Profit Taking Question

[banacek]

I am curious to how people profit-take (if they do). I started wagering in March (I take Jan/Feb off) with $2000 for the year and have been doing really well - it is now a little over $6000. Would you profit-take? If so, how much?

I have typically started the year with a bankroll and do not profit-take (or add to it) as I go. At the end of the year, I take any profits (hopefully), and start with a new bankroll the next year.

I kind of like to see what the bank will get to by the end of the year, but a little voice keeps telling me to take out my starting $2000 and then see what happens.

So put yourself in my shoes, how much of the $6000 would you take out now? (I'd also love to see any comments on how people profit-take in general.)

[Pace Cap'n]

Take the 2g's, increase bet size by 25%, build to $6000, take another $2000, increase bet size by 50% (from original), etc.

[Overlay]

Not profit-taking at this time gives you the potential to keep on doing what you've been doing, but on a larger scale, which might mean exponentially greater gains. Cutting back to your original bankroll would give you $4,000 to spend, while being in the same position you started in. I guess it all depends on your confidence in your handicapping model to keep replicating the results you've achieved so far. Do your latest results provide any indication as to whether your rate of profitability is tailing off, or has it been fairly constant throughout? And what about your performance in specific types of races?

[JustRalph]

Ask your wife............. I bet she can find something to do with it. :lol:

I always take a cut for the house...............and almost always make it something fun.........new furniture.....some new electronics .......... then I start over............with the same bankroll or maybe a little higher............it keeps you motivated and makes it fun..........

[K9Pup]

So put yourself in my shoes, how much of the $6000 would you take out now? (I'd also love to see any comments on how people profit-take in general.)

I think it depends on the person.

Do you NEED the money?

Is there something you WANT to buy now?

But more importantly does having "extra" money in your account change the way you wager???

[melman]

First of all congrats on turning $2,000 into just over $6,000 in the space of six weeks. That is some great work. I voted "take $2,000" but so much depends on your goals in betting in the first place. From your post in seems that in the past you were comfortable with not "profit-taking" but with your great start to the new year your having second thoughts. If your overall financial position is one that is very solid and the $2,000 starting bankroll is small in your overall outlook, then I would not profit take at all. Even if you are in a very solid overall position however but know that you will be facing a major expense in the next year or so then I would profit take and bank that sum for paying for that expense. Example of "major expense" would be home improvement work or purshase of a major item that is outside your normal budget.
The answer to your question is such an individual thing as to make it a very tough question. :) Review your goals and ask yourself if you would be comfortable with betting larger amounts.
One other thing, write a check to your favorite charity, you will never regret it.

[GaryG]

I was feeling generous so I gave the IRS a nice big chunk.

[BIG RED]

I really want to answer this, but I really can't. So, I would have to agree in part with melman. It's all in what your personal play is.

A simple answer would be take half. It leaves you with more than you started, with leeway. Buy something nice that you will remember or see all the time, with the profit taking > Fruits of your labor.

[boomman]

BanaceK: First of all, keep up the good work! I voted for you to leave it all in, because my theory is that since I never make a bet above 5% of my bankroll at any time (and thus my recommendation to anyone who wants to play for a profit longterm) that increasing your profit with increased bankroll simply allows you to make more profit. If you continue on the way you have, and (I have no doubt you can) a $6000 bankroll should result in a profit of $12,000 with an ending bankroll of $18,000. At that time, you could withdraw $8000 (which is $2000 more than you have now) and play out of a comfortable bankroll of $10,000. And even if your profits drop from 200% to 100%, you will still have amassed an extra $6000, which would enable you to put your original $2000 back in your pocket and play from the $10,000 bankroll....

Continued success,

Boomer

[melman]

GaryG
I said a charity not this IRS. :jump:
Banacek
Also what TYPE of bets have driven your increase in captial?? Are you mostly a win or w/p bettor> or do you mix in some ex's and dd's and pic bets?? If mostly a win or w/p bets then that would make for a strong indication to not take any profit out. I really liked Boomman's post also. Good thread starter Banacek food for thought.

[chickenhead]

Warren Buffets top two rules of investing:

1.) Don't lose the money.
2.) Don't forget rule #1.


If you're comfortable with your bet size, and your strategy, and don't have any better way to deploy that money right now, leave it in. If you feel very worried about the bet size, or feel in danger of becoming reckless, or have something else you'd like to do with the money, take it out.

I don't see any point though in talking about your initial investment...that's an arbitrary number. You have $6000, decide what to do with it on its own merits. Where you started has nothing to do with anything. The Warren Buffet rules are about ALL the money, not just your seed capital. Don't let yourself off the hook so easy, it's a halfway excuse to saying it's ok to give it all back.

I know myself, I get reckless, I do bad things. I therefore limit my bank on purpose, I don't really let it grow very much because I haven't been able to handle it yet. For best results I need to feel squeezed by my bank. Something I will probably always be working on, it has been a significant problem for me.

[banacek]

GaryG
I said a charity not this IRS. :jump:
Banacek
Also what TYPE of bets have driven your increase in captial?? Are you mostly a win or w/p bettor> or do you mix in some ex's and dd's and pic bets?? If mostly a win or w/p bets then that would make for a strong indication to not take any profit out. I really liked Boomman's post also. Good thread starter Banacek food for thought.

Thanks for all the advice. Win bets only. And I'm Canadian, so no taxes to worry about, but charity is a good idea. I'm leaning towards leaving it as is. I don't desperately need the money right now, so probably better to keep on.

And Melman, if I had been betting your harness picks, I'd be up $10000 instead!

[Robert Fischer]

When i was using an off-shore, I took out my initial investment when I reached a certain profit. It wasn't a big deal, and I felt better about it.

If you have a reliable service I don't see a reason to withdraw your investment. Sounds like you are doing well. :ThmbUp:

[JPinMaryland]

You should keep the $6000 and go for a spot play in the derby. I was going to say the all/all/all trifecta but that would cost too much. If you go:

ALL - Curlin/ALL -Tiago/ALL - Street Sense

in the trifecta that would only cost $5814 if my math is correct. Curlin has not faced any competition, Tiago is too slow and everyone will have SS in the trifecta so you are not risking much by letting these horses beat you. The potential payout here could be huge. :jump: