain ..."

The ratings I use cost so much that I would be embarassed to admit how much. However, my average return is more than double the amount I pay, so I consider them a bargain. I have no objection to someone else making a good amount of profit if I make a good profit, too. That is just good business.
Thanks

Dave Schwartz

03-09-2005, 09:47 PM

Traynor,

My sentiments exactly.

Dave Schwartz

NoDayJob

03-10-2005, 03:21 PM

raybo

03-15-2005, 05:07 PM

NoDayJob, "How Much Would You Pay? For a black box program, (if it existed), that could predict the winner out of the top two selections 66% of the time, playing all of the races except those exclusively for FTS. The average payout on straight bets at over $8.50 and better than 85% return on exactas using the top two horses when the M.L. odds are at least 3/1. Remember this is a hypothetical situation where you would be the exclusive owner of said program."

Ok, let me get this straight. You hit 2/3 of the races you wager on? And the average payout is $8.50 or 3.25/1 odds? Is that even possible? I don't know but the last time I checked post time favorites were winning a pretty good percentage of all races. Can you hit 66% of all races run and still average over 3/1? Maybe you can but it seems a little far fetched to me, but then I haven't really done much serious thinking about it. 66% winners with 2 selections is possible, but wouldn't that have to include a lot of low priced favorites? Maybe I'm all wet.

One of you database guys, run this through your DB and see if it can even be possible.

Short answer to your original hypothetical: If you could prove to me, 66% winning wagers and $8.50 average payouts, then that would be 41.67% profit on wagering cost (minus the other costs involved like data cost per card, etc). Assuming a reasonably short time period involved to recoup the original cost involved in the purchase of the software, I would definately be willing to shell out some pretty serious bucks if I could realize a net profit of 10%+ after all costs. I think anyone who has looked at the rates paid by banks and other such institutions would also be very interested. Even if the thing goes down the tubes the next year, enough could be made initially to justify the investment.

I made $4500 on an out of pocket investment of $400 last year, which includes 3 terrible losing months late in the year. So, was the investment worth it, even though it quit working eventually? Yes!!

I would be willing to do it again, ANYTIME!!

You come up with the software and the proof and give me a buzz!

sjk

03-15-2005, 05:29 PM

Since the average winning price is something north of $12.00 the average price condition would not be a problem. If you let me bet on yesterday's races I could probably manage a 66% win rate. I'm a long way from there if I actually have to choose before the races since I am used to operating at an 11-13% win rate.

Is there a theoretical limit to long-term ROI? If there is it would be interesting to know.

raybo

03-15-2005, 05:58 PM

sjk: "Since the average winning price is something north of $12.00 the average price condition would not be a problem."

Yes, but to hit 66% winners with 2 picks, in all races except races for FTS, you would be getting a lot of post time favorites. The horses that bring the average payouts to, "something north of $12.00", would not necessarily be included in that 66% winning %, don't you agree? Any program that would hit 66% winners with 2 picks and also hit the longshots necessary to average $12+ would be something approaching "the perfect handicapping program", and, your expertise not withstanding, I find that highly improbable. Now with a lower winning %, yes, that figure would certainly be possible. Basically, I believe that you can't have it both ways, high win % and high payout. Not with a black box, almost certainly. I can make a higher profit with my program but not without user input and not with 66% winners with 2 selections. I hit in the neighborhood of 45% to 50% with my first 2 picks.

Kreed

03-15-2005, 06:16 PM

You started this thread & its PURELY HYPOTHETICAL? You're beyond boring.
Here's what - about your tease - I think: YES. It's possible. I have some
issues (not just FTS but what about 2yr olds? and FT turfers?, but they're minor
points. Does the Top pick win MORE than the 2nd? I hope so. Would such a
system use the TOP 2 in EXACTAS OVER others? (I think so) or in BOXES
w/ Others (Maybe). With such a system, is it pointless to play P4's?
(I think so). 66% winners from the Top 2 seems (is) Mighty indeed, but I think
only likely from someone clever, dedicated, math-based, etc. I can tell you
that when Chase Manhattan Bank applied very advanced risk analysis -- and
put this ONE (yes 1) Indian mathematician in charge of the project, they spent
~30 Mil, but made ~450 Mil. A very nice return. My company has ~100
math nerds, physicists, biologists fully at work for the last 6 years all working
on various issues. With such a black box you can toss Odds Lines away.
(Wasn't it you NDJ who typed that in PA, maybe in another thread?)

