Practical Limit to Handicapping Success.

[thoroughbred]

Some time ago, I wrote a program to analyze what kind of monetary success handicappers with various skill levels can achieve.

The results were very interesting.

I need to define things carefully, because there are so many factors to handicapping, things can easily be misunderstood.

First of all I limited the analysis to win bets only, no place, show or exotic bets.

Second, no races are skipped.

I was able, via an Internet Newsgroup, to solicit statistics about the distribution of winning bet payoffs. Fortunately, there were some handicappers who had accumulated data over thousands of races and were gracious enough to share the key data with me.

With these data, I was able to program the statistics of winning payoffs. So when I ran this part of the program, when there was a win, the payoff would be taken randomly from the payoff stqtistics, i.e. they matched the statistics that were derived from those many races.

The key input to the program was the level of a handicappers skill, e.g., 10%, 20%, 30%, or any other percentage. To explain this clearly, 20% would represent a handicapper who, over the long haul, averaged winning 2 out of 10 times.

A random number generator would ensure that the wins in the program represented the specified handicapping skill percentage.

Then I had to choose a method of betting. Which one I chose didn't matter because, there is no betting method, i.e., money management scheme that can ever change the underlying probabilities over the long haul. To be clear about this, think of tossing a perfect coin and you bet heads or tails. The probability of being right is 50%. No matter what money management scheme you dream up, after a large number of bets, you will have broken even.

So, even though it doesn't matter, I had to choose a betting method to run the program. I chose to start with a fixed kitty, and always bet 10% of the active bankroll.

Here are some of the results.

If your win rate is 10% you will go broke quickly.

If your win rate is 20%, you will still go broke but a little more slowly.

At about 27 to about 30% you will tend to break even.

At approximately 31% to 33% you, will start to make a long term profit.

At about 34, 35, and 36%, you will make good money over the long haul.

If you can achieve 40%, you will run ino the problem of making so much money that your bets will affect the odds adversely.

Practically speaking then, we will probably never meet anyone who can win 4 out of 10 win bet races, consistently, over the long haul of many races.

I did this analysis many years ago, and the details of the program are long since gone. But I have never forgotten the results; they continue to cause me to be humble in my expectations for large monetary success.

[Moe Mony]

If you truly believe that, then start betting Jai Lai or something else, cause your doomed at this game, if, what you stated is your real belief.

[PaceAdvantage]

Moe,

Please explain.....



==PA

[Moe Mony]

Thoroughbred stated "...we will probably never meet anyone who can win 4 out of 10 win bet races, consistently, over the long haul of many races."

Obviously, T-Bred has never met anyone who can do this. But a fellow player I knew pointed out a guy to me who bet selectively, and cashed a very large share of his bets on a daily basis years ago. The guy sat by himself all of the time, barely talked to us when we attempted to converse with him, but we observed him doing the above over a three year period.

It's the only time in my 36 years of playing that I have witnessed this. It occurred in the Hilton Superbook.

PA, my point is this, just because someone does not experience a player who fits T-Bred's observations, does not necessarily mean they do not exist.

Our beliefs are based on individual experience that set off the following chain of behavior...beliefs effect our attitude...attitude affects our thoughts & feelings...thoughts and feelings affect our actions....and actions beget consequences.

Beliefs are the software that control this chain of behavior.

Limiting beliefs result in unwanted consequences that perpetuate furthur ingrained limiting beliefs...but, the opposite also holds true, in that expanding beliefs result in wanted consequences that furthur perpetuate ingrained expanding beliefs.

And, beliefs are an individual CHOICE.

Quite possibly, the title of Jimi Hendrix's bestselling album in the late '60's asked the essential question..."Are You Experienced?".

But those who truly are, usually don't tell!!!

[PaceGuy]

Thoroughbred,

You are ignoring a couple of very important factors that need to be considered in addition to a player's win percentage. Those factors are the player's average win mutuel payoff and the individual player's own psychological makeup.

I have seen and played a handful of methods with a low win rate (10-12 percent) that have a nice average win mutuel (say $22 to $25.) A player who can get 12 percent wins with a $22 average win mutuel, who takes a disciplined approach, and bets, not 10%, but 2 to 3 percent of his bankroll to win each time he has a play, stands a very good chance of eventually finding himself having to limit the size of his own bets so as not to destroy the odds because he is overloading the win pool with his own money.

