There's an old saying that you should always remember when you are punting: When in doubt, stay out. There are many punters who would have been wealthy people today if they had followed that advice. Instead, they opted for the 'crash or crash through' approach, and lost.

I recall one well-known punter who, as a young man, could not control his wild and compulsive betting habits. The only thing he desired was betting action. He got through many thousands of dollars before sanity prevailed, and he was able to get things under some sort of control.

He told me he had long talks with several other professional punters, and they had instilled in him the need to play safe in betting, and not to give in to the emotional urge to bet on too many races.

More importantly, they impressed upon him the need to obtain 'value'. In other words, never back a horse when you cannot obtain a price you regard as better than its chance of winning. In that simple, yet vitally important, piece of advice is contained the crux of future punting success-for any punter.

The punter I have just told you about went on to become a major figure on Australian racetracks. He was a figures man. The basis of his selecting was 'weights'. He found an in-form horse possessing a weight-pull on its rivals and backed it providing the price obtainable was better than its chance of winning.

He only operated on races on which he could secure a direct, or indirect, weight line to enable him to handicap every runner in a race. If he couldn't do this, there was a doubt and he passed up the race.

This same punter was among the first in Australia to use percentages to assess acceptable odds. If a horse had one chance of getting home first, and one chance of losing, he would put it down as a 50 per cent (even money) prospect, and he would want more than evens before betting. He was, then, seeking the overlays, the horses whose price was more than their percentage chance of winning.

If he assessed a horse to be a true 6-4 chance (40 per cent), and he was able to get his money on at 5-2, he would rightly claim that, on his calculations, he had 12 per cent the best of the bet. He, in fact, liked the shorter priced overlays better than the longshot ones.

He saw it this way: If he obtained 14-1 (6.66 per cent) on a horse he had priced at 10-1 (9.09 per cent), the edge his way was less than three per cent. He didn't scoff at such a small edge but he bet biggest when he had a wider percentage advantage going for him. And that was on the shorter priced horses.

You must never ignore price in relation to chance. It means the difference between winning and losing, in the long run. In other words, never buy a horse at a wrong quote. Here's an example of how much you can be 'ripped off' if the bookmaker, or tote, offers you an underlay: You estimate a horse's true chance of winning at 2-1 (33 per cent) but the bookmakers are 'selling' him at evens (50 per cent). The edge against you is a whopping 17 per cent!

You cannot consistently tilt against an unfair percentage, so if you're in doubt about the price offered (in other words, you regard it as an underlay) then stay out. The only sensible approach is to buy at your own price, or better. The name of this game, then, is value. As with shopping, you seek bargains.

Australia's great professional punter Don Scott has lots to say about 'true odds' in his best-selling book, Winning More (which has just been reprinted).

He tells the story of English aristocrat Harry Hastings who in 1863, at age 21, inherited estates worth, by today's standards, $50 million. Five years later he was dead and the money had vanished into bookmakers' bags.

Despite all his knowledge of racing, and all his money, Hastings suffered one enormous disadvantage-he didn't know the true odds about the horses he backed. And that, says Don Scott, was his fatal flaw. He bet regardless of the odds. The bookmakers traded on this weakness and never laid him fair odds.

Says Scott: "God does not bless punters who accept under the odds. Instead of Hastings destroying the bookmakers, it was the bookmakers who destroyed Hastings. At the end of his disastrous challenge, he would realise that sheer weight of money and a sound knowledge of form are never enough. You must know the true odds about a horse's chances as well.

"Hastings started off with plenty of capital, confidence and courage, and a sound knowledge of form, class and weight. What he tragically lacked was a knowledge of value. In assessing the odds, he was a simpleton. The odds against him were so fearful he had no chance of surviving. The only survivors and winners in this punting game are those who aspire to be what Hastings never could be-a wizard of odds."

So the crux of this matter is spelled out: You MUST obtain value about the horses you bet otherwise disaster stares you in the face. Somehow, you have to work out in your own mind the price you consider is a true one about any horse you wish to back. If the price is unobtainable, then don't put your money on.

Yes, you will miss some winners. You also will miss many, many losers that you would have backed at below-value prices. In the long-term, you are giving yourself an edge by refusing to be tempted and seduced by the easy thrill of having a bet.

Of course, there are those among you who will go on disregarding all that has been said in this article, and that is only natural. If you treat your betting as a hobby, or a deserved indulgence, then you probably won't want to be buried down under the task of having to study form and produce prices based on past performance and future projection.

However, those of you who are serious about making money at your punting should seriously evaluate all that has been written here. You should also seek out more information about true odds.

Let's now examine this issue further: You have a race in which there are 10 runners. After form study, you reduce the chances to four runners. You discard the other six runners. The four you have chosen you believe all have equal chances. Each horse, then, has one chance of winning and three of losing. In percentage terms, each of the four has a 25 per cent chance, which, when converted to a price, is 3-1. You would be acting in complete opposition to your judgement were you to accept less than 31 about any of the four runners.

Remember always that bookmakers are never out to bet true odds. They'd--9-0 broke if they did. They know the old saying that if you can't beat the price then you can't beat the races.

A further example: You go to the races and have selected four horses to back in separate races, as follows:

Horse A: Estimated true price 4-1.
Horse B: Estimated true price 7-2.
Horse C: Estimated true price 5-1.
Horse D: Estimated true price 6-4.

You obtain 5-1 about Horse A and so it's a bet. Assuming you are going to bet to percentage to take out $100, you would have $20 on Horse A. Let's say it loses. You are down $20. Horse B comes up at only 7-4 and you don't back it. It loses. You've saved yourself money!

Horse C is 4-1 with the bookies, so you don't back it. It runs 2nd! More money you've avoided losing. Finally, Horse D comes up at 5-2. You bet your $40 on it. It wins. You get a return of $140.

In all, you lost $20 on Horse A, did not back Horses B and C because they were underlays, and had $40 on Horse D, a winner at 5-2, and a winner about which you achieved a 12 per cent edge. Your total stake for the day was $60, your total return $140, for a profit of $80.

Another viewpoint on obtaining true odds comes from Roger Dedman, author of the highly-successful book, Commonsense Punting (available from Mittys in Melbourne). Roger says: "It's not necessary to make an estimate of a horse's true odds-although most successful punters do, consciously or not-but you should certainly decide in advance what minimum price you are prepared to accept. That estimate will be based on all sorts of subjective decisions on your part. In practice, true odds will, be impossible to determine accurately, but they provide a convenient way of referring to your considered estimate of a horse's winning chance."

What Roger Dedman is saying is that even if you are not a dedicated form student, and can't be bothered with a mass of facts, figures and ratings, you should still have in your mind a price on a horse about which you will not go below.

Let's say you pick out a horse and you know it is in a very open race-say an Epsom or a Doncaster. You might say to yourself, well, this is a tough race but I fancy this horse a lot. Given all the other top chances in the race. it would be nice if I could get at least 6-1 about him. Anything below that wouldn't be worth the risk of the bet in such a big and talented field.

You go to the track, or your TAB, and you find the horse is paying 10-1. Okay, it's a bet. But if it was paying only 3-1 or 4-1 or 5-1 then you wouldn't back it. Why would you? You'd be paying more for the horse than it was worth.

A bit like going into a shop to buy a shirt for $40 and then giving the shop assistant $50 and forgetting to take the change!

A final word, from the late and great professional punter Eric Connolly: "No one should seriously attempt to make money from betting unless he has an understanding of betting mathematics."

By Jon Hudson