STOP, before you comment.

[raybo]

I believe the only way to turn a losing ROI based on a fixed handicapping system is a better wagering system, where you require a higher payout before wagering, ie: exotics.

[098poi]

Originally Posted by BMeadow

"Can there exist a money management formula/method that can convert a negative edge to a positive roi? Something like a flat bet loss of 16% to a positive ROI of 20%?"

Let's try for something much easier--converting a 1.4% loss (the pass line in craps) to a 1% profit. While this can easily be done in the short run with a mild progression, many short runs do not equal one long run. Because at some point, that terrible losing streak hits.

While casinos around the world routinely bar players for card counting, shuffle tracking, ace steering, hole carding (blackjack), or for tying up machines when a video poker machine's jackpot moves into positive territory (video poker), or for being just a little too sharp (sports betting), I have never HEARD of a single place which bars players for using betting systems.

In a short run (say, 1000 horse bets), any result is possible because the sequence of wins and losses, and the prices, vary. You might win more (or lose less) by flat betting, or by Kelly, or by using any system you can invent. In the long run (one billion bets), your result is exactly the same as your single-bet expectation (unless you can figure out some way to bet the maximum on your winners and the minimum on your losers). So if you bet the pass line one billion times, you will lose just about 1.4%. No matter what system you might dream up.

Sad, but true.

Your mention of video poker reminded me of something. Be advised I am writing this from memory so don't anyone challenge the specifics because this is all I know. When I lived in S. Cal about 9 or 10 years ago I had a friend who flew to Florida and was involved with a group that would stalk (my words) progressive slot machines. When the payoff was above a certain amount they would play every slot associated with the progression, until someone hit. My friend was paid an hourly wage and a tiny bonus if his machine hit. I know this to be true because he was there (in Florida) just to do this. He still had his primary residence in Cal. The whole thing was funded and monitored by the group that ran the thing. He never used his own money at all. Anyway he got his younger brother involved and his brother hit one time. His brother did not turn over all the money (somehow telling the casinos he wanted 2 checks or saying he lost a check, something like that) and kept 15 or 20 thousand. Well my friend got barred from any continued participation and his brother ran scared. I don't think anything physical happened, because my friend said these guys didn't seem like typical crime tough guys from the movies. He was really pissed and if anyone was going to kill his brother, it was him. Since then I have read a couple of books about the MIT blackjack teams and maybe it was those guys. If they can figure when the payoff exceeds the loss probability and trust the math they may have been on to something. My friend said the casinos might have been aware but didn't care because they got their due from the slots already and the players were not doing anything illegal. I have lost touch with my friend but wish him well.

[Turntime]

A bit off topic, but let me respond to 098poi. Video Poker teams did flourish at one time, but they operated with a positive expectation. Essentially, they would wait for the jackpot to hit a certain amount and then move in, locking up all the available seats (when possible) until the jackpot was hit. There were also other slot machines that had a progressive meter (Bingo, X Factor, Cherry Pie, Crown Jewel and others) and were beatable if you only played them when they reached a certain progressive level (the math involved was not too difficult).

Those were interesting times. Alas, the Casinos finally figured out (quite correctly) that that video poker teams and slots hustlers were no good for business because the money was walking out the door, instead of remaining in the hands of tourists who were more likely to send it back. Today the progressive slots have gone the way of the dinosaur, and beatable video poker progressives are extremely rare. Why must the accountants always ruin a good thing?

I was never part of the progressive teams since playing the horses was my main focus, but if I happened to be walking by a good slot machine....well, who can resist a positive expectation?

[Secretariat]

Betting into a negative result selection process (like playing just favorites) is very ill advised as we all know, but Lou Holloway advised some ways to attempt to grind it out

Dave mentions the Oscar system and the D'Alembert. Personally, if I am at a casino I use a modified Oscar betting strategy with betting limits for a session, a stop loss, a slump breaker, and a plateau style of multiple sub-banks and play to follow the current streak. It's done well, but one can bored very fast in this kind of mechanistic play.

