** 5th Anniversary Follow Up Goodies **

[Ted Craven]

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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