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Old 05-27-2010, 04:33 PM   #1
Ted Craven
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** 5th Anniversary Follow Up Goodies **

To further celebrate the upcoming 5th Anniversary of life here at Pace and Cap, here are some fine articles taken from the 5th Anniversary Edition of The Follow Up, Doc Sartin's Journal of the Sartin Methodology (Issue 25).

In this article by Dick Schmidt entitled The Beginners Column, he discusses pitfalls and practicalities of wagering approaches.


The Beginners Column
A Step-by-Step Walk Through
The Sartin Methodology (Part II)
Your Guide: Dick Schmidt
Last time, I ended with the line "Congratulations, you're handicapping." Indeed, this is where most handicapping books and manuals end. They carefully show you how to use whatever method the author is advocating, and then they turn you loose. The underlying, unstated assumption is that in order to win as a handicapper, all that is necessary is the ability to predict the outcome of a significant percentage of races in advance.

There is no denying that this is a vital skill, and that without this ability our future is definitely limited as handicappers, but there is more to genuine success at the races than picking horses. After you pick them, you need to bet them.

Let me ask you, does this sound familiar? You handicap a race and decide one of two horses is going to win. You bet them both to win, splitting your bet 60-40 according to the odds. Then you hook them together in an exacta box, then use them on top of your third choice (who is actually a pretty close third) and also a shipper you had trouble getting a line on, a horse taking a big class drop and the high APV horse. One of your horses wins, and pays a generous $10.20. However, a real outsider ran second, a horse beaten by 23 lengths last time out, and you lose the exacta. Oh, well, you won $61.20 and only bet a total Of $48 in the race. Chalk up another winner!

Let's look at just what was accomplished. Our handicapper selected a horse that went on to win, and was paid a tad over 4 to 1 for his efforts. He made a $20 win bet (12 on our winner, 8 on the horse that wound up third) that returns a profit of $41.20 and shows a return on investment of over 200%. That he also flushed $28 down the drain chasing the exacta doesn't seem too bad. We can't win them all, and he did come close. After all, he did show an overall profit of 27.5%.

The problem arises as the day goes on. In the next two races, let's say he does the same thing. Unlikely, but this is an example. Then, as must happen eventually to all of us, he loses one. What he has done is win 3 of 4 races with an average mutuel of $10.20 and lost $8.40. 75% at $10.20 doesn't sound like losing, but we managed it.

Another scenario. You handicap a race, and just can't separate three horses. So you say, what the heck, I'll just box them in the exacta. Then you decide to use a couple of other horses underneath who show just a little something. Then you put that big APV horse on top of your three, just because of all that back class. Then you take an extra combination
the two lowest paying of your three horses. Got this race covered!

Sure enough, you win. You invested a total of $80 in 16 combinations and take down a nice $93 exacta two and a half times. You are a hero! A champ. Everyone sitting around you eyes with envy the ticket you so gaily wave for inspection. No one, least of all you, notices that you have converted a 45 to 1 exacta into a race paying less than 2 to 1. That's
right. You bet $80 to win $232.50, showing a profit of $152.50. That's 1.9 to one.

Again, you repeat the process three more times, only this time (we're betting exactas, remember) we only hit one more of them. So you go home with a 50% exacta proficiency at $93 and don't really notice that you lost another $15.

What's going on here? 75% win at $10, 50% exactas at $90 and we're losing? This is not how things are supposed to be in a world that is right and proper. I could give other examples, but the lesson would be the same in each: trying to win races when you don't have the winner as one of your top two betting choices. Let's use the above scenarios and bet a bit more rationally.

First off, we win 3 of 4 at $10.20, betting $20 split 60-40 to win each time. We also play a $5 exacta box on our top two, and lose all four. This time, we bet $120 to win $183.60, a $63.60 profit and a R.O.I of over 50%. We still have the potential of a big time hit if we're right about one of our exactas, and show a solid profit doing it. Much more betta.

With the 4 exacta races, we key our top three horses, betting a $5 box. Because we leave out so many horses, we only hit one of four exactas, but again it pays $93 and we have it 2.5 times. Now we have invested $120 to win $232.50, a profit of $112.50 for an R.0.I. of over 90%. We won fewer races (25% instead of 50%) but we enjoyed it a lot more at the end of the day. Again we go home with a very solid profit.