However, let's say you have a series of results like this.

1st 30 bets -6 result
2nd 30 bets - 8 results
3rd 30 bets - +10 results.

One can turn the negative in the first two session into a positive 3rd session even though the overall results are negative. If one is using say an oscar system, one could possibly turn a postive result in all three depending on the order of wins and losses.

THe above said I still think if you have a negative advantage it is best to work on ones handicapping until you can find postive situations to bet into.

[ryesteve]

Originally Posted by Secretariat

If one is using say an oscar system, one could possibly turn a postive result in all three depending on the order of wins and losses.

Depending on the sequence, isn't it also possible to make the sessions even more negative than they otherwise would have been?

[Red Knave]

Originally Posted by speculus

Just because, technically, handicapping comes before money management DOES NOT MEAN it is MORE important.

Just a personal observation, but Mr. Schmidt has written and lived this philosophy for a very long time. I really don't think you can tell him anythng about money management.

Originally Posted by Dick Schmidt
There is always free cheese in a mouse trap.
This remark I think is in bad taste. I will be happy if you retract it.

Another observation is that Dick always ends his posts with a very clever tag line. This is just one of many and, I'm willing to wager, was not intended to be a personal attack.

[maxwell]

Dick S,

Steal money from the roulette table - I love it!

That's why Albert could see "around the bend in the river".

I saw a show recently on A&E ( ? ) about an economics formula that a couple of super eggheads figured out. It worked great until something weird happened to the markets, and Russia decided to cancel the billions they owed worldwide - I believe these guys were into the trillions, and the U.S. treasury and the top financial companies had to step in to save the world
market - amazing story!

I have a simple formula that works for sure: 8 x .15 - .85 = $

If you get average odds of 8/1 making win bets and you can win 15% of your bets, you won't lose. It's far from easy but it is doable.

[singunner]

This is why I find horse racing interesting. It's populated by so many people who take a largely objective philosophy and practice a wholly subjective reality.

When you say "turn a negative ROI positive", the smart people here are assuming you mean that the average for your handicapping strategy falls below a positive return and that you will be betting frequently enough as to eliminate any standard deviation causing anomalous positive results. If you use a recursive betting strategy on an ROI that does not surpass 1, there is no possible way to achieve widely repeatable success within the bounds of the mathematical laws of the universe I (and assumedly you) reside in. Now, if you believe Everett's many-worlds theory, there is the universe where I am wrong by chance, but there is enough balance of universes where I am right that I feel confident making these statements.

Sorry to collapse your waveform.



PS- If you would like to PROVE me wrong, I will happily go insane.

[Dick Schmidt]

"Are you aware that you are attempting to portray me as a scheming man whose hidden agenda is marketing?"

Why yes, I am completely aware of that. So far, you continue to operate as though that is your agenda. Maybe you are such a deluded egotist that you think that you have found the pot of gold at the end of the rainbow where so many other serious investigators like Kelly or Mitchell have failed, and need no one's help in analyzing how it works, but that's not what it looks like. If it looks like a clever marketing scheme, quacks like a clever marketing scheme and walks like a clever marketing scheme, then it is a . . .

Dick

Glad you like my tag lines. I got a million of them:

I would like to take you seriously, but that would be an affront to your intelligence.


Genius does what it must, talent does what it can, and you had best do what you're told.

100,000,000 sperm and you were the fastest?

If everything seems to go right, check your zipper.

Freud's 23rd law: ideas endure and prosper in inverse proportion to their soundness and validity.

If the shoe fits, buy the other one, too.

[speculus]

Originally Posted by Dick Schmidt

Maybe you are such a deluded egotist that you think............................. that looks like a clever marketing scheme, quacks like a clever marketing scheme and walks like a clever marketing scheme, then it is a . . .
Dick

I request you not to abuse your freedom of expression.
Your rantings betray you as a frustrated man who takes another man's intelligence as a personal affront.
Have mercy at least on your friends, they are trying to project you as a nice man. You are not coming across as one by your writings at least on this thread.
May Jesus calm your frayed nerves! Amen.