NoDayJob

03-16-2005, 12:32 AM

raybo

03-16-2005, 07:06 PM

NoDayJob: "Perhaps, that Indian mathematician should be approached to see if this hypothetical program could be achieved in real time."

The "real time" portion of the statement you made is the key. It's one thing to run scenarios against a database, slicing and dicing as you desire, and quite another to duplicate the best of those results in real time. I learned that the hard way last year, in "real time". The results I had acheived from the past were met, even surpassed, for 3 months and then went down the tubes. That is the problem with using the past to predict the future. You can certainly learn many things from the past that can be applied to the future, but you must stay aggressively involved with the present "real time" results in order to stave off the inevitable slowdown or outright failure of any static selection system. This fact alone, is very depressing for anyone trying to find a computerized handicapping "black box" system so that they don't have to think anymore. We will always have to think and analyze to a certain extent I believe. It's a nice dream, and worth working towards, but probably not very probable. Most "mathy" type people in our business understand that probabilities are only valid over a long period of time and require tremendous amounts of patience and courage, to say nothing of possessing a large bankroll to weather the losing streaks.

Kreed

03-16-2005, 08:06 PM

maybe both of you did NOT understand my post: CHASE MANHATTAN pulled
that Profit in, and traced it to this man's math strategy. But what a plus
they have over mortals like us: They can adjust their Fees according to their
clients "Risk Score" & they (and now others) do just THAT. Much better than
insurance acturaries. Betting or not according to real odds v odds line
tries to duplicate this, but IF YOU COULD NOT JUST SEEK THE RIGHT ODDS
BUT SET THE ODDS (as Chase started) then think what an advantage that
would be? That explains why the usury laws do NOT apply to CC companys.
They would Lose BILLIONS, overnight, if such caps were done.

osophy_junkie

03-17-2005, 01:02 AM

You can certainly learn many things from the past that can be applied to the future, but you must stay aggressively involved with the present "real time" results in order to stave off the inevitable slowdown or outright failure of any static selection system. This fact alone, is very depressing for anyone trying to find a computerized handicapping "black box" system so that they don't have to think anymore.

Horses change, track conditions chance, people betting change, etc... Any data used in a model should be the most current up to the point in time being tested and should be recency weighted. The only advantage to having several years worth of data is to simulate how your program reacts to noise. Noise that exists from Jan 2001 to Mar 2001 shouldn't be any different to a model than Jan 2002 to Mar 2002. All other changes should be accounted for by your model. The amount of noise and how you control it relate directly to you margin of error and potential risk.

A good "black box" system would be able to adjust itself to deal with changes in contention competion and adjust factor weight accordingly. It should also be able to recalculate any necessary figures. Of course the more a technique is used the less profitable it becomes. If everyone was using this black box it wouldn't matter what change it accounted for or how often it updated it's data.

Most "mathy" type people in our business understand that probabilities are only valid over a long period of time and require tremendous amounts of patience and courage, to say nothing of possessing a large bankroll to weather the losing streaks.

I've had to be neither patient, couragious or rich. If one doesn't have enough confidence to run a system without watching it nonstop, the system needs work. Appropriate precautions should be taken to account for risk, removing the need for courage. And one thing that drew me towards horse racing was the relative small amount of capital needed. Unlike the stock market you are guaranteed to the maximum amount you can lose, however the amount returned is unlimited.