My own testing and experience leads me to believe that any combination of win rate along with a high enough average win mutuel will yield a positive roi.
Eventually the disciplined player will hit the wall that you've discussed (overloading the pool.)

But before this actually happens the player usually finds himself hitting a wall of another kind.

Me? Every time my own bankroll grows so large that the bet that I am compelled to make starts to exceed my own built in 'comfort level,' I find myself backing off the size of my bet. I have tracked my own performance in this one area for several years. It has happened to me over and over again. I have grown many a tiny beginning bankroll ($50-$100) to over several thousand over a period of many months (sometimes years.) But the result is always the same. Eventually, I find that my own psyche prevents me from risking several hundred dollars on a single horse to win. At that point I throw most of the money from my bankroll into my bank account and start the whole process all over again.

Sorry for the length of the rant but once I got started I couldn't stop...

[GR1@HTR]

Bet 10% of Bank and you WILL GO BROKE...Regardless of win%...

[hurrikane]

Agreed GR1 there is no way you can sustain any kind of bankroll betting 10%. Even a 40% wins you are bound to kill your bankroll

[Tom]

Not too many people who consistantly hit 40-50-60% of their win bets at 3.00+ ROI evert talk about it. In fact, I am the only one that even posts on boards like this one.
~G~
Tom

[thoroughbred]

In reading some of the responses to my post, I see I have to emphaize some things that were overlooked by some of you.

Note: I reported that the analysis required the BETTING OF EVERY RACE, not selective ones. If you have the ability, and the discipline, to only bet selectively, you can do better.

Also, since the statistics of actal mutual payoffs were included in the computer program, the result DOESN"T include the limiting the payoffs to selective high payoffs.

It is not a question of what I BELIEVE, I just reported on the results of an analysis made under the ASSUMPTIONS that I listed using real data from a history of races. To disprove my result wouldn't it be proper to do a similar analysis, or even a different analysis approach to see what results are obtained?

Now I will ask for help from someone who might know.
After I did the analysis, I was told that I needn't have bothered, because one of the well known experts in the field, had included in his book, similar results. Does anyone know who that might be, so I can get the book and quote the result to support my own?

Here is an intersting thing for you to try. Follow the "expert" picks in the DRF, the L.A. Times, or whatever, and keep track of their WIN choices for a few months. You will be surprised at what a low percentage of WIN bets these experts achieve, and how low their ROI's are. Their difficulty, of course, is they are forced to choose a winner for every race, they usually cannot, in their columns, choose races selectively.

As for the suggestion that I switch to J"ai A'lai, no thanks, I enjoy, as I am sure all of you do, handicapping very much and am happy with the results I achieve. I do not bet every race, I bet selectively, very often skipping races with first time starters, foreign shippers, mixed dirt and turf horses, etc.

[thoroughbred]

Originally posted by GR1
Bet 10% of Bank and you WILL GO BROKE...Regardless of win%...

I wonder if GR1 would expand on this interesting statement. Perhaps some important thought was left out of his post.

If you take the statement as is, i.e., "REGARDLESS of win%" then we have to suspect that something was left out. Taking the statement to the extreme, let's choose 100%. Why would anyone go broke winning at 100% using a 10% of bankroll betting method?

And, if you, clearly make money when you never lose at 100%, you might have reason to believe that you would also make money at 95%, 90%, 80%, etc. At some lower percentage the win expectation, obviously, will change to a losing one. Under the assumptions made in my original post, this switch from LONG TERM profit to LONG TERM loss occurs in the 30% win region.

[so.cal.fan]

Betting 10% of your PROFITS when you are going good is a good way to get up to your goal bet size. When you are going good, take advantage of it.
When you are losing have a minimum flat bet, that is about 2% of your bankroll you have set aside for wagering.
You become a small bettor when losing, and a big bettor when winning. Makes sense to me.

[Rick Ransom]

thoroughbred,

It appears that you assumed that the distribution of win payoffs is the same regardless of your win %. I can assure you that this is not the case. It's really harder than you think to win at a high % and easier than you think to win at a low % because the win payoffs tend to get smaller at higher win % and larger at lower win %.

That doesn't mean that you can't have a high ROI at high win % though. You just have to be very selective. In fact I've known a couple of people who did just that. If you're looking for action in every race, you'll have to go down to about 15% wins in order to show a profit.
My personal preference is about the 20-22% range where you can get a lot of overlays without suffering really long losing streaks.