[rrbauer]

I haven't read all of the posts so maybe this has already been advanced:

A negative-sum game is simply that. You may encounter a winning streak along the way that will defer the inevitible, but, unless you quit at that point, then the game will untimately deliver your destiny. Because of pari-mutuel takeout, horse-race betting begins as a negative-sum game. But, because the game is more negative to some than to others, the payout odds compensate for the intrinsic nature of the game and deliver profits to some players. Enough profits to some and a positive ROI emerges. Enough losses to others and a negative ROI emerges, with the latter being the more prevalent condition.

Record keeping is important (IMO) but betting behavior ultimately decides which side of the ROI coin comes up. If you consistently place your bets on the losing side then your problem is not money management. However, rebates have given those with only slightly negative ROI experience a chance to rollover to the positive ROI side by returning some of their capital.

If there were a money-management tool that would convert a significantly negative ROI to a significantly positive ROI you wouldn't be able to make them fast enough!

[speculus]

Originally Posted by ryesteve

Depending on the sequence, isn't it also possible to make the sessions even more negative than they otherwise would have been?

What many here don't seem to agree to is that an ideal money management system MUST give out the same figure for "state of bankroll" at any point even if you shuffle the earlier bets (wins and losses) in million different ways. The reason I am investigating the said formula further is that, like Flat betting, it obeys this condition perfectly.

[speculus]

Originally Posted by aaron

The only way you could show a profit with a negative roi based on a flat amount would be to have larger bets on your higher price horses and lower bets on the short priced horses.If you are an good enough handicapper to accomplish this,then you would probably show a positive roi anyway.

You are right, Aaron.

Now the point is: A formula which (in some way) takes into account the odds of the wager and THEN decides the bet size can hope to accomplish this. The Kelly practitioners take this route, but since Kelly demands that the bettor must be able EVERY TIME to accurately predict the real probability, using Kelly with one wrong estimate can put you on the road to a sure ruin. People have tried frational kelly, introduced safety factors etc only to discover that it does not work to the expected level.

I am investigating this formula because odds offered is one of the factors it takes into account and as I said earlier it also satisfies THE definition of ideal money management plan that whichever way the bets are shuffled the result remains the same.

[jfdinneen]

Speculus,


As you know, when summarizing data distributions both a measure of central tendency (e.g., mean) and a measure of dispersion (e.g., standard deviation) are the minimum requirements.

In assessing handicapping performance, there is too much emphasis on expectation (i.e. edge) and too little on volatility (i.e. luck). However, very few handicappers make enough wagers in their whole lifetimes (e.g., > 100,000) for edge to outweigh volatility (or risk of ruin - loss of bankroll) as meaningful metrics of overall performance. As an extreme example, a punter on Betfair recently matched GBP 40 @ 1000/1 in-play on eventual winner, Tioga Gold. at Southwell, 13:20, Jan 02, 2007 - collecting GBP 40,000 in a single race!

Therefore, I would ask that when evaluating money management plans, all handicappers consider risk of ruin, volatility, and expectation (in that order) as critical metrics!

Best wishes,

John

[spilparc]

I always thought Bob Stupak, the former owner of Vegas World, was the first one to come up with the idea of 100 x odds on craps. [The following article says I don’t have it quite right. http://www.casinoplayer.com/archive/...100x_odds.html]

But for a while there you could get 100 x odds at Vegas World and the Horseshoe. (And other places as well.)

Receiving 100 x odds on the pass line lowers the house expectation to 0.021 percent.

“Mathematically, with 100-times odds, the casino's edge can be reduced to a piddling 0.02 percent; that's an expected loss of only 2 cents per one hundred dollars of action on the pass line and odds.”

A friend of mine who knew Stupak fairly well, quoted him as saying, “just give me a small fraction of a percent return, and I’ll eventually grind them out of all their money."

Steve