The best way to evaluate any money management method to put it under scrutiny by a risk-benefit analysis. The most effective methods will minimise risk but maximise gain.

Sounds good to me, and I am sure, to you as well. And this is where I talk about an approach which incorporates the risk-benefit power. It's what is known as the Base Bet PLUS Square Root plan.

The base bet is suggested as $2. Using this method, your every bet to win is equal to $2 plus the square root of any profits that have accumulated. If there are no profits, your bet remains at $2. As profits rise, you find the amount to be added to $2 by checking the square root table (see below).

US author James Quinn says of the BB PLUS SR method: 'One of the best (advantages) is that it offers the best return on money invested by the small bettor. That is, the risk factor associated with the method is as low as can be found anywhere.

'A second advantage is that the method ... gets good results at minimal risk over a season's time, a month's time, a week's time or even one day's play. Best results are achieved from continuous play. The method is also a low-risk way to test handicapping angles, as to effectiveness and rate of return.'

Quinn, who based his thoughts on his research into fellow writer James Selvidge's views, says handicappers who play about a third of races during a major season and can pick as many winners as 'the crowd' as a whole normally does (around 33 per cent), at average odds of 2.6 to 1, can expect to earn a fine return on the amount invested.

He adds: 'As with any effective systematic method of money management, handicappers using BB PLUS SR for their normal selections and for angles under study will be proceeding with discipline in their betting, thereby relieving themselves of the problems and anxieties that regularly result from unsystematic money management.'

Quinn points out that this method is 'highly sensitive' to longshot payoffs. When these happen, however intermittently, profit margins increase terrifically.

As its American proponents suggest, the $2 base bet should always be maintained. James Selvidge, in his book Money Management, says many practised handicappers cannot imagine making profits with such a small base bet. But, he stresses the following: 'Most gain occurs from the smallest base bet, as profits depend on other profits more than risk capital, and money lost during any series of losses must be minimised.

'If the first five bets are lost, for example, the amount lost is $10, the absolute minimum. If the base bet were $20, the handicappers would be $100 behind already and reinvesting a greater amount in ratio to any profits that began to accumulate. In short, the risk factor goes up.'

As Quinn and Selvidge explain, the real power of the BB PLUS SR approach comes from the 'additive power of the square root function'. To put it simply, as profits accumulate, with each succeeding bet the player is betting back a smaller percentage of the profits. As profits grow, the size of the bet increases but the percentage of capital at risk decreases.

Says Quinn: 'If the early profit is $25, the next bet is $2 plus $5 equalling $7, which is 28 per cent of the profit. If later profit is $400, the next bet is $2 plus $20, equalling $22, which is 5.5 per cent of the profit.

'Handicappers betting only small percentages of profits can stay active for long periods, regardless of winning and losing series.'

The following is a short example of the method at work on 4 bets (square root is always based on the cumulative profit total of the betting series, not just the last-start win profit):


(Next bet would be $2 base plus $5 square root, equalling $7 bet).
Total stakes bet: $15 Total return: $45.20 PROFIT $30.20


3-6 2
7-12 3
21-30 5

*A full square root table will be published in next month's P.P.M. Also, in the next issue of P.P.M. we will examine further this superb money management approach. In this article we will look at how you can use the method in 'flow' betting of 15 bets each, with a risk capital of $30 per flow.

Click here to read Part 2.

By Denton Jardine