In the fourth part in this series, US professional Barry Meadow and PPM editor Brian Blackwell discuss various aspects of the task of picking and backing winners. The topics range over most handicapping factors. In this month’s article, staking is discussed.

Brian (BB): This magazine has spent almost 20 years talking about money management and how to bet, and I think the one moot point that’s emerged is that the best of handicappers end up losing because while they can get their head around the form they can’t achieve the same success with the way they bet.

Personally, I’ve seen a few very serious punters knocked out of the game because they could pick winners but they couldn’t back them well enough to make things pay off.

Barry (BM): This leads to the larger question of why we go to the races. What are our goals? To have a good time with friends, have a couple of drinks, and gamble a little? To try to stay in action for every race? To try to make long-term lifetime profits?

If you go to the track as a hobby, then money management is not that important. You win some, you lose some, and ultimately you pay an entertainment cost.

You expect to spend money if you play golf or attend the theatre, so why shouldn’t you spend money at the races?

You’ll lose $50 on average and throw in other expenses and you’ve spent maybe $70 for an afternoon’s excitement, which is just about the going rate for other forms of entertainment.

BB: That’s right, and there is one advantage with going racing and it’s that you really do have a chance of paying nothing if you’re clever enough to find winners and back them well. No other form of entertainment gives you the chance to emerge without it having cost a cent and maybe with money IN your pocket.

BM: Most of us are looking to make some money with our betting but success in the long term is much different from measuring it in the short term. If you are going to have a chance at making long-term profits, you’ll need to be selective, and that includes not making betting decisions until you’ve got all the available information.

While you may think you’ve got three prime bets and three action plays on tap, your wagering schedule should never be cast in bronze. Maybe your plays will change. If I have six bets originally planned for the day, the chances are just about nil that I’ll play them exactly as I envisioned in the morning.

There’ll be late scratchings and possibly a track bias to deal with. More importantly, until I see the odds I have no idea whether I’ll be betting a certain horse.

Some time ago, I narrowed a race to Horse A, which I really liked, with B and C as far-behind but not impossible contenders. I was planning a huge bet on A.

However, apparently everybody at Santa Anita had the same idea and my wonderful selection was pounded to oblivion. Strangely enough, both B and C were let go at decent prices. I bet them both, and B won.

BB: I have to say I encounter this situation a great deal. I might tip a horse priced at 6/1 in the morning market but by race time it’s 7/4!

That’s when I seriously start reconsidering, though, let’s face it, the very fact that it’s short indicates it has a very strong winning chance! So sometimes it can be a real pain deciding whether to discard the horse that was "value" at 9am but no value at 3pm.

BM: Generally, if my top pick gets hammered I wind up passing the race altogether but every so often some other runner offers good value.
Until you see the odds you never know whether your prime bets are worth playing, whether any horses you didn’t originally plan to bet suddenly seem like bargains.

BB: How would you recommend a punter use a bank of $250 for the day?

BM: As a general rule, you might bet four times the amount of money on your best bets as you do on your action plays, and perhaps bet twice the amount to win as you would in the exactas and the other exotics.

In this way, you will be emphasising your best bets but you still have a chance to win something if an action bet hits. So the $250 for three best bets and three action plays could be allocated as follows: Prime bets: $60 per race, with $40 to win and $20 in exotics; action bets: $15 per race, with $10 to win and $5 in exotics.

That takes care of $225 with a few dollars left over.

BB: The player using this approach will need, of course, to observe all the usual rules about value and so on, as we’ve just talked about. I recall, Barry, that you once wrote about overbet versus overlooked in this regard?

BM: Yes, whenever we handicap we need to look not just for the winner, or even for just the contenders.

Instead, we should be aware of which horses might fit into two categories: one is an overbet horse that looks obvious to the crowd but we don’t like him for some reason, and the other is the overlooked horse which has a legitimate chance but might be overlooked by the crowd.

The ideal race to play is one in which BOTH these horses are part of the mix. Generally, the overbet horse will be the favourite while the overlooked horse will be the second choice or higher. This is not always the case, though.

Sometimes the favourite will be overlooked or should have been bet more than he has been and maybe a horse who should be 6/1 is hammered to 3/1. Sometimes we will make bets on an overlooked horse, even though no runner is especially overbet.

Other times, a horse may be overbet but nothing seems to offer much value anyway.

If we really believe there’s an overlooked runner in every race we’re seriously mistaken about the nature of pari-mutuel (tote) betting because every long-term statistic shows that the public is quite good at estimating odds. But the public is not correct all the time. It’s just that the favourite loses most races, which is more about the nature of how races are put together than it is about the public’s errors.

The money to be made in this game comes from when there’s a discrepancy between the way we see a race and how the public sees it.

They’ve overbet a horse while we think they have overlooked a horse. We don’t have to be right all the time but if we are right often enough, we can win.

BB: I guess this is the nub of the whole betting game. We know we are going to be wrong more times than we’re right, so we have to secure the odds on our winners to compensate for this. If we don’t, we are history.

Which brings me to the next theme to discuss and this is about staking itself, the act of betting. How do we bet?

Do we put the same amount of money on each selection, in other words, level stakes, or do we bet to a percentage, or use a progression method, or go for a target betting plan?

The arguments about staking plans have been going on since racing started and I suppose they’ll be raging long after Barry and myself are betting in the great betting room in the sky, so we know the issue is a vital one for anyone interested in making money.

I tend to vary my approach but on the whole I bet a small percentage of my bank and try to keep it stable, though I will splash out whenever I think I have a real value bet.

Click here to read Part 5.
Click here to read Part 6.
Click here to read Part 1.
Click here to read Part 2.
Click here to read Part 3.

By Barry Meadow and Brian Blackwell