There is such a strong temptation to "cover yourself", to "insure" your bet, to "protect yourself" if your analysis is almost, but not quite, correct. It is soooo tempting to toss just one more horse into that exacta, or bet that third choice when he is close. We even have a name for this: The Pizzolla Syndrome. I used to tell people that given time,
Michael could make any exacta pay even money. In the last year, Michael has changed his betting patterns; he's now winning fewer races and more money. I guess we'll have to find a new name for it, but the problem remains.

Elsewhere in this issue, I present an article on how the fear of losing can strangle us. What we must do is simply accept that losing is a part of racing, that all handicappers lose sometimes, and then plan a strategy that will produce profits for us over a given number of races.

The first thing we must stop doing is trying to win races when we aren't correct in our handicapping. If your third choice wins, or an outsider places, don't start trying to cover everything that moves. When you are wrong about a race, you are supposed to lose money, not sneak around and somehow break even. You may save yourself some pain, but you so dilute your wins that even one loss can wipe all you have accomplished in several races. Accept your loss like a woman and move on. I say woman because women tend to be much better at this than most men, not being so hung up on winning. Maybe that's why they make such good handicappers.

In the past, I have presented a very inflexible money management plan and recommended it to all and sundry for their consideration. I'm going to do it again in just a few seconds, but first I want to touch on the philpsophy behind it. At the heart of this plan is the assumption that you are showing a flat bet profit betting on paper. This means that when you assume a $2.00 bet on each horse ($4 per race), you have an average return per race of $4.01 or higher. Much higher, I would hope. In fact, you should show at least a 15% return over 50 races or so before you start with real money. You'll find real betting with real money is much harder than playing on paper, and if you are struggling on paper, you will be a disaster at the track. Leave yourself a comfortable margin of error before you move on to live action.

If you follow this money management plan to the letter, and you are showing that all-important positive expectation by winning more than you are betting, you will make money. As time goes by, and you begin betting more, you will make a lot of money. And that's what we all signed on for, wasn't it? So here it is:

continued next post...

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Old 05-27-2010, 04:40 PM   #2
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The Beginner's Column continued - Part 2 of 3

The Beginner's Column continued - Part 2 of 3

First and foremost, you must absolutely, positively WRITE DOWN EVERY BET YOU MAKE!!! Every damn bet, even the action bets for $2, or the Pick-6 ticket you split with two buddies when there is a big carryover. If you are not willing to do this, all attempts at money management or professional level play are doomed to failure before you even begin, only if you are willing to make this commitment, should you attempt to play the races on anything but a recreational level.

STEP 1 - Divide your bank into 5 segments of $200 each. Don't worry if you don't have $1,000 to start with, $800 can be pretend. Or in your savings account. Your spouse never need know that it just became a part of your bankroll. From now on, all profits and losses will be expressed in terms of segments of bank. (A quick tip of the hat to Dave Schwartz of Thorobrain for this idea). (Ed. Note: Known in modern times as 'Horse Market Investing, HMI - by Dave Schwartz'. 'Segments of bank' = 'session play')

STEP 2 - Start by betting 5% of bank (5% of $200 is 10 bucks a race) to win only. Split each bet by either dutching to the true odds, or use a 60-40 split. 60-40 seems to work well for most people, and it is a lot less work.

You have no choices to make. Every bet is exactly 5% of bank, split between two horses to and bet win. You may not make any other bets, nor can you bet less. If you are uncomfortable with the bet, you are allowed to pass the race, but not vary the bet in any fashion. Keep it up until you have doubled your bank.

STEP 3 - Take a $100 profit and put it in the bank. You now have $900 in there. Start betting 7.5% of your by now $300 bankroll (that's $22.50 a race. Round down to $22). Continue betting to win only, splitting your bet 60-40. Play at this level until you again double your bank.

STEP 4 - Put another $200 in the old bank and start playing at 10% of your now $400 bankroll. At this point, I used to say: Continue This Forever. Instead, let's look at using those segments.

STEP 5 - Whenever you attain the goal you set for yourself, or you start to sweat when you make your bets, stop and take stock. I use the goal of tripling my in-action bankroll. After I triple a segment of my betting bankroll, I then (in theory only) put it all into the bank and draw out 1/5th, using it as my new betting bankroll. I then play until I triple this.