Ed

raybo

03-17-2005, 03:02 AM

"I've had to be neither patient, couragious or rich. If one doesn't have enough confidence to run a system without watching it nonstop, the system needs work. Appropriate precautions should be taken to account for risk, removing the need for courage. And one thing that drew me towards horse racing was the relative small amount of capital needed. Unlike the stock market you are guaranteed to the maximum amount you can lose, however the amount returned is unlimited."

Well, sounds like you've got it all figured out and are making a fortune. Good luck.

traynor

03-19-2005, 06:43 PM

osophy junkie wrote <Any data used in a model should be the most current up to the point in time being tested and should be recency weighted. The only advantage to having several years worth of data is to simulate how your program reacts to noise.>

Unfortunately, the myth of recency is one of the biggest reasons losers lose. It is usually called the Law of Small Numbers, and any number of extensive research has been done on the topic. The bottom line is that short models generally reflect only a wobble from a baseline, and are in no way representative of the general population. The reason most people love short models is that they can be interpreted to mean whatever you want them to mean.

I agree that years of results can be as misleading as imagining that a few hundred races can generate meaningful data; the real trick is to use a model large enough to be predictive, yet small enough to reflect something more than ancient history.
Thanks

Kreed

03-26-2005, 11:53 AM

YES. Just to witness such a systems' picks. I've mulled NDJ's tease and,
based on my own figs, I would say that such stats are doable. And no
matter how good Fiero's book is, with such a system (66% winners Top 2
and Payoff of ~$8.50) there would be NO neeed for creating an odds line.
I'd like to know if anyone here has a system that's even close to those stats?

raybo

03-26-2005, 03:37 PM

Kreed: "with such a system (66% winners Top 2
and Payoff of ~$8.50) there would be NO neeed for creating an odds line.
I'd like to know if anyone here has a system that's even close to those stats?"

My point exactly. I've been crunching numbers with a computer now, in one form or another, for almost 20 years. I've found some decent systems that would pick winners with 1 selection at around 40% and with 2 around 68%. And I've found some that would produce avg returns over 7/2, but never have I done both at the same time with the same system. That is the main reason I gave up WPS wagering many years ago. If all I wanted was 10% ROI, I could do that with much less risk, and no stress at all, using investment vehicles other than horseracing. As I stated before, if anyone can show me "real time" performances of the magnitude alluded to in the above statement, I would be very, very interested.

classhandicapper

04-05-2005, 12:01 PM

I think a reasonable way to think about what you would be willing to pay for any software or information is to determine how ROI positive it might be for your results and what that nets out to in dollars.

Let's say you pay $25 per day for information and you bet $250 per day.

For that purchase to make sense it would have to ADD more than 10% to your ROI to make sense. That's a huge hurdle. If you were losing $25 per day before and you are losing just $12.50 afterwards, even though the service has value, it doesn't have enough value to you and you should stop buying it. Even if you think the information is great, you should obviously stop buying it (from a purely economical point of view) .

If however you were losing $100 per day and afterwards you were only losing $50, then on assumption you are going to continue playing anyway, it would be worth more than $25 to you.

The intrinsic value of any service or software doesn't perfectly correlate to profits or losses. It correlates to the incremental value for YOU specifically.

04-05-2005, 02:08 PM

Responses like this just crack me up:

If all I wanted was 10% ROI, I could do that with much less risk, and no stress at all, using investment vehicles other than horseracing.

First off, you could be a very wealthy man making 10% betting horses. The difference with typical investing is that you can "invest" the same money over and over again every 10 minutes or so in racing.

Think about it this way. Your actual investment is not the amount of money you put through the windows, because much of it is the same money over and over again. Start the year with a $10,000 bankroll dedicated to horse racing. Bet 1% ($100) on 20 races a day, 5 days a week, 50 weeks a year. You've now put $500,000 through the windows. Make 10% on that, and you've made $50,000. You investment was 5,000. So what's that 10% ROI really equal?

