In the fifth article in this series, US professional Barry Meadow and PPM editor Brian Blackwell discuss various aspects of the task of picking winners and backing them.

The topics range over most handicapping factors. In this month's article, Barry and Brian talk in depth about staking and maintaining lists of horses to follow.

Brian (BB): Last month we began to look at the whole spectrum of staking, money management, that sort of thing. An essential aspect of the entire racing game, and one that many punters never really master. A bit like real life on the domestic front for many people; they can earn the money but can't invest it wisely. In horse-racing, the equivalent is that you can pick the winners, but can you back them?

Barry (BM): Proper money management, a wise guy once explained, is betting the maximum on your winners and the minimum on your losers.

It is possible to be the best handicapper in the universe and still lose money if you don't handle your cash correctly.

The example is the man who hits 99 per cent winners but unfortunately bets 100 per cent of his capital on every play. As soon as he misses, he's broke. I think four items of advice summarise the matter:

  1. Keep records of all bets and expenses.
  2. Do not overbet in relation to your bankroll.
  3. Bet more when the value is greater.
  4. Bet within your emotional threshold.

BB: Perhaps an important point following on from these issues is the problem of losing runs. No matter how long a person has been a punter, I think we all get surprised by how long a losing run can last. Sometimes it seems they will never end.

BM: Even when you play the game with an advantage (and a pro bettor may realistically expect to win 8 to 10 per cent on each invested dollar), your losing streaks will astonish you. Playing five races a day, five times a week, it's no big deal to lose for months at a time. Anyone who tells you different is lying. Let's say a place betting method hits 49 per cent winners at a $4.20 average mutual ($2 units) for a 2.9 per cent return on investment.

The standard deviation for 100 races is 5 (calculated by taking the square root of 100 x .49 x .51). Your totals will fall within one standard deviation 68 per cent of the time (44-54 wins), within two 95 per cent of the time (39-59 wins), and within three nearly 100 per cent of the time (34-64).

For a 10,000-race series, your expected profit for $2 bets is $580. But your standard deviation is 50 wins. That means that instead of hitting the expected 4900 wins out of 10,000 bets, three standard deviations could place you as low as 4750, which would turn you into a net loser.

Punters should consider this profound and horrifying truth: You can be a winning player, with an edge on every wager, and bet on 10,000 races only to wind up behind.

BB: Now, Barry, many punters cannot comprehend 10,000 bets. I've spoken to many of them about this and they tend to scoff at the stories of the line of ruin and so on because they don't believe in examining 10,000, 20,000 or whatever number of bets. The bloke who has a couple of win bets a week will have only a 100 or so bets a year.

BM: Yes, but you need long, long workouts of betting results before you can develop correct strategies. And the lower your win percentage, the longer workouts you need.

Take a trifecta result in which you play one $2 ticket on 120 trifectas and hit six at an average mutual of $52. With a healthy 30 per cent profit margin, things look promising.

Moving along to a 500-race series, the standard deviation is 4.87 (the square root of the total 500 x .05 x .95). That means while on average you'd hit 25 trifectas, hitting only 10 out of 500 is within the three standard deviations range, and that would mean a nearly 50 per cent loss.

BB: It IS a tough game, isn't it, but people are beating it. I feel I have a somewhat rudimentary approach in that I am very much an instinct bettor, spur of the moment, rushes of blood, etc., though I do try to bet a small percentage of my bank overall. All in all, I think we can say that you can't beat a race but you can beat the races! That's if you bet only overlays and those overlays are true overlays.

BM: Losers think of selecting the winner and beating a race. Professionals think of betting for value and beating the races. I think we should run over some of the more common betting falsehoods to put things into perspective.

  1. Alter your bet size based on your last result.
  2. Bet your top pick but only at 2 / 1 or higher.
  3. Don't bet for a place, except savers.
  4. Don't bet two horses in the one race.
  5. Box your exactas.
  6. A real pro bets only one or two races a day.
  7. Don't mess with trifectas.
  8. A clever staking plan turns flatbet losses into profits.

All these beliefs are wrong.

BB: Yet a lot of punters will swear by them. Especially altering the size of bets after the last result. This is put forward in many staking plans, isn't it?

BM: It includes any plan to raise or lower your bet after a win, or a loss. Among this group:

"Bet more when you're winning because you are playing with the track's money", or "Raise your bet after a loss because you're due to win", or "Bet a constant percentage of your bankroll".

Now, you never know whether your next bet, or series, is going to win or lose. Bet size depends on your win percentage and advantage, not on whether you hammered the double.

BB: I'm interested in what you have to say about betting the top pick but only at 2/1 or higher. I know a couple of chaps who have followed this approach and they seem to have done okay.

BM: This fallacy fails to consider what chance you give your top pick in a particular race. All top choices are not equal. Not long ago I reviewed some statistics for four harness racing meetings and found that my first choice won 38 per cent of the time. But while horses I made evens or below won 53 per cent of their starts, those I made exactly 2 / 1 won only 28 per cent and it was from this group that most of the higher-priced horses came.

BB: Many punters will take a saver bet, for win or place. Are they doing the wrong thing in your opinion?

BM: There is no such thing as insurance. Every bet either wins or loses on its own merit. If a horse offers value to place, then play it, regardless of whether you bet it to win. As for not betting two horses in the one race . . . You wouldn't think of betting only one $2 bet in the trifecta or exacta, so why restrict yourself on the win end?

You must, however, deduct the cost of the losing bet from your determination about whether a race offers value. If you do bet two in a race, stick with those going off at 3/1 or higher. Otherwise, if you back two horses at 2 / 1 for example, you stand to collect $6 for a $4 bet and if you ordinarily don't take below evens for one horse, then don't do it for two.