Example: I start with $1,000. $800 stays in the bank, and I put $200 in action. When I run that $200 up to $600 (no matter how long it takes - you can do it in 3 races or 300), I deposit it into the bank, giving me a total of $1400. My new bankroll is $280, and I will play until it reaches $840. Now I have a grand total of $1,940 and I start a new bankroll of $392.

The reason for all this nonsense with segments is that once in a while, you may lose your entire in-action bankroll. So you say shucks, draw out a second segment and continue as before. Most handicappers who show a at least a 20% R.0.I. will win at least 80% of their segments. This allows for rapid expansion of the bank, yet still provides a much needed psychological cushion. I truly believe that it is almost impossible to go broke and lose all 5 segments juggling your funds in this manner, always assuming you continue to show a flat bet profit. If you are not showing a profit, no money management scheme on earth can save you.

STEP 6 - You reach the point where even the starting bet for a segment is too large for comfort, or is making your track's toteboard go tilt. Drop your bet down to the maximum you feel you can handle, and keep it there. In other words, flat bet. Once you have reached the top, be it self imposed or pari-mutuely imposed, your best strategy is to bet the most money you can in every race you play, so long as you continue to show a positive return.

There are several safeguards built into this plan. If you are showing even a minimal profit, it is almost impossible to go broke betting 5% split between two horses. It may take months to double that first bankroll, but what's the hurry? You're winning; many of you for the first time. Once we start betting 10%, unless we are very proficient indeed, there is the real possibility that we might lose an entire in-action bankroll once a year or so. The segments take care of that, and also stop the growth of the bank from getting out of hand should you get hot.

One of the, real problems handicappers encounter is success. Your bank can grow out of your comfort zone with amazing rapidity when K-Gen or ENERGY! start clicking for you. I recently took a $1,000 bank to over $11,000 in less than 9 days. I can tell you right now that at the end, I was in no way prepared to bet $1,100 a race, so I put a cap on my betting and flat bet no more than $500 a race. I knew I had reached the top when I found I couldn't sit down after making a bet.

What about exactas, or place and show betting? Well, you can still do them. I make almost half my overall profits in the place and show pools. What you do is setup separate banks for each different type of bet. Want to run some three race piggyback show parlays for a while? Fine, do it. Only use a separate bank, preferably with segments (especially if you parlay, you need segments).

Same thing with exotics. Love the daily double? Fine, start a daily double bank out of profits. If you lose all five segments, I trust you have the intelligence to stop making those bets for a year of so. Want exacta action? Sure thing. Just make the exactas pay for themselves. Save up and start an exacta bank. Again, segments are a really good idea with exactas, which tend to be up and down a bunch.

continued next post...

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Old 05-27-2010, 04:44 PM   #3
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The Beginner's Column continued - Part 3 of 3

The Beginner's Column continued - Part 3 of 3

I want to finish up by talking about the future. Not the future of racing, but your future in it as a bettor. No less an authority figure in our industry than Andy Beyer is on record as saying that you can't grind it out at the races, and-that those who try should forget it and go get a job. Obviously, we in the Methodology disagree. It is not only possible, but we have many clients who are doing it. I did it for three years. On the other hand, not many of our clients are making as much money as Beyer does at the races.

Beyer does present a sedutive betting strategy: he bets more when he feels he has a large edge, and less when he is less sure of the outcome of a race. Nice system if you can pull it off. The reason I have always advocated and used a rigid betting system is that most handicappers, and all beginners, have absolutely no "feel" for how much of an advantage they have in a race. I certainly never did. The absolute worst way to bet is in response to emotion. When an expert "feels" good about a race, it is a far different thing than when you do it. His feelings are based on years of careful analysis and experience, not how he is doing that day.

I have never made any secret of the fact that the handicapper I most admire and would like to be able to emulate is Tom Brohamer. One of the strengths of Tom's betting is knowing when to make what be calls a "prime" bet, and when to go in for just a taste. It has always been a skill I sadly lacked, up until recently. In the past 6 months or so, I have been shocking a number of clients who looked over my shoulder at the races by not following my own oft-given advice and using a variable betting scheme.