Jeff P

04-05-2005, 11:32 PM

I like to draw the analogy between a positive roi in horse racing and compound interest. With an investment account, that compounding process takes years. In horse racing, if I truly know what I'm doing, I can shorten that time period from years to hours. :cool:

.

raybo

04-06-2005, 04:50 AM

"So what's that 10% ROI really equal?"

I don't know anyone that bets $500,000 a year. I was aluding to the fact that the vast majority of wagerers are losers, or if they are winners, they are very small winners, in the neighborhood of 2-5% long term. There are many ways you can earn 10% on a long term investment. If I had $500,000 to wager in a year,( if it's even possible to bet that much and still have time to do the handicapping necessary to produce a profit), I wouldn't be worrying about only getting 10% for my time and effort. I know there are some people that bet lots of money in a year's time but i've not met anyone betting like that and not losing money in the end. 66% winners with 2 selections and average payouts of $8.50 looks like about 112% profit to me, huh? Unless I'm figuring wrong, (2 horses at $2 each and you get back $8.50, that's $4.50 profit on a $4 investment). Beats 10% all to hell.

Like I said if they can show that in real time, they'd be silly to sell it.

04-06-2005, 05:56 AM

All I said was comparing 10% ROI to a 10% gain on normal investments is an invalid comparison. People are betting lots more than 500k per year, and I doubt all of them are losing.

Even at your 2 to 5% that you say is small, it equates to much more when you look at the way I outlined below, and I don't know anyone who would sneeze at that type of return. With rebates you can turn a slight loss into a very nice profit.

raybo

04-06-2005, 06:25 AM

Jeff P : "I like to draw the analogy between a positive roi in horse racing and compound interest. With an investment account, that compounding process takes years. In horse racing, if I truly know what I'm doing, I can shorten that time period from years to hours."

cj : "Your actual investment is not the amount of money you put through the windows, because much of it is the same money over and over again. Start the year with a $10,000 bankroll dedicated to horse racing. Bet 1% ($100) on 20 races a day, 5 days a week, 50 weeks a year. You've now put $500,000 through the windows. Make 10% on that, and you've made $50,000. You investment was 5,000."

You both pointed out the same fact, that you can make lots of money very quickly in horse racing, (and conversely, you can also lose lots of money very quickly), because the results are in minutes rather than months or years. But, let's not get too carried away with that analogy. You have to win to make that profit. And when you look at it long term, the profits you made short term really aren't true profits because they are going back into the kitty. They are simply costs of doing business. If you don't make profits as you go, to re-invest, then you are a net loser long term. Most people who think that way are not keeping good financial records on their wagering and are just trying to stay in the game without Momma running them out of the house. At the end of the year or after 5 years or 10 years, if you have a net profit then you have been successful, otherwise, you're just another Joe, gambling and losing. (No inferences to your own rate of success/failure is intended.)

cj, 10% net profit on your investment of $10,000 would be $1000 not $50,000. Net profit, to me, is based on out of pocket money. For example: I put $400 in my Brisbet account over a year ago and never added any more to it and I now show $4545.60 profit, (1125% net profit), [($6111.60 won minus $1566.00 bet) divided by $1566.00 bet = $4545.60 profit], while the $1 ROI is $2.90 (only 290% based on money wagered, not my true investment amount). Whereas, if I'm talking about a 10% net profit I would have made only $40 last year.

But then if someone has a program that will produce $4.50 profit for every $4 bet, ($1.12 ROI or 112% profit), and it's a black box that doesn't require all the brain torture I am presently experiencing with my current handicapping methods, then I would definately be interested, wouldn't you?

sjk

04-06-2005, 06:54 AM

Raybo,

I think in the example you cited you only win the $8.50 66% of the time for an average payout of $5.61 which still works out to a 40% ROI.

If you are adequately capitalized (and if you have been playing for a while with a positive ROI and have not made excessive withdrawals you would almost have to be) there is no need to re-invest short term profits in the kitty.

