The argument is as old as racing. Should you bet level stakes or progressive? If your answer is the former, then that’s easy. There’s little more to do. You just front up, and you have your bet on your selection. Your bets are all the same. They never vary, just like that old cigarette advertisement.
It’s a pretty boring way to live, but “boring” is not the name of the game. Winning is. And I know several professionals, both here and overseas, who swear that this is the only way to go, long-term. Over so many years
I’ve swung towards and away from this principle.
I used to feel totally committed to mild progression. I still do when it comes to systems and I will argue till the cows come home, that it is quite possible for a system to be pretty ordinary at level stakes, but to come into its own with a reasonable and sensible progressive betting plan.
I also have found, in my own investment, that a sensible progressive increase in my staking should accompany any progression in my bank(s). One of the most difficult things to predict in racing is when a run will occur. And that goes for both good runs and bad runs.
If you don’t think you will get more bad runs than good runs, I have some terrible news for you. You will win the majority of your money on seven or eight absolutely brilliant weeks during each year. If you are lucky, you will make a little bit or cut even on about 25 more weeks (in other words, half the time, which is very satisfactory). The other 15 or 20 weeks (and I can’t be any more specific than that, nobody can) will be donation time, where you make your charitable gift to the friendly bookmakers and the TAB. What you have to ensure is that what you receive is significantly greater than what you give.
In racing, it is better to receive than to give!
In other words, in layman’s language, imports should exceed exports, or credits should exceed debits. If at the end of your racing year, you find that your balance has plus against it, in other words it is in the black, then you are amongst the proud few. I’ve always found it quite astonishing when talking to what we philosophically call “the average punter” in betting shops, TABs, and on racetracks around the world, that they possess something approaching a death wish.
They don’t expect to win!
Now that’s really weird. When you think this through, it’s not particularly different from taking $50 out of your pocket as you drive along, rolling down the window, and just letting the note blow away. It’s that odd. But it really is an aspect of the average punter and it’s the one that the bookmaker trades on. These “average punters” don’t keep records, and if they are really good at anything, it is at wiping from their minds all those losing bets.
Whenever you hear somebody reporting very loudly on his success, you are probably listening to an “average punter” who has fluked a rare success. Doesn’t that sound smug and superior? The trouble is, it’s pretty near the truth, and it represents the guy who just knows enough to be dangerous. To himself.
I’m going to tell you something else that is very likely with these “average punters”. They do not bet anything like level stakes. They bet all over the place. So they end up having $2 on a winner (at maybe $16) and $20 on a couple of losers. Overall they lose, but all they remember is that 15/1 winner. As I said, it’s very easy to be smug and superior about this, but we’re in a cutthroat industry and we have to remember who are driving the BMWs and the Mercs.
Level stakes might well represent the very best way for Mr A. Punter to progress, if you’ll forgive the pun. For example, if he had invested $14 on each of those three selections, instead of $2 on the winner and $20 on the other two, he’d have outlaid the same amount of money.The difference would be in his return, which would be a really impressive $224 for an overall profit of $182.
Naturally, I invented that example, but it makes its point doesn’t it?
Well, that’s probably the most important of all arguments for level stakes. You don’t know when the winners will come. Even with a good system, and you know that they will come, and years of testing tells you that unless the whole world of racing tips upside down, they will come again, you still don’t know when they will come.
You might have detected, in what I just said, my confidence with our best systems that the winners will come. Under those circumstances, a mild progression seems to me perfectly logical. I do expect to win, I just don’t know how long it’s going to take. Recently, we had a superb system which progressed very mildly until the bank rose by $1,000. Every time the bank increased by that figure, we went back to our basic bank of $1,000 (remember, you don’t have to have that grand in your pocket, it only represents the worst possible scenario if you manage to lose maybe a hundred races in a row).
Some of our clients contacted me and asked why on earth they shouldn’t just keep going after they were a thousand, or two thousand in front. Why should they start again? My response was that the decision ultimately belonged to them, and that they could reasonably expect the winners to come.
However, a lot of other things come into this. For example, what they call your comfort zone will rear its head at some stage. If you are not comfortable with having a bet of, say, $50 on a horse, then you shouldn’t be betting it. Whatever your level, you will reach it sooner or later.
I even suggested to one email contact that with the money he had made from the system, he could go on his annual holiday and probably not need any extra cash. His response was that he would have to go back to square one, so I asked him what exactly he was after with his racing. It wasn’t his profession, but he indulged in order to make a little profit on the side. I think I gave him the right advice, but I don’t know if he took it.
Progressive staking comes in many guises, but essentially you can put it into two camps. You can classify progressive staking as enlightened and financially viable, or as risky and even downright dangerous. Mild progression is the only way to travel if you don’t want to bet level stakes. Anything else is just gambling.
I made the point above, about not knowing where the winners will fall. In a good selection method you can still only say one thing for sure: each horse you choose is either your next winner or your next loser until it crosses the finishing line. Then it is one or the other. If you are using a reasonably strong and relatively rigid selection method, each selection probably has about the same chance of winning, as far as this selection method is concerned. This does not mean that the odds will be the same about each selection, because opinions will always vary.
Let me put this another way. Your selection method, be it a very good system, or your own modus operandi, is based on all your knowledge and all your understanding of the racing game. You’re committed to it, long-term. You’re expecting a certain win strike percentage rate over the long term.
You’re also expecting a certain average win price, based on past results (which, regardless of what critics might say, are all the concrete evidence we ever have to go on).
So as you can see, the fundamental argument is for level stakes. But with many methods, and many systems, things can be improved radically by a quiet and confident progressive approach. For example, if the investor assumes that he is going to find 20 winners, give or take a couple, in every hundred selections, and that they will return him, on past performance, somewhere around $140, a mild progressive plan makes sense.
Particularly it makes sense if you are on the up. That is why I remain committed, more than to any other plan I have ever come across, to the staking plan Statsman and I devised many years ago. We called it the 1 per cent Plan.
It is very simple and extremely effective. I referred above to a bank of $1,000. That plan ran using this staking plan. You bet 1 per cent of the highest point your bank reaches. So you start with $10, and (this is very important) you never regress. This gives you an absolute minimum of 100 bets at $10 or more. If you have more cash in the bank, by all means start at a higher level. But whatever you do, don’t get outside your comfort zone and don’t establish a bank which you can’t fund.
We were stopping the bank when it got to $2,000, taking $1,000 and starting again. That sort of thing is up to you. When the bank is at $2,000, you are betting $20 per horse and you might feel still quite comfortable with that.
On the other hand, it’s very nice to pull a thousand dollars out and use it for something you’ve been thinking about for some time. It’s your choice. But the whole argument here is one of restraint, of patience. If you are pretty sure that the winners will come in your hundred bets, then as they come, you are raising your stake ever so slightly (it is always 1 per cent of the highest point the bank reaches, and remember, it never goes backwards). You will always have a run of a hundred bets in your bank.
Just one parting thought here. Whenever the bank rises above the basic $1,000 (because you are in the black) your investment rises too. It might not be much, and maybe not even enough to take you to the next 50 cent unit, but that will come. It’s nice to think that whenever the bank is above $1,000, you must have a hundred bets still remaining. So, in a sense, every time a bank which is in profit rises a little more, you have a minimum of a hundred bets at that level!
I think I just convinced myself that this is still the best staking method I know of. Letters welcome.
By The Optimist
PRACTICAL PUNTING – APRIL 2007