The reason for this change is simple; I am now able to make more money doing it this way, though in truth I don't win as many races. When I have a short priced standout, I may bet it alone, putting all my eggs in one basket and taking my lumps as they come. Other times, I may bet a race to place or show only, or cut my win bets way back. I haven't abandoned the discipline in betting I've always advocated, but I have changed my betting approach. For the first time, I now feel that I have progressed to the point that I can dispassionately predict my chances of winning a given race, and size my bets accordingly.

This change in my betting was triggered by my growth as a handicapper, and a change in the technology I have been using to handicap with. No matter the reason I made the change, I know it is a goal many of you aspire to. It is also probably the single worst thing a beginner can try to do. The most common mistake beginners make is to assume that they are proficient after the first taste of success. You should acknowledge right at the start that this is a very tough way to make money, and that the learning curve is not only steep, it is long as well.

If you try to rush into advanced programs or procedures before you have a thorough grounding and understanding of the basics of racing, you are setting yourself up for a serious fall. Trying to emulate Jim Bradshaw, who always bets one horse per race, or Howard, who may bet five or six and still show a consistent profit, is not something you should contemplate at this stage of your development. The "grind it out" money management plan presented above, and the attitude that it represents, works. What it is saying is that as a newcomer to the powerful technology of the Sartin Methodology, you are using tools that are better than you are.

If you second guess your tools, or try to make judgments beyond your skill level, you are setting yourself up for failure. For years, I was content to let Tom, Jim and Howard bet in their very different ways, knowing I lacked the skill to emulate them, yet showing a nice profit and making a decent living all the same. I am now in the process of trying to advance to the next skill level in betting as I see it, and may very well fail in the effort. If I find that I just can't keep on an even emotional keel when, my decisions are wrong and I cost myself money, then I will cheerfully retreat to the technique that has stood me in such good stead for so many years.

Growth in any aspect of handicapping is usually painful and fraught with peril. The old saw of having to take one step back in order to take two forwards is many times agonizingly true in handicapping. You want to take each step carefully, and accept that every change you make will usually wind up costing you money in the short run. The message to beginners is not to be in a hurry to rush into new technologies until you are sure you have exhausted the potential of what you are already using.

Change is a necessity if you want to stay ahead of the game, but too many changes, taken too quickly, can destroy the pattern recognition skills you have so carefully acquired over months of work. Be content to accept yourself as a beginner, and don't try to master the entire complex world of handicapping, or even that portion of it represented by the Methodology, in one gulp. Unlike most races, where Early Pace is a necessity, slow but steady will win the race to handicapping success.

This is the end of the Beginners Column for now. It in no way represents a peak of handicapping knowledge, or the optimum way to handicap. It is viable, and done as directed will show a significant profit. In the future, you should continue to try to grow as handicappers. Read everything printed on the subject. Try out new and strange techniques on paper if you have the time. But as eager as you should be to acquire new knowledge, you should be equally slow to make-any changes to any handicapping procedure that is working for you.

Good luck in the future, and may the force be with you. As always, I welcome your comments about any aspect of this series.

Dick Schmidt
January, 1991.
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Old 05-27-2010, 07:03 PM   #4
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THIS IS A GREAT ARTICLE !.....PERIOD

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Old 05-27-2010, 09:31 PM   #5
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I have not read any of the earlier issues of The Follow Up, and apparently I'm missing some GOOD stuff. This is a fantastic article!
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Old 05-28-2010, 01:35 AM   #6
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Good series of columns, this later version. Great earlier series that stared in Follow-Up #1 as well.

Have used the betting plan featured here off and on over the years. Money-management never goes out of style.
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Old 05-28-2010, 11:41 AM   #7
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"My Personal System of Money Management"

Another reprint from the 5th Anniversary Follow Up Issue 25. This one by Doc Sartin, describing his own approach to wagering and money management - a counterpoint to the preceding article by Dick Schmidt. Enjoy!


My Personal System Of Money Management
by Doc Sartin
This article comes at the request of Dr. Alex Milstein, a client and a renowned psychiatrist who, in my estimation, stands head and shoulders above his psychiatric peers. Alex asserts that over the years, he has often tried to prove me incorrect in some of my stands against mainstream handicapping dictums, but his own empiricism has subsequently proved me correct. In the area of money management he cites the two horse wager and the 60/40 dutch as examples that have brought him more profits than following conventional procedures.

