What does ROI stand for

[monistee]

My mind isn't working! That does ROI stand for. Is it "readers own interest". I know it something simple. Your help would be appreciated.

[monistee]

That should be " what does ROI stand for. Thanks!

[46zilzal]

Return
On
Investement

[TJDave]

Return
On
Investement

Is that French? ;)

[monistee]

Thanks! Joe

[Robert Goren]

Little known fact, ROI is indeed French. It loosely translates to "How stupid is this bet?";)

[Overlay]

Le ROI est mort. Vive le ROI! :)

[David-LV]

Return On Investment - ROI

What Does Return On Investment - ROI Mean?
A performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. To calculate ROI, the benefit (return) of an investment is divided by the cost of the investment; the result is expressed as a percentage or a ratio.



The return on investment formula:

ROI =
(GAIN FROM INVESTMENT - COST OF INVESTMENT)

---------------COST OF INVESTMENT--------------

_________
David-LV

[raybo]

For horse racing here it is, simply:

Total payout amounts - Total wagering amounts = Net profit ($ profit)

Net profit / Total wagering amounts = ROI (net % profit)

[BlueShoe]

In the old days we just called it "flat bet profit", (or loss). ROI seems to be a relatively new term that has made its way to the racetrack.

[mountainman]

Recall a 'new' moderator on another forum claiming to have no knowledge whatsoever of racing, and then using the term 'ROI' (quite correctly) in some post shortly after. Must have been a (very) fast learner.

[GameTheory]

In the old days we just called it "flat bet profit", (or loss). ROI seems to be a relatively new term that has made its way to the racetrack.ROI does not necessarily refer to flat bet profit (or loss), unless you've been flat betting; so it is a more general term. You'd have to specify flat bet ROI to be clear...

[PhantomOnTour]

Running
Out of
Income

ROI

[CBedo]

ROI does not necessarily refer to flat bet profit (or loss), unless you've been flat betting; so it is a more general term. You'd have to specify flat bet ROI to be clear...Exactly. Flat bet profit, when in regards to a single bet, is more of a profit margin than a return on investment measure. In business terms, your return on assets is your profit margin multiplied by your asset turnover, which equates to your flat bet expectation times the number of times you turn over your bankroll. Then, your return on equity (somewhat equivalent to roi) is your roa multiplied by a leverage factor.

[formula_2002]

My mind isn't working! That does ROI stand for. Is it "readers own interest". I know it something simple. Your help would be appreciated.

Here is good example of a positive ROI:

http://www.paceadvantage.com/forum/showthread.php?t=66992 :)

[therussmeister]

In the old days we just called it "flat bet profit", (or loss). ROI seems to be a relatively new term that has made its way to the racetrack.

Recall a 'new' moderator on another forum claiming to have no knowledge whatsoever of racing, and then using the term 'ROI' (quite correctly) in some post shortly after. Must have been a (very) fast learner.

It may (or may not) be a relatively new term in horse racing, but I doubt it is new outside of the horse racing world.

[Nitro]

Lets say one guy goes to the track (or OTB) with $50 and returns home with $500, the flat bet gross profit is $450. (It has nothing to do with how many bets were made).
If during the course of the day this guy made 5 bets amounting to a total of $200 the calculated ROI is $300 (total net profit) / $200 (total wagered) = +150% .
However, the Total ROI is calculated as $500 (gross return) / $200 (total wagered) = 2.5

Another guy goes to the track (or OTB) with $500 and returns home with $950, the flat bet gross profit is still $450.
If during the course of the day this guy made 5 bets amounting to a total of $500 the calculated ROI is $450 (total net profit) / $500 (total wagered) = + 90% .
However, the Total ROI is calculated as $950 (gross return) / $500 (total wagered) = 1.9

Both guys return home with the same “real” gross profit of $450. The ROI concept simply tries to imply that one player happened to be more efficient that day then the other at achieving the same goal. I think if you’re a goal orientated type person and you understand the limitations of your bankroll, it shouldn’t matter very much how you achieve your goal (or how long it takes) as long as you can achieve the desired results within a reasonable amount of time. The bottom line is that profit is profit. Improving the betting efficiency (or ROI) simply accelerates the means to realize that profit.

From a business standpoint it’s an all-together different story, because you’re always looking to achieve that gross profit (goal) within a specific amount of time in order to cover all expenditures that are due within that time frame. In order to do so, the efficiency (ROI) factor becomes very important. So unless a person’s only source of income is derived soley from the profits made from playing this game, the ROI concept really shouldn’t be of much concern.

Personally I’ve always liked the concept of gross profit as it relates to improving the bankroll. As the bankroll increases so does the size of the wager (as a percentage) of that bankroll. So as long as the accepted positive ROI factor remains about the same, I’ve accelerated my ability to reach specific monetary goals not by improving the betting efficiency, but by simply increasing my bets.

[mountainman]

It may (or may not) be a relatively new term in horse racing, but I doubt it is new outside of the horse racing world.

Neither is the term 'fractions,' but if a supposed newbie began spouting confidently about some horse's 3/4 split, THAT wouldn't be a red flag for you?

