Last month I promised to design a year's hypothetical staking plan, an example for you that would restrict your betting on poor days and increase it on the better days, according to your wishes.

The good and bad days are yours to decide on, but you have to end up with one-third of the year good and two-thirds bad. Two-thirds of the year, most of the time, we all lose (if we tell the truth) and we have to win enough in the good third to more than compensate. If you want proof of this, all you have to do is think this way.

Can you back a winner in three bets? If you say yes, you are better than the rest of us, as the best we can do is one in four on good days. If you can get one in three every time, well, you're exceptional. Or backing favourites, and in that case you'll steadily lose.

So, if you can only get one in four like us (and we work hard for that), then you are going to lose on more days than you'll win- If you can tell, from bitter experience, which days are likely to be your best, things will look up for you all year round. That's what we were into in the last issue.

You will remember that I suggested that for, say, $50 a week bank, you could rebalance the money so that you could bet more when you want to on the best meetings, and save by betting less on the majority of days when you really just bet for the heck of it.

I pointed out that you could bet for, say, 34 weeks at $10 a week, and the other 18 weeks could see investments averaging out at $125 a week (and some change, $10, as it doesn't quite come to $2600).

I have devised this allocation plan and it assumes you won't win a race over the whole twelve months. Now how low can a plan get?

But the fact is that we want to talk about money management, and strategies, and we don't want to assume anything about cracking big trifectas or finding a magic 50/1 winner.

The best way is to ignore the winners and then come back to the plan later on and talk about what might occur with reasonable expectations.

ALLOCATING YOUR BANK OVER THE YEAR
Let's say we started in the second week of December, 1995. Remember that there are five Saturdays in some months, hence the totals I will come up with are not exact sequences of four for each period of a month.

I list the Saturdays at $10 a week betting (34 of them) and those at $125 a week betting (18 of them). More or less that's one-third at the big rate and the rest at the small change bets. Then I indicate the reserve you will have after each period, saving $40 each weekend you bet $10, and going over by $75 every time you bet $125 for the weekend.

I call this the "reserve" and it's what you are building up to use on the good weekends.

  Saturdays
at $10
Saturdays
at $125
Reserve
$
DECEMBER 40160
JANUARY 4 0 320
FEBRUARY 4 0 480
MARCH 2 3 335
APRIL 2 2 265
MAY 4 0 425
JUNE 4 1 510
JULY 2 2 440
AUGUST 4 0 600
SEPTEMBER 2 3 455
OCTOBER 0 4 155
NOVEMBER 2 3 10
As you can see, there were 34 weeks where you invested $10 a week and 18 weeks where you put out $125 a week. You had $10 left over to start up the new year.

The times you chose to bet bigger were the Golden Slipper and Easter meetings in Sydney, then some Brisbane meetings in winter and then the Melbourne Spring Carnival.

Notice you went for the doctor for ten weeks in a row in the spring at Melbourne, and you could do that because you had bet $10 a week for 30 weeks in the first 42 weeks. You had built up a credit balance of significant proportions.

It could be differently arranged, and you could have negative balances temporarily if you want to bet the $125 a week in, say, April/May all through into June. Then you might not be able to bet those ten weeks in the spring. On the other hand, one session of eight weeks and one of ten weeks might be your choice for your big betting.

The facts are that you have outlaid an average of $50 a week over 52 weeks, but one-third of those wagers have been at $125 a week and two-thirds at $10 a week.

THE WINNING WAY
To return to last month's major point. Shall we say that when you are at your best you can do what we suggested, and win one race in four at a minimum of 3/1 when you are going well? Shall we say that you can manage an average of 4/1?

That means with 18 weeks at $125, you will bet (at $25 a bet) on 90 horses (90 x $25 = $2250). We will assume that you can find 23 winners in those best 90 bets at $5 dividend, on average.

The trick is when you win those one in four races. Since you are at your best in your own chosen period (the best one-third of the year, the times you KNOW you do best, year in year out, the times when you are most confident). I would say that if you can get your one in four at the good times, you will back (round figures) 23 winners at $5. This makes $2875 for your $2250, a profit of $625 or 27 per cent on your turnover.

Let us assume that you lose on the other 34 weeks. Lose an average of half the money (you'd do better backing favourites, so this is realistic).

Therefore you lose $170 of your $340.

The stats for the year, on that basis, are as follows:
GOODWEEKENDS$2250 out$2875 inprofit $625(+27%)
BAD WEEKENDS$340 out$170 inloss $170(-50%)
ALL WEEKENDS$2590 out$3045 inprofit $455(+17.5%)
THE ADVANTAGES OF THIS TECHNIQUE
This underlines the concept that you only really ought to bet when you feel you are at your best, but then for two-thirds of the year you would not have a bet and not many of us can stand that kind of strain.

So is this a load of the proverbial woopsy-do?

I don't think so. I think it can teach us how to control our betting and direct it to the best times, the times when we know from years of experience that we do better.

Apart from all other factors, there is a strong argument for betting the most money when the form is most exposed. The prices are still good (for example, the winner of the Caulfield Cup started at 10/1 in the Melbourne Cup with the top rider and the leading trainer behind it - is that value?).

A GENTLE INCREASE
Now, can we take our theoretical plan one step further? Let's say that, on "good" weekends, we decide to increase our bets by one-fifth of our staking unit every time we hit a winner.

This is a tried and true concept, very safe, and you will note that we are betting about one per cent of our bank of $2250 on the good days. So we have plenty of reserve. We have to back 90 losers to go broke.

That's 90 losers in a row!

So, we back a winner in four on the good days, at average odds of $5. We raise the bet after every winner by $5, making $30, $35, $40, etc, stopping at $50 in the first 12 months 'betting.

Why stop at $50? Because we want to do this long term and we don't want to give back much of our profits if things don't work out short term. Also there's the confidence thing, where you can lose your bottle very quickly if you lose a series of bets, especially after a few nice winners.

With those 23 winners we anticipated, we could be up around the $140 mark per bet, and a few of those losing would make a hole in the bank regardless of how much we had put together in reserve.

So patience rules. As the great man said, "wisely and slow, they stumble that run fast."

Click here to read Part 1.

By Ian Macarthur

PRACTICAL PUNTING - JANUARY 1996