I don't find CJ's example unreasonable in any way. There are probably players making $50k a year doing just that.

raybo

04-06-2005, 07:41 AM

sjk : According to the first post in this thread: "The average payout on straight bets at over $8.50."

Sounds like he means average payouts of $8.50 on all bets, not just the 66% won. Whatever, I don't think both factors together are acheivable. To win 66% of your bets with only 2 selections would mean a lot of low priced favorites are in the mix because they win so many races. That $8.50 avg mutuel would be hard to get under those circumstances, IMO.

The other situation you mentioned I can't argue with too much because I have not heard of anyone wagering $500,000 in one year before. I'm sure there are, I mean there are people who wager more than that at the Vegas casinos in one night, but we're talking about serious handicappers here, who know the game and are successful. I don't know of any that fit that description who would be wagering that much money annually. And when there are discussions about real, actual ROI's that people have actually acheived, it's always expressed as $1 ROI or for every dollar bet they were returned $1.10 or something similar, which is only 10% profit. and most don't do that well over time. We're talking win bets here, not pick 3's or pick 4's or tri's or supers. I just can't see many people betting win tickets making much more over the long haul unless they are picking their spots very carefully and loading up. To expect a black box system to pick 66% winners with 2 selections and also pay back 112% profit for all races except FTS's is really hard for me to visualize ever happening.

Kreed

04-06-2005, 07:46 AM

I think Barry Meadow is an example of a NO-BLACK BOX player, but one who
probably would not make a dime (consistently) if rebates didn't exist. Since
his style is not a black box it doesn't interest me, but the idea that ANY system
can get close to break even & then be a money maker via rebates opens up
many, many possibilities. There are 3 parts: (1) Predictive Factors. Yeah,
pace-speed, etc, but make sure that these Factors are what you think they
are. T&M (tests & measurements) make a big say here. (2) Strategy. How
do you USE these factors? Just think, your factors are right-on but if you don't
use them right, you toss out the winners & keep too many losers. (3) Test it.
Take samples of 500 races ONLY. NO MORE. Get a system that doesn't go
wild from one 500-race sample to another. That's it. Sacrifice anything to
get a STABLE system that comes within a few points of break even. Then
bets lots of money & stash the rebates.

raybo

04-06-2005, 08:06 AM

kreed : "Sacrifice anything to get a STABLE system that comes within a few points of break even. Then bets lots of money & stash the rebates."

So what you're really talking about is a net profit under 10% or whatever the rebate % is. Aren't there better, more consistent, safer ways of producing 6 or 7% profit? Decent mutuel funds are just a guess for long term profits. I got into this game to make sizeable returns that are realized quickly and that continue long term, the best of both worlds, short term cash flow and long term gain on investment. So far, I've acheived that even after a horrendous run of losing wagers toward the end of last year. I could have easily made much more money by simply increasing the size of my wagers but I was in a testing mode and had made a conscious decision early on to wager the same amount until I either proved or disproved my theories. What I didn't count on was the psychological distress I experienced with the losses after all the highs I had experienced earlier. I suppose if I were a true gambler in heart and character I would have handled it better, but I'm not and I didn't. I don't like gambling and never have, I'm far too conservative with money for that. So, for me to put my hard earned money at risk on something as fluky as horse racing I had to have a pretty good expectation of earning a sizeable profit, not one in the neighborhoood of less than 10%. I can get that in much less stressful ways. It would be nice to come across something that's reliable and easy on the brain that would produce a good profit but, "I ain't holdin my breath"!

04-06-2005, 08:19 AM

raybo,

I agree with most of what you say, but again, you cannot compare a 6 or 7% ROI to earning 6 or 7% on a mutuel fund. They are not the same thing.

Even if you lose 3% but get a 5% rebate in racing, you are getting +2% on each bet. So again, lets start out even smaller. Let's say a guy puts 100,000 through the window a year, which I know that I do. He has made 2,000 dollars. However, you could easily bet that 100,000 with a bankroll of 1,000, meaning you've made 200%, not 2%. If I invested that same 1,000 in a 10% mutuel fund, I would not have $3,000, I would have $1,100, or $100 profit. Add in that a mutuel fund earning 10% is far from safe, and the picture changes.