[2low]

Neither is the term 'fractions,' but if a supposed newbie began spouting confidently about some horse's 3/4 split, THAT wouldn't be a red flag for you?

Anybody with any minimal exposure to business/finance/accounting would absolutely use and understand ROI as a measuring stick in horse racing right off the bat.

[Watcher]

Anybody with any minimal exposure to business/finance/accounting would absolutely use and understand ROI as a measuring stick in horse racing right off the bat.
Exactly what I was going to post.

[BlueShoe]

Prefer the old basic method, flat bet profit, and will stick to it. Back then, when evaluating your results a theoretical $2 bet was assumed, regardless of the actual sums wagered. You could have been betting 2 dollars, or 20, or 200, 17, 33, 74, etc., or widely different amounts, it did not matter. If you made 50 bets during the month at an assumed $2 on each wager and the payoffs added up to $117, your selections had earned a 17% flat bet profit.

[mountainman]

Anybody with any minimal exposure to business/finance/accounting would absolutely use and understand ROI as a measuring stick in horse racing right off the bat.

Not a chance. The game is pure sensory and mental overload. People unexposed to the sport spend the first day pouting because Zenyatta doesn't happen to be in when they visit Beulah. And the second day asking if the horses are muzzled like greyhounds to prevent biting each other. After that comes curiosity about program and form symbols and a struggle to understand that bettors don't wager against the house. I've taught and mentored lots of new players from many walks of life. They don't skip ahead and make wise guy references to someone's roi. It just doesn't pass the smell test. In fact, they would more likely ask what's the best way to win a million bucks on the daily double-AFTER they understood what a daily double IS.

[2low]

Not a chance. The game is pure sensory and mental overload. People unexposed to the sport spend the first day pouting because Zenyatta doesn't happen to be in when they visit Beulah. And the second day asking if the horses are muzzled like greyhounds to prevent biting each other. After that comes curiosity about program and form symbols and a struggle to understand that bettors don't wager against the house. I've taught and mentored lots of new players from many walks of life. They don't skip ahead and make wise guy references to someone's roi. It just doesn't pass the smell test. In fact, they would more likely ask what's the best way to win a million bucks on the daily double-AFTER they understood what a daily double IS.

I won't disagree with your generalizations above. Most people probably don't understand ROI going in, and possibly your forum poster wasn't what he advertised. All I'm saying is that for those of us who were already familiar with ROI from other experiences, it is hardly a wise guy reference. Relating ROI to horseracing for me was no different than relating horses to horseracing. It involves money going in and money coming back out. Auto-ROI calc. Not part of the learning curve at all.

Unfortunately, understanding ROI early doesn't help the number be positive:blush:

[GameTheory]

I won't disagree with your generalizations above. Most people probably don't understand ROI going in, and possibly your forum poster wasn't what he advertised. All I'm saying is that for those of us who were already familiar with ROI from other experiences, it is hardly a wise guy reference. Relating ROI to horseracing for me was no different than relating horses to horseracing. It involves money going in and money coming back out. Auto-ROI calc. Not part of the learning curve at all.

Unfortunately, understanding ROI early doesn't help the number be positive:blush:Agreed, some people (like me) got into the game because it was a financial market with low barriers to entry (i.e. you can bet $2) and had thoughts like, "I wonder what kind of ROI I can achieve with horse racing (or sports betting)?" before making their first bet or even knowing what a "past performance" was...

[2low]

Agreed, some people (like me) got into the game because it was a financial market with low barriers to entry (i.e. you can bet $2) and had thoughts like, "I wonder what kind of ROI I can achieve with horse racing (or sports betting)?" before making their first bet or even knowing what a "past performance" was...

I remember searching "ROI Horseracing" on the internet when I got started. Such a nerd. By the way, there is no good information out there. At least I never found it.

[mountainman]

I won't disagree with your generalizations above. Most people probably don't understand ROI going in, and possibly your forum poster wasn't what he advertised.
It was a she. And she sure wasn't.

[raybo]

Prefer the old basic method, flat bet profit, and will stick to it. Back then, when evaluating your results a theoretical $2 bet was assumed, regardless of the actual sums wagered. You could have been betting 2 dollars, or 20, or 200, 17, 33, 74, etc., or widely different amounts, it did not matter. If you made 50 bets during the month at an assumed $2 on each wager and the payoffs added up to $117, your selections had earned a 17% flat bet profit.

I must be missing something here. If your 50 bets were actually $2 bets and they paid $117 then you had a 17% profit (considering your wagers only, not considering your overhead; data, parking, entry fee, etc.). However, if the 50 bets cost you more than $117 then you had no profit, you lost money, flat bet or not.

[GameTheory]

I must be missing something here. If your 50 bets were actually $2 bets and they paid $117 then you had a 17% profit (considering your wagers only, not considering your overhead; data, parking, entry fee, etc.). However, if the 50 bets cost you more than $117 then you had no profit, you lost money, flat bet or not.He is also assuming (I assume) that the $117 is the sum of the $2 payoffs, not the actual payoffs.