BB: I was very interested in your listing of the fallacy real professionals only bet one or two races a day. Those I know will bet many, many times in the course of a day, depending on whether they reckon they have an edge. They see no sense in restricting bets. I have to say, though, that I do know professionals who pick out one bet for the day and plonk the lot on it and, win or lose, that's it for the day.

BM: I don't know any professionals who bet every race, but most play whenever they feel they have an edge, and that may be as often as six or seven times per card.

The edge might be a single exacta overlay on their second and third choices, or a place bet, or a daily double with the first-race favourite. But while a pro may make one or two prime bets a day, he rarely sits on his hands the rest of the time.

BB: Let's talk about win betting, because this for most punters is the crux of the whole game. Do we bet level stakes, do we chance our arm in another way, can we sex-up the win betting and get away from level stakes?

BM: Don't play a horse unless you've made it 6/1 or below on your personal odds line. One reason for this is that as your odds assignments go UP, the chance of making a mistake increases. For example, if you made a horse a 15 / 1 chance instead of 25/1 (a mere 2 point error out of 100 on the odds pie), you might bet 23/1 shots that are underlays rather than overlays.

Secondly, once you get too far down the line and start betting fifth and sixth choices, you may wind up putting too much of your capital on horses you don't like very much.

BB: My personal view is that if you have a bank, you should never bet more than 5 per cent of it at any one time. This is a mantra for those punters who like to stick to a rigid like staking approach. Others like a looser framework. This percentage of bank applies, 1 suggest, no matter what approach you are using.

BM: The game is always about best odds. But unless a horse is at least 50 PER CENT HIGHER than your personal odds assessment, don't bet. Never play odds-on horses unless you've made them 2 / 5 or less on your line and they go off at 4/5; such a play might come up twice a meeting.

Assuming your odds line is accurate, the 50 per cent requirement theoretically ensures at least a 22 per cent edge on every bet (a 4/5 shot going off at 6/5 yields 22.2 per cent, while a 9 / 2 shot going off at 7/1 yields 45.5 per cent).

But as we sadly discover, underlay’s always outperform overlays, thus the 50 per cent bonus demand. If your even-money overlays win just 42 per cent of the time at a payoff of $5 (for $2 units), you'll still maintain a 5 per cent edge, enough to succeed. And sometimes your evens shots will pay $5.40 or $6.

Once you've eliminated a horse by lining him out, don't bet him to win even if he winds up an overlay. Example: You line a horse out but still make him 6/1 on your odds line and he goes off at 9/1 ... pass him. Restrict your bets to your contenders.

BB: We hear talk about what some call the free-lunch factor in overlay betting, Barry, and I see you talk about it in your wonderful book Money Secrets At The Racetrack. Tell us more about this.

BM: When you decide a horse is an overlay, you are pitting your judgement against that of the public, and fans are not all oafs. If you rate a horse a 2/5 chance but the public makes him 7 / 2, you have probably over-estimated the horse.

Your overlays will usually come from lesser mistakes, that the public has failed to recognise a crucial negative trainer change, overrated a pacer's recent suck along fast mile, or overlooked a greyhound's three-week layoff, etc. These errors cause the prices of the other entrants to drift upwards.

BB: Let's switch tack now for a chat about another hot topic, and one that interests me a lot because I fancy you and I will agree to disagree. I'm talking about lists of horses to follow. I'm a great fan of them and, used with some discretion and good sense, I think they can be highly valuable. But you are known to have put up a differing view about them.

BM: If everybody else with a formguide, or a TV replay, can spot the reasons for a Horses to Follow listing, why compile a list at all? Most listed horses are put in because they've recently run fast races or they've had trouble.

The horse who's run fast will wind up with a high rating and pay zero next time, and trouble horses not only are bad news, they are a gambling catastrophe.

One of the revealing surveys in Michael Nunamaker's book Modern Impact Values centred on horses with trouble lines. Nunamaker recorded the results from betting 1384 horses whose last-start form said "BLOCKED", or "BUMPED" or "CHECKED", the very horses likely to appear in Horses to Follow lists.

Betting them all next time out, you would have lost in excess of 35 per cent of your money. Troubled runners equal trouble for your wallet because players tend to overbet these horses at their next start.

BB: I guess my point is that we don't blindly bet the horses to follow listings next start but we do use them as a starting point, and examine their prospects in detail. I know from experience that much depends on the astuteness or stupidity of the horse's connections.

I've often seen a horse run a slashing race in a Class I and I've put him on my list, but the very next start his stable has entered him in a Class 6, or some higher-class race, in which he basically has no chance.

This is where we need to examine all the listings we make and not just fall into them next start.

BM: A real problem is that if you've spotted a horse striking trouble then just about everyone else will, too. I watch video tapes every night, and occasionally I'll see a horse who was in 8th and was making a tiny move when he got blocked. My own private future goldmine? Sorry, his name soon appears everywhere.

As a handicapper, you are never Magellan. You will probably never make a discovery that hasn't been noted and evaluated by your competitors.

NEXT MONTH: More views and advice from Barry and Brian as they continue their discussions on the fundamentals of handicapping and betting. We'll take a look at Barry's special value betting charts and see what he has to say about trifecta betting.

Meantime, check out Barry's website at

Click here to read Part 6.
Click here to read Part 1.
Click here to read Part 2.
Click here to read Part 3.
Click here to read Part 4.

By Barry Meadow and Brian Blackwell