View Poll Results: How do you calculate ROI
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ROI = (revenue – cost) / (cost)
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41 |
65.08% |
ROI = (revenue) / (cost)
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18 |
28.57% |
Alternate method
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4 |
6.35% |
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01-22-2016, 10:55 PM
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#16
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Authorized Advertiser
Join Date: Dec 2014
Location: Oakland, Ca
Posts: 7,953
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Quote:
Originally Posted by BCOURTNEY
I was having what I thought was a pretty strange discussion with someone today. I then realized they live in an alternate universe from mine.
This is the right formula: ROI = (revenue – cost) / (cost)
This is the wrong formula: ROI = (revenue) / (cost)
No, I really don't think this is subjective.
e.g. a 15/1 odds horse pays $32.00.
The ROI for the investment is = ((32-2)/2) = 1500% (15:1)
The ROI for the investment is not (32/2) = 1600% (16:1)
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I'll bet you use that to pick up chicks at Mensa conventions.
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01-22-2016, 11:35 PM
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#17
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Registered User
Join Date: Jul 2013
Location: Seattle
Posts: 3,943
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First equation is "Profit on Investment". Second equation is "Return on Investment". That's the way I've always termed it.
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01-23-2016, 12:22 AM
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#18
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Registered User
Join Date: May 2008
Posts: 686
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Quote:
Originally Posted by NorCalGreg
I'll bet you use that to pick up chicks at Mensa conventions.
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I can't disclose my methods it might lower my ROI
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01-23-2016, 12:41 AM
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#19
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Registered User
Join Date: Jan 2006
Posts: 28,390
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If your winning percentage at the track is 29%, and your average mutuel price is $9.20...what's your ROI?
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Live to play another day.
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01-23-2016, 03:02 AM
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#20
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what an easy game.
Join Date: Dec 2002
Posts: 43,096
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it makes a big difference.
http://www.paceadvantage.com/forum/s...=1#post1933532
Quote:
Originally Posted by formula_2002
results after 34 races
11 wins in the straight win pool returned $23.10 .68 roi
11 win based on the exacta bets returned $30.40 .89 roi
the exacta return exceeded the win pool return in 9 0f the 11 races.
if, in the long term the win pool bets return a normal .83 roi, then the exacta pool roi could be in the area of 1.09 roi
.83/.68 x .89 = 1.09
this needs to be corrected to return-wins /cost,
(23.1-11)/34 = .355 roi
(30.4-11)/34 = .57 roi
(.83/.355) x .57= 1.33 roi
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Last edited by formula_2002; 01-23-2016 at 03:04 AM.
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01-23-2016, 03:55 AM
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#21
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Registered User
Join Date: Mar 2007
Posts: 1,964
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Quote:
Originally Posted by thaskalos
If your winning percentage at the track is 29%, and your average mutuel price is $9.20...what's your ROI?
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(.29*4.60(which is your return on every $1 bet))/1 equal 1.334 Thus you have a 33.4% roi(which basically states for every dollar you bet you made 33.4 cents).
or you can use (.29*9.20)/2 and of course you get the same answer.
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01-23-2016, 04:45 AM
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#22
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Registered User
Join Date: May 2008
Posts: 686
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Quote:
Originally Posted by thaskalos
If your winning percentage at the track is 29%, and your average mutuel price is $9.20...what's your ROI?
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$2 win ticket (assumption)
Formula .=>
((win rate*revenue)-cost))/(cost) = ((0.29*9.20)-2))/(2) = 0.334 = +33.4%
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01-23-2016, 05:58 AM
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#23
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Authorized Advertiser
Join Date: Dec 2014
Location: Oakland, Ca
Posts: 7,953
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Quote:
Originally Posted by BCOURTNEY
I can't disclose my methods it might lower my ROI
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Good comeback, Courtney
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01-23-2016, 02:10 PM
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#24
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EXCEL with SUPERFECTAS
Join Date: Mar 2004
Posts: 10,206
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ROI means "Return On Investment". If you bet $1000 then that is your "investment". If you are returned $1200, that is your "return". Your profit is $200 ($1200 -$1000 = $200)
ROI formula is Return/Investment ($1200/$1000 = 1.20 or a 20% profit on every dollar bet) (a 1.00 ROI is break even, no profit and no loss).
How much simpler could it be?
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01-23-2016, 02:40 PM
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#25
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Registered User
Join Date: Jun 2011
Posts: 586
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Quote:
Originally Posted by raybo
ROI means "Return On Investment". If you bet $1000 then that is your "investment". If you are returned $1200, that is your "return". Your profit is $200 ($1200 -$1000 = $200)
ROI formula is Return/Investment ($1200/$1000 = 1.20 or a 20% profit on every dollar bet) (a 1.00 ROI is break even, no profit and no loss).
How much simpler could it be?
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That pretty much sums it up.
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01-23-2016, 03:36 PM
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#26
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Registered User
Join Date: Jan 2004
Location: The Big Apple
Posts: 4,252
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Quote:
Originally Posted by raybo
ROI means "Return On Investment". If you bet $1000 then that is your "investment". If you are returned $1200, that is your "return". Your profit is $200 ($1200 -$1000 = $200)
ROI formula is Return/Investment ($1200/$1000 = 1.20 or a 20% profit on every dollar bet) (a 1.00 ROI is break even, no profit and no loss).
How much simpler could it be?
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Raybo, your formula is correct, but the word "total" should be put in front of "return" to read "total return" and in front of investment to read "total investment".
I realize that you implied that, but there seems to be a difficulty by some in understanding this simple concept.
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Independent thinking, emotional stability, and a keen understanding of both human and institutional behavior are vital to long-term investment success – My hero, Warren Edward Buffett
"Science is correct; even if you don't believe it" - Neil deGrasse Tyson
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01-23-2016, 03:59 PM
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#27
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EXCEL with SUPERFECTAS
Join Date: Mar 2004
Posts: 10,206
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Quote:
Originally Posted by Cratos
Raybo, your formula is correct, but the word "total" should be put in front of "return" to read "total return" and in front of investment to read "total investment".
I realize that you implied that, but there seems to be a difficulty by some in understanding this simple concept.
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Well, when you bet $40 on a horse to win, isn't that your "total investment" in that particular wager? And for that wager, if you are returned $80, isn't that your "total return" for that wager? There is no need to add "total" to the formula, the investment amount is the investment amount, and the return amount is the return amount. Add all your individual investment amounts together, and add all your individual return amounts together, and then divide the return amounts by the investment amounts, those are your "totals".
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01-23-2016, 04:17 PM
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#28
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EXCEL with SUPERFECTAS
Join Date: Mar 2004
Posts: 10,206
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If one is talking about return on "initial" investment, then you're talking about something totally different. You would be talking about "growth" or "gain", of initial bankroll, not ROI.
I had that discussion way back in 2004, I think, after I turned a $400 bankroll into over a $7700 bankroll in 2 months time, without depositing any further amounts into the bankroll.
Last edited by raybo; 01-23-2016 at 04:20 PM.
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01-23-2016, 04:39 PM
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#29
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Registered User
Join Date: Jan 2004
Location: The Big Apple
Posts: 4,252
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Quote:
Originally Posted by raybo
Well, when you bet $40 on a horse to win, isn't that your "total investment" in that particular wager? And for that wager, if you are returned $80, isn't that your "total return" for that wager? There is no need to add "total" to the formula, the investment amount is the investment amount, and the return amount is the return amount. Add all your individual investment amounts together, and add all your individual return amounts together, and then divide the return amounts by the investment amounts, those are your "totals".
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My suggestion wasn't as a correction, but to state common usage.
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Independent thinking, emotional stability, and a keen understanding of both human and institutional behavior are vital to long-term investment success – My hero, Warren Edward Buffett
"Science is correct; even if you don't believe it" - Neil deGrasse Tyson
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01-23-2016, 06:17 PM
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#30
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The Voice of Reason!
Join Date: Mar 2001
Location: Canandaigua, New york
Posts: 112,468
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Actually, common use is to say return and investment. No one say TROTI, they say ROI.
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