So flat bet profit is your starting point, but if get home and figure out that your flat bet profit (theoretical) was 17% but you actually lost money (a common occurrence) then it shouldn't be your ending point. You've still got some stuff to figure out.

[raybo]

He is also assuming (I assume) that the $117 is the sum of the $2 payoffs, not the actual payoffs.

So flat bet profit is your starting point, but if get home and figure out that your flat bet profit (theoretical) was 17% but you actually lost money (a common occurrence) then it shouldn't be your ending point. You've still got some stuff to figure out.

I'm even more confused now. He stated that if he had 50 bets in a month. "Back then" $2 was the minimum bet. And, the only way $117 total payout equals 17% profit is if $100 was wagered, total. $100 / 50 bets = $2 per bet. There's no way he could have wagered more or less than $2 per bet.

I think he needs to post a better example of, "back then" flat bet profit.

[GameTheory]

I'm even more confused now. He stated that if he had 50 bets in a month. "Back then" $2 was the minimum bet. And, the only way $117 total payout equals 17% profit is if $100 was wagered, total. $100 / 50 bets = $2 per bet. There's no way he could have wagered more or less than $2 per bet.

I think he needs to post a better example of, "back then" flat bet profit.He is saying he evaluating his results by looking at all his 50 bets AS IF he had bet $2 on each one, so his THEORETICAL flat-bet profit is 17% based on the math as you've been doing it: $117 in returns (based on $2 bets), $100 in bets ($2 x 50) = +17% So that's the ROI he would have got if he had been flat betting. Nothing more. I feel you're looking for something more complicated here, but that's it.

In other words, even if he screwed it up and managed not to make money betting those selections (by betting more on losers than on winners) with actual bets of varying amounts, he knows his handicapping was good and he should have won.

[Nitro]

by GameTheory
He is also assuming (I assume) that the $117 is the sum of the $2 payoffs, not the actual payoffs.

So flat bet profit is your starting point, but if get home and figure out that your flat bet profit (theoretical) was 17% but you actually lost money (a common occurrence) then it shouldn't be your ending point. You've still got some stuff to figure out.

by Raybo
I'm even more confused now. He stated that if he had 50 bets in a month. "Back then" $2 was the minimum bet. And, the only way $117 total payout equals 17% profit is if $100 was wagered, total. $100 / 50 bets = $2 per bet. There's no way he could have wagered more or less than $2 per bet.

I think he needs to post a better example of, "back then" flat bet profit.And I think you fellas are reading WAY too much into BlueShoe’s comments! Either that or you’re just trying to keep this thread alive.

I’ll say one thing though - straight out, if you don’t understand that getting back $117 after betting $100 provides you with a “flat bet” profit of 17%, then you’d better go back to the drawing board. As BlueShoe pointed out his 50 bets were only an example but not the bottom line. He could have very well made a single bet of $100. What difference does the bet denomination make? Who cares how many bets were made? If this is where the so-called ROI concept is taking people, then its very similar to what the “New Math” did for kids years ago when they couldn’t count their change at a 7-11.

I have never met a player (in over 40 years) that ever said to me, “I got into this game because of the potential for a good ROI.” In the group of players I hang out with I would love to see the reaction if someone was asked how they made out after a day at the races by saying, “Oh Yeah! My ROI was great!”

As far as I’m concerned, the bottom line is Profit, not ROI. If you guys want to diddle with the petty anti costs of PP’s, or for gas driving to the track or OTB, or maybe even the electricity cost for operating your computer, then both your profits and ROI must be pretty slim. I can say the same thing about playing for rebates or worrying about take-outs. If your game is that tight and you’re battling for every dime, then maybe its time to consider some other form of entertainment!

Lots of Luck!

[BlueShoe]

Game Theory got it exactly right. The key phrases are theoretical, as if, and $2 bet. Nothing more than grammar school arithmatic. Sure, you could have that on paper 17% profit, and end up losing money, since horseplayers often have the distressing practice of having more money on their losers than they do on the winners. It could also go the other way, with larger wagers on your standouts that you felt very confidant about. In the old days, system sellers would often pitch their mail order customers by providing a "workout" that supposedly proved the success of the method they were pushing. It would show a long list of plays, winners and losers, often over a long period of time, and then a summary. The seller would say something like "Over a three month period the super duper system had 176 plays, and based on a $2 bet, returned blank blank, picked blank blank percent winners for a blah blah percent flat bet profit".

[raybo]

He is saying he evaluating his results by looking at all his 50 bets AS IF he had bet $2 on each one, so his THEORETICAL flat-bet profit is 17% based on the math as you've been doing it: $117 in returns (based on $2 bets), $100 in bets ($2 x 50) = +17% So that's the ROI he would have got if he had been flat betting. Nothing more. I feel you're looking for something more complicated here, but that's it.

In other words, even if he screwed it up and managed not to make money betting those selections (by betting more on losers than on winners) with actual bets of varying amounts, he knows his handicapping was good and he should have won.

Ahhhh, ok I finally get it. :bang: