Tuesday, May 24, 2011

Playing the ponies, part 2

In the first part of this post I said that the professional bets according to a plan and uses past performance charts to pick horses. But having a plan is not the same as using a fixed system. “[I]f the public play ever did get wise to the facts of life, the principle of ever-changing cycles of results would move the form away from the public immediately. Few players take into consideration the principle of ever-changing cycles of results, although the minor ups and downs of this principle can be seen at every long race meeting.”

Bacon looks at one of the older betting systems, calling in its simplest version for a play on the horse most recently in the money. “When this system was known only to a select few, it made money for them. … But, after a time, one of the men who had made money playing it, is said to have decided to publish it and sell it to the public for a fat price. Hardly had the public commenced scrambling for copies of his system before a hundred or more imitators and system pirates began rewriting the system and using its principles for supposedly ‘new’ systems of their own. It was only a matter of a few years before there were hundreds of cheap imitations of the system. It became common knowledge among even the most ignorant players.” And what happened? “Originally, it was claimed that the method picked horses averaging 3-to-1. But soon the weight of the public’s money knocked the prices to 5-to-2. Then to 9-to-5, as more and more people learned the method and learned to read the new past performance charts which were just getting into wide circulation at the time. Then the prices came down to an 8-to-5 average. Finally, the down-trend in odds made the average price of these horses at some major tracks a scant 3-to-2. …

“Suppose the system originally had two winners out of each seven horses played, on average. That meant two winnings of $3 and five losings of $1 each, on dollar plays—all on average, of course. That gave a flat bet winning of $1 on each seven dollars invested. But when the prices were driven down to 5-to-2, the flat bet winning was wiped out. The system just broke even. And finally, at the later odds of 3-to-2 average price, the system lost $2 on each seven bets of $1, even though the percentage of winners (two out of seven) remained the same. To be accurate, we should say ‘even IF the percentage of winners remained the same.’ Because, in actual racing, the percentage of winners does not remain constant as the public’s play beats down the prices of horses picked by any set scheme.” (pp. 29-30)

Bacon claims that the turf is the “poor man’s opportunity.” He writes: “It seems that people who have failed at everything else have more chances of succeeding at turf betting than people who have been very successful. Perhaps, because the former try to follow the rhythm of results sequences, while the latter try to force the races to run their way, as they have forced everything else in their own lines.” (p. 78)

How can a person get started playing the ponies? He starts with money for ten bets—say, $20—plus $20 in reserve. He waits until he sees what he thinks is a perfect overlay spot to place his first bet. Win or lose, he has to wait patiently for another overlay spot before placing his second bet. With each bet he is using 5% of his total capital. Let’s say that he is successful and runs his capital up to $200. At that point he should reduce the size of his bets relative to the size of his account—let’s say, from 5% to 4%.

And what happens if he loses his entire starting capital? “SO WHAT? He’s been strong. He’s done his best. He just wasn’t ready. His life didn’t go with it! He didn’t hock his car, or his house, or his job. He can tell his wife he drank up the money, lost it playing poker with the boys, gave it to a sick friend, or anything! Of course she’ll put up a heated discussion. So what? She argues anyway, even if he spends a deuce on one of his hobbies. But the whole incident is forgotten in a few days. Nobody gets hurt.” Then the player studies more and “makes paper workouts day after day from the past performance papers or from his file of results charts.” He can try again the following season “with more knowledge and with more determination to have the required patience and guts.” (pp. 81-82)

(to be continued)

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