I don't know a single person that would sneeze at turning 1,000 into 3,000 in a year. I think your expectations are totally unrealistic.

NoDayJob

04-06-2005, 03:20 PM

[QUOTE=raybo]"So what's that 10% ROI really equal?"

66% winners with 2 selections and average payouts of $8.50 looks like about 112% profit to me, huh? Unless I'm figuring wrong, (2 horses at $2 each and you get back $8.50, that's $4.50 profit on a $4 investment). Beats 10% all to hell.

:lol: :lol: :lol: :lol: :lol: :lol: :lol: :lol: :lol: :lol:

$8.50 * .66 = $5.61

$5.61 - $4.00 = $1.61

$1.61 / $4.00 = 40.25% ROI sans any compounding of original starting capital.

NDJ

NoDayJob

04-06-2005, 04:04 PM

Starting Capital:

$20,000.00

Wager Per Race:

$100.00

Wager 20 Races Per Day:

$2000.00

Average Capital Increase
Per Day @ 66% Winners
Betting 2 Horses At $8.50
Sans FTS:

$2000.00 * .4025 = $805.00

==============================

Capital Would Double every 25 Days Or Less
Not Counting A Wagering Increase Until You
Have Doubled Your Starting Pool.

You Could Safely Bet $300.00 Per Race At Most
Major Tracks Without Influencing the Odds More
Than !0% Over A Racing Season. Your Return
Less Expenses Would Be Over $400,000.00 Per
Year On An Initial Investment of $20,000.00.
No Employees Either, Unless You Use A Runner
At The Track.

NDJ

NoDayJob

04-06-2005, 04:18 PM

Your Return Less Expenses Would Be Over
$400,000.00 Per Year On An Initial Investment
of $20,000.00.

NDJ

This based on working 200 racing days a year.

NDJ

raybo

04-06-2005, 05:30 PM

cj : "However, you could easily bet that 100,000 with a bankroll of 1,000, meaning you've made 200%, not 2%
2% of $1000 is $20, no matter how much you put through the windows. If I am going to invest in any proposition, my investment amount is the amout of cash I take out of the bank and prepare to kiss goodbye if things go south. The money I put at risk is only that initial investment, therefore, profit has to be based on that INITIAL INVESTMENT. Now if you want to talk about your average profit on all bets you place , then we are talking about apples and oranges. If I give someone $100,000 on a venture he is undertaking and 2 days later he gives me back $102,000 then my ROI is 2%. If I only give him $1000 and I make 2% then he gives me back $1020.

Obviously, we are not talking about the same thing here. If you took $1000 out of your bank account to gamble with and a year later your bankroll was $1020 then you made $20 for the year or 2%. I don't care if you bet $10,000 or $100,000 through the windows. You can't spend that money or you won't have anything left to continue wagering with. That is operating money, it's a far cry from net profit. Now, if at any point during that year you happen to have a bankroll of say $3000 and you remove that money and don't wager anymore, then now, you have made 200%. Bankroll gain and net profit are only the same if you quit betting. Lots of people get this confused and wonder a year later where all the money went. The amount of money in your bankroll at the end of the wagering period determines your profit percentage for that period, not the fact that you bet $100,000 that period. Beginning investment and ending balance is what matters.

cj : " I don't know a single person that would sneeze at turning 1,000 into 3,000 in a year. I think your expectations are totally unrealistic"
Turning $1000 into $3000 would be 200% profit. Have you done that recently? If you have then you certainly must understand what I'm saying. The ratio of amount wagered and net profit is an analogy that many make, and it's a mistake for them to do so, IMO. The quality of your investment is measured by the amount of gain you experience, net profit. If I don't have a bigger bankroll at the end of the year and I haven't withdrawn any money during that time then I have made NO MONEY, NO PROFIT.