In light of the source; I consider this high praise indeed. The Money Management plan offered by Dick Schmidt (Editor's Note: see this issue's installment of the Beginners Column, post #1 above) is optimal for those who bet exclusively to win. It is also the best way to BEGIN your wagering discipline. It is responsible for Dick being the most consistently profitable handicapper in our organization and one of the top two money makers in Pirco (along with Marion Jones). However, both Dick and Marion suffer through occasional losing days. It doesn't bother them (Another Editor's Note: the hell it doesn't!). They have the essential faith and confidence.

Unfortunately, this is not so for many of you. I have devised a procedure that has, for me, almost completely eliminated losing days. I presented it at our Oklahoma Seminar. A few clients who for one reason or another failed to profit from their win bets, did make money from my recommended alternate bank. Their final R.O.I for the day, despite their losing win bets, was 1.39%.

My own money management system (at last a chance to use that word) does not in any way preclude the viability of the ones published by Dick Schmidt or the master, Huey Mahl. Actually it is a personalized version of their dictum. It is tailored for the person who cannot stand to lose by betting win only; and for those who don't wager on a daily basis because of other committhents; and on the presumption that one has at least superficially mastered the skills as presented in our manual, The 55% Solution. In short, the ability to isolate place and show contenders along
with alleged third choices to win.


STEP 1 - Determine exactly how much you are going to put through mutuels on any one day.

STEP 2 - Divide that amount in half. One half is wagered BEFORE the races begin. This is essential Wager on two win selections with a 60/40 dutch. Use the morning line odds to determine your dutch. The other half is designated for place, show, exacta or quinella wagers to be made during the day as determined by odds opportunities registered on the tote board.

The objective: come as close as possible to doubling your total dollar output.

REPEAT: Place all win bets before the first race. If you arrive late, make them at the first opportunity; all at once with only the program morning line as a guide to potential odds.

Example: I will designate $400 as my total expenditure for the day. Therefore, I take $200 and divide it by the number of races I think I have a chance of winning. My average is 5. So I divide $200 by 5, designating $40 per race to win. My bet will be dutched $24 and $16 regardless.

With my other $200 I look for in-the-money and exotic opportunities based on toteboard odds. In appropriate circumstance, I may even add to an already placed win bet based on higher odds or bet a third horse to win if the odds make it profitable. Sometimes I even use suspicious toteboard fluctuations as criteria. Mostly, however, the $200 is wagered in place or show when I see a designated place or show horse with profitable tote board odds. This includes some exactas and, in Nevada, almost always, the quinella.

The result is I usually make as much profit with the alternate $200 bank as with the strictly win bank. The second bank also sustains me on those days when I enjoy a paucity of winners. I will normally back any previously made win bet with a subsequent place wager if the win odds become 9/2 or better. Over 6 to one I will further back the horse to show. My win, place show bet ratio is 1—2—4. In other words, for every four dollars wagered to win I bet $8 to place and $16 to show; but ONLY when the odds dictate profitability.

While my goal is to make a profit equal to my wagering total, I do not always succeed because I have imposed a somewhat unrealistic goal. However, a 100% profit is reached often enough to make the procedure ideal for me. It has yet to have a losing day for me. The worst case scenario to date was a 22% profit. However, it has had days when the profit reached as high as 300%.

To those who can wager on a fairly regular basis and can stand the emotional shock of an occasional losing day and whose handicapping is not affected by losing a race, I recommend betting percent of bankroll based on the Kelly criterion, with a 60/40 win dutch. I also urge everyone to examine the profit potential in place wagering. I am reminded of the story of the renowned "Chicago" O'Brien, a handicapper from the 1930's to 1950. He earned a documented ten million dollars from racehorse wagering. O'Brien's formula was: "Figure them to win, BET them to place".


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Old 06-07-2010, 09:34 AM   #8
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Do You Need to Lose More?

In this final extract from The 5th Anniversary Follow Up Issue #25, Dick Schmidt addresses some important issues: higher hit rate and lower average mutuels versus lower hit rate (i.e. 'losing more races') but higher mutuels. Also, and directly related - fear of losing as a paralyzing factor and prime inhibitor to professional level play.

I would say these lessons are as relevant today as 20 years ago! Enjoy.


Do You Need To Lose More?
by Dick Schmidt


"You know, what you need to do is work on your losing percentage. You’re trying to win too many races."
- Dick Schmidt
The above is one of those smart aleck, offhand remarks that get tossed off in conversation at seminars. Even as I said it, I knew it sounded bizarre, but at the same time I knew it was good advice in this particular case. The fellow I was talking to was winning a huge percentage (75 or 80% as I remember) but not making any real money.

Because I liked the phrase for its shock value, the conversation stuck in my mind. During the Master classes in Las Vegas, where Michael and I monitored the betting performance of each of the participants, I noticed, the same pattern repeated by many in each group. It would seem that this was a more universal problem than I thought. Then, just recently, I received the following letter. Apparently my flip remark struck home!

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So what could possibly be wrong with winning a lot of races? Am I saying it is really possible to win too many races? In a way, yes I am. By focusing on win percentage rather than actual dollar profits, many of us in the Methodology have lost sight of the real goal we all should share: making significant money through handicapping.

The heart of the problem is an interesting dichotomy that I and others have observed over the years; the higher the win percentage, the lower the average mutuel. The inverse is also true; a lower win percentage tends to be offset by a higher average mutuel. This applies both to handicappers and racetracks. Of course, it isn't by any means an absolute rule; at times things can go gloriously right or horribly wrong, but over time this trend tends to prevail. The intriguing thing is that two handicappers can attend the same races on the same day and experience opposite ends of the spectrum.

I think it is a matter of focus, and of losing sight of goals; together with a heavy overlay of fear. Fear of losing dominates hopes of winning, especially as bets get larger and more important to our financial status. One client who called me recently in some distress told me that he was trying to be fulltime handicapper, but wasn’t making enough money to live on. He reported that he was winning almost exactly 80% of the races he bet into. How in the world can an 80% handicapper have problems?

Further probing revealed that he was driving that 80% win percentage by limiting his play to 5 or 6 bets a week, two horses per race, and that the average rnutuel was $5.70. Let’s take a close up look at what he has to do to earn a living. First off, he must be very patient, but he’s already doing that. Obviously he isn’t an action junkie. He told me that he split his bet 60/40, and that his low price horse won 65% of the time. He also spent a lot of time grinding himself for his losses. He felt that if only he could eliminate mistakes, he could make it. My question is: how many mistakes can an 80% handicapper be making? In this case, at least one, but not one he was even aware of.

What we have is an individual who makes about 275 bets a year (assuming he plays 50 weeks a year and makes 5.5 bets per week) and has an return on investment of about 21%. That is, using a $5 unit, he’ll win 52 out of 100 races with the low odds horse ($3 bet) and 28 races with the high odds horse. In both cases, the average is $5.70. Actually, it is probably even worse than that, as many of the low odds (big bet) horses must pay far less than $5.70, while the "average raisers" will have the smaller wager almost every time; but let’s be generous. What this means is that for every $500 bet, he can expect a return of $604.

If he wants to make the adequate yet still not extravagant living of say $50,000 a year, he must bet about $250,000 dollars a year, or over $900 a race. This means betting $540 on his low odds horse and $360 on the high odds choice. It also means playing from a bank of at least $9,000 and being extremely self disciplined about taking profits and absolutely unshakeable in betting. Somehow, I don’t think this is what most of us had in mind when we started off to become handicappers.

He also has to factor in the trauma of losing. Sometime during the first two years, he must expect to lose as many as 6 in a row according to the simulation program Dick Mitchell provides with his 5-in-1 program. This means he’ll be down $5400 in a week, and it may take quite a while to dig out with only a $5.70 average mutuel. Given all this, can he succeed? Sure. All it takes is a clear head under pressure, the willingness to bet $900 a race and a track with a handle large enough to take $900 bets. If our handicapper wants to make more money or take off more than 2 weeks a year, he’ll most likely have to move to where he can play New York or Los Angeles tracks.

The reason this fellow called me was that he was trying to make a go of it with $100 bets. This would limit his income to less than $6,000 a year, not what he had in mind at all. Which brings us to the root of his problem, at least as I see it. He is so afraid of losing a bet that he has become super selective. I recently listened to a series of lectures by motivational speaker Anthony Robins on taking charge of your own life. He describes how although humans will go to great lengths to get pleasure (winning), they will go much further to avoid pain (losing). If you want to stop smoking, give yourself a shock every time you see or think about a cigarette (or hire Mr. Schick to do it to you). You’ll soon forget about any pleasures smoking ever held for you and remember only the pain associated with cigarettes.