04-06-2005, 05:43 PM

Yes, I have done that recently, several times. I don't change my initial bankroll. And my initial investment is still there to be invested again, and again.

I think we are saying the same thing, but I'm not sure. My point is this, when you wager 100,000 through the windows, you are not "investing" 100,000. You can only lose what you start with, which is your initial bankroll.

So, in a nutshell, given a 2% ROI and an adequate bankroll, maybe 10,000, you can make a lot of money.

That same 10,000 invested in a traditional way, even making 10%, can not approach the above.

sjk

04-06-2005, 05:43 PM

Raybo,

What if you start your account with $500 and some time later you remove $5000 and then later another $5000 and then later another $5000 and so on but you never quit betting.

How would you calculate the return other than as a percentage of the amount bet?

raybo

04-06-2005, 06:12 PM

NoDayJob :

$8.50 * .66 = $5.61
$5.61 - $4.00 = $1.61
$1.61 / $4.00 = 40.25% ROI sans any compounding of original starting capital.

(WHY WOULD YOU MULTIPLY THE AVERAGE PAYOUT BY THE WIN%? :ThmbDown: The average payout should only apply to the payouts you received, not to all the races you bet. In the above statement your average payout is $5.61, not $8.50)

Glad you finally cleared that up. :confused: Wouldn't it be smarter to only look at the payouts that you actually won? Say you bet 1000 races and won 666 (66% win pct.) with 2 selections, and the average payout you received was $8.50. You would have invested $4000 (1000 races x $4 flat win bet), you would have received $5661 in payouts (666 wins x $8.50 average mutuel payout for those 666 wins), your profit is $1661 or 41.525% ($5661 Payouts minus $4000 bet=$1661 profit and $1661 divided by $4000 bet is 41.525% profit).

Why would you even want to know all the payouts for all the races you bet that you didn't win? I don't know anyone who works with the numbers like that. What purpose does it serve? IMO, what really counts is how many winners you have and what those winners paid. I don't care what the winners in losing wagers paid. They could have paid $50 but that doesn't help my bankroll any. 66% winners, to me, means I win 2/3 of all the races I wager in. If your average payout is $8.50 and you,ve invested an average of $4 then your profit is $4.50 or 112% profit. To have only a 40.25% profit the average payout would only be $5.61 not $8.50.

Can you produce 40.25% profit with a black box? If you can, do you want to sell it? If the answer is yes to both questions, call me!

raybo

04-06-2005, 06:22 PM

sjk : "What if you start your account with $500 and some time later you remove $5000 and then later another $5000 and then later another $5000 and so on but you never quit betting.
How would you calculate the return other than as a percentage of the amount bet?"

:eek: Man if you are doing that then my hat's off to you! Your net profit at the time you withdrew the 1st $5000 was $5000 or 1000% profit. At the time of the 2nd $5000 withdrawal you had experienced another gain of $5000 or another 1000% profit and again when you withdrew the 3rd $5000, another 1000% profit. You have made $15,000 on a $500 investment, that computes to 3000% profit. Nice little venture you got going there dude.

Want a partner? :D

sjk

04-06-2005, 06:31 PM

Thanks but no. Sounds like you are doing well on your own.

Seriously, I think you get a more useful measure if you divide by the amount bet. The amount placed in the account in my example was a spur of the moment decision. It could just as easily been $300 or $1000. Why should that decision be affecting your ROI ten years later.

raybo

04-06-2005, 06:49 PM

cj : "So, in a nutshell, given a 2% ROI and an adequate bankroll, maybe 10,000, you can make a lot of money."

Yes, if you make 2% on every dollar you wager, depending on how much you wager, you can indeed make a lot of money. But, you have to have a positive $1 ROI for this to work. I have never heard of a black box with a positive ROI except on very specific race models and finding enough of those specific races to bet would be your problem. And then there is no guarantee that the model will continue to produce profit over time.

I think we have confused TOTAL ROI with $1 ROI. When Brisbet shows my ROI on my statement (+2.90) or 290%, it is based on total my amount wagered ($1566) and my profit/loss (+$4545.60). However my total ROI on my investment ($400) is (+11.364) or 1136.4% ($4545.60 / $400). I guess it really boils down to how you use the money you win. If you are using it as an income then your initial investment only has to stay the same. However if you are using it as a retirement fund then you want that initial investment to grow over time. If you take money out to pay bills and buy food you better be winning a lot of money per $1 bet, consistently. If you don't take money out, but reinvest the winnings then you don't have to win so much money or be as consistent, to grow your investment. It's just a matter of how you look at it.

hurrikane

04-06-2005, 08:40 PM

it must be getting close to tax time.

I think everyone goes through this clarifying discussion every year. Maybe closer to 6 months.

the biggest problem seems the investment world has everyone thinking in APR or net annual ROI. The funny thing is that money..by itself, knows nothing of time. so when someone says a net ROI or 10% the real question is - over what period of time?

like the guy who won the polish lottery. 1 Million bucks! Pays $1.00 a year for 1 Million years.

500K bet in a year is not large. If you think so then you are not thinking big enough.

10% ROI(on every dollar bet!) is great. take it to the bank.

If anyone tries to tell you to put your 'at risk' investment money somewhere else just smile you're wry 'dumb like a fox' smile and walk away.

good luck

Pace Cap'n

04-06-2005, 10:33 PM

If a $1000 investment returns $3000, the rate of return is 300%.

A little story:

At the high school reunion, the class dummy comes pulling up in a chauffer-driven limo, dressed to the nines with lots of bling. Everyone was astonished. One dude says, "Man, I never thought you'd amout to anything. How did you do it?"

Guy says, "Well, after school I went to work in the oilfield. Then I invented this little tool that I can make for a dollar and sell it for three. As long as I get that steady 3%, I've got it made."

04-07-2005, 03:46 AM

it must be getting close to tax time.

like the guy who won the polish lottery. 1 Million bucks! Pays $1.00 a year for 1 Million years.

Hey, watch it!!! :jump: :jump: :jump:

Kreed

04-07-2005, 08:25 AM

Now I know why you're NDJ ... who would want one with those returns?
And thanks for displaying some cool business arithmetic when you showed
the right ROI formula. For a hypothetical what-if, NDJ, you've obviously
tinkered with the hypothetical payoffs.

NoDayJob

04-07-2005, 02:08 PM

And thanks for displaying some cool business arithmetic when you showed
the right ROI formula. For a hypothetical what-if, NDJ, you've obviously
tinkered with the hypothetical payoffs.

:D Of course, you don't need $20,000.00 to start either. $1,000.00 plus your daily expenses would suffice ($5.00 bets to start). Say, $2,000.00, adjusting your wagers to 1/200th of your betting pool as it increases. Assuming doubling your pool every 25 days, you'd be at the $300.00 wagering level in about 150 betting days. Neat, then you could quit YOUR day job in about a year. Beats most businesses I've seen. :D

NDJ

traynor

04-27-2005, 01:52 AM

raybo wrote <The other situation you mentioned I can't argue with too much because I have not heard of anyone wagering $500,000 in one year before. I'm sure there are, I mean there are people who wager more than that at the Vegas casinos in one night, but we're talking about serious handicappers here, who know the game and are successful. I don't know of any that fit that description who would be wagering that much money annually.>

The figures seem like a lot when you put them all together, but they are often made one race at a time. For example, if someone bets $50 on one horse to win, bets 10 races a day, that comes to $130,000 and change yearly. Betting $200 a race, 20 to 30 races a day, is not uncommon. That is, $4000 - 6000 a day goes through the windows, but a lot of that is from wins, not the kid's college fund. The initial bankroll may only be $1000-2000, and most of the rest of it is just trading paper, like Monopoly. While not an everyday event, $5000 in wagers in a day is not unusual. $500,000 a year may seem a lot, it really is not.
Thanks