Racing in a way enforces a similar regime. No matter how sweet the victories, the pain of the losses are uppermost in our minds, and above all else we try to avoid pain. It happens to all of us, and it can creep back into our minds even if we successfully conquer it for a while. Losing hurts, and hurt is bad. It is better to slowly starve than go through such pain every day.

Go back to our 80% handicapper. He is trying to bet on only "sure things." While a bet on a sure thing is fine with me, they do tend to pay rather poorly. Please remember that any horse that the Methodology presents as a real stickout is not going to be able to hide it. Anyone with a Racing Form will be able to see the horse has a big time shot at winning. All the touts and newspaper guys will be pushing it, and the trainer and owner will be talking up the horse to all their friends. With all this grinding down the price, it is little wonder that low prices are the rule.

On one level, the solution is simple and readily at hand. Play more races and use some type of analysis that is dissimilar to that used by the majority of your competitors. In Methodology terms, run a lot of races with K-Gen, ENERGY! or Synergism II, bet 5 or 6 races a day, and bet into those low priced claimers and murky races. Go for it.

On another level, the answer is much harder. The reason that Dr. Sartin has always emphasized win percentage is that he was well aware when he started that he was a voice crying in the wilderness, and that if he didn’t produce immediate results he would quickly be abandoned by those he was trying to help. Most handicappers have such fragile egos that they simply can’t endure the stress of a losing streak. Yet anyone who has even a passing knowledge of statistics knows that "streaks" are a part of any random distribution. Everyone has bad patches and losing days.

In the past few years, things have changed in the Methodology. We have more and more clients who expect to make a living in racing, not just stop hemorrhaging money. Those of you with enhanced expectations need to realize that though the old mind set of win percentage isn’t "wrong," it is outmoded for you. Actually, it was never right or wrong, it was simply necessary at that stage of development; both of the handicapper and the Methodology. Today, many of you are trying to stretch beyond this world view, expanding your horizons to those of professional level play.

What we must come to accept is that losing is part of racing. I can safely say that there are only two types of handicappers: those who admit to having losing days and liars. To move on to the next level of performance, we need to change our perceptions. The metaphor of baseball can serve well here. No one expects a baseball player to hit the ball even half the time. Hitting "only" a third of the time is worth a couple million a year in today’s market. Since it is an expected part of the game, a ballplayer hasn’t failed when he makes out. He has fulfilled part of our expectations. For every hit, there are several outs. Part of the game.

Racing must be approached in the same way. The other side of saying we win 80% is acknowledging that we lose 1 in 5. Therefore, since we expect to lose 20%, we haven’t failed when it happens. This is simply one of the races that we expected to lose when we walked into the track. No one wins them all, and calling a loss a failure and berating ourselves for our weakness is self destructive. What we must try to do is learn that losing is a natural part of racing, and that it is the expected outcome in a great many races. This is not an easy thing to convince yourself of (ask me how I know that), but it is key to the inner peace so necessary to success at decision making.


continued...
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Old 06-07-2010, 09:35 AM   #9
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Do You Need to Lose More? ... continued (Part 2)

Do You Need to Lose More? ...continued (Part 2)

What I told [the gentleman who wrote] and also the caller whose name I forget was to stop concentrating on win percentage and start counting your winnings, not your wins. Let me ask you a question: am I having a good day when I make 14 bets in 6 races, have the winner in 3 (50%), and overall cash 5 of my bets (36%), losing all my exotic wagers? Take a look:

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Sounded like a dreadful day, didn't it? Winning 36% of my bets and losing both exotics. Yet I managed a $577 profit. The reason I was able to show a nice profit was that I wasn’t afraid of losing. Note that my average mutuel was only $5.28, but because I took a big swing at the 6th race, I finished way up for the day. If 'Without a Plot' stumbles, I show a $83 loss on the day. It happens. On the other hand, 'Take It On The Lamb' finished third by a neck and 'Gallant Helio' won. Move 'Take It' up another 5 feet and I have a $1500 swing over to the profit column.

Does that mean that the fourth race was a miserable failure or the sixth a smashing success? No, they are just races. Part of the vast river of races that flows by, without beginning or end. It is undeniable that one race produced better results for me than the other, but taken as parts of the whole, both are to be expected. Glance up at the ninth race from the day before. I picked three longshots in this race, giving an even money favorite no shot to win. I was absolutely correct in my analysis, but still lost money.

'Do One Dance' won at about 15 to 1, and was disqualified for being bumped! (I’m not bitter. Those scumsucking, no good . . .). OK, I still have the horse that ran second, and at about 6 to 1. Unfortunately he was blocked just a tad by the horse that caused all the trouble and the favorite caught him in the last 6 inches. Dead heat. I wind up collecting $3.60 on-a horse that should have paid $14 and lose $28 on a race where I have the winner and the place horse at long odds and "should" win over $500.

The issue is not racing luck, which will balance out in the long run, but perceived success and failure. Did I fail in that 9th race? I don’t think so, but I did bet $100 and got back $72. A much more realistic way of looking at these three races is to say that I put myself in the way of winning a lot of money three times, and one of them panned out. I lost $28 in the 9th, another $120 in the 4th and won $650 in the 6th. Was I taking a chance in the 6th by betting only one horse, even though he had dominant figures? Sure, but given the odds, that was the way to take a big bite. And ifI lose? If 'Without a Plot' stumbles? So be it. I’ll get them next time. I’ve lost races before and had losing days before, and I’ll do it again.

As a matter of fact, I made 4 bets in the last two races that day and won one of them. Total bet: $300. Total won: $280. A failure. However, 'Foolish' missed at a head at 9-2, just beaten by another even money horse that I thought was overrated. In this instance, I was wrong, but the winner needed a perfect trip to beat me. Again, it happens. Six feet the other way and I turn a $150 loss into a $275 win. If you insist on calling this failure when it happens to you, you need to reaccess your goals.

The true point is that I'm a sucessful equine investor not because I win a lot of races, but because I win money. I am able to support myself in the manner I so richly deserve because over time, enough money-winning opportunities pan out that I show a significant profit. This day was part of a cycle that started with a $1000 bank. You can say it was the fourth day of the cycle, but really it was just 6 races in which I invested $875 to generate a profit of $577 (a 64% R.O.I.) and showed a 17% growth in my bankroll.

Had this particular segment of the, cycle shown a huge profit or significant loss, it would not change anything except the numbers to the right. It is still just part of the cycle, and as long as the trend is upwards, nothing else matters. Not winning races, not huge exactas, not bragging rights, nothing.

I find it so odd that fear of failure, and our mind’s attempt to avoid the pain of failure most often leads directly to failure. Of course, it would be ever so nice if we could win 80% with an average mutuel of $10, bobbing happily on a sea of money. If you can do it, more power to you; for me, I find that the absolute key to winning is the conquest of my fear of losing. As long as I meekly approach the windows trying not to lose, rather than boldly attacking them to conquer my share of the profits, I am doomed to lasting failure.

The battle to conquer fear is always a hard fought one, and never completely won. I still succumb to weakness, and try to spread myself around to the point that no matter what happens, I will win, even if just a tiny amount. The trigger to writing this article occurred earlier this afternoon. I was having one of "those" days. I won the first race, then dropped the next four, including two prime (big time) bets. My companions suffered equally. When the final race on the card came around, I was $930 down and it was tempting to say "It’s not your day, Dick. Go home." - in
spite of the fact that I had planned to bet the race when I left the house. In fact, several people I was at the races with said exactly that, including some friends of my wife I had been recruited to pick horses for. (Wives are exempt from all PIRCO rules. At least mine is! Bless me Howard, for I have sinned. I touted. But I vas only following orders!)

I went to the window and bet $500 into the race, my top level prime bet. Not to get even. Not to show off. Not out of anger. I made the bet because it was the right thing to do. My profit from the race was $850, thus I got out of the day "alive." But no matter how the race turned out, the only truly bad decision I could have made was to allow fear to cripple me, to pass a race I had earlier decided was a very good betting opportunity. And yet, I heard the voice of fear whispering, and I fought the good fight once again. Occasionally I lose, but to the extent that I conquer my fear, I succeed; no matter the outcome of the bet I make.

In this aspect of my handicapping, if no other, I can truly say I have become a professional.

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Old 06-07-2010, 10:36 AM   #10
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Based on my experience as a pro for a year and a half on the SoCal Circuit in the early 90's, both of Dick's articles are right on. Conquering the fear of losing and the deviations from the plan it causes is an absolute MUST.
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