Do you have an investment plan for your betting? If you're like most punters, then the answer is no. It is something you should think about seriously.
There are a number of avenues you can follow. One vital point is to try to set yourself a target to aim at. Some years back, a punter wrote to my colleagues Damien Whitchurch, Martin Dowling and Jon Hudson and asked them how to set about becoming a professional punter with a bank of $20,000.
Damien recalls advising him along these lines: "That's a lot of money by any standards but it isn't enough to make him a professional. I advise you to invest on the track, part-time, carefully over five years, and in that time to try to make a profit on turnover of 16 per cent.
"That will mean a first year profit of $8000, or 40 per cent of the original bank, as I assume that you will turn over the $20,000 2.5 times in the first year, making $8000.
"Not a lot, maybe, but a significant $160 a week while keeping your day job, so to speak." He then assumed a turnover of 2.5 times of the bank each year, and worked in round figures for simplicity and convenience. We envisaged a gradual increase, until in five years at that average of 16 per cent on turnover, it would turn the $20,000 into $28,000, then $40,000, then $56,000, then $78,000 and then $110,000.
That may have been optimistic but it is what Damien said was necessary: $100,000 plus, as a starter for a professional who wants the Merc and the penthouse!
Martin Dowling did beg to disagree, partly anyway. He felt that the 16 per cent seemed too high and that maybe a slower progression was called for. All three did agree, though, that just establishing yourself in a professional capacity as a bettor would take something in the region of $7,500, which would include the cost of a computer setup and a service from, say, the brilliant Rating Bureau in Sydney.
Another young punter wrote in some time back, seeking advice from Martin Dowling on betting 'big' on doubles. He wanted to know Martin's thoughts on making money annually from doubles betting.
Says Martin: "I advised him that because of the high risk involved I would not be satisfied with small returns. I would want odds of 9/2, because I estimate a strike of one in every 3.5 bets.
"Not one in every four. The lesser figure gives me my edge. I assume that I will crack a double that pays over 9/2 every 3.5 times I bet. This means that if I have 700 doubles in a year I am looking for a return of at least 5.5 x 700 divided by 3.5.
"This comes down to 5.5 x 200 (doubles), or $1100 for my outlay of $700. The return is therefore, as will be obvious after you run it through a calculator, 57 per cent on outlay (or turnover) for the year. This is a pretty large figure, but it's what I go for.
"The overall double must pay off at the rate of 9/2. Let us assume that I bet $500 on the double. I aim to win $2750 on its success. That represents 9/2. The double may pay 40/1 but it is the overall figure that is the only relevant one. If you outlay $24 on a 4-horse trifecta that wins and pays $2400, you have received 99/1 on your money, not 2399/1.
"If I therefore outlay $500 on various combinations of a double and it pays $90 and I have 30 $1 units on the winning combination, I make my $2230 (9/2, give or take a few dollars). My odds, as I say, are 9/2, not 25/1.
"I like to think I can make this kind of edge work for me on the double because there is a lot of what I call 'stupid money' in the pools and the value is there."
Most professional punters will, I believe, advise you that a start-off bank needs to be FIFTY times the average stake of a single bet.
Clive Holt, author of the bestseller Winners Back Winners, says: "Making adequate capital provision at the outset is very important. It's like any other business in many respects and has the best chance of success if properly funded.
"A lot of new businesses go bust within the first few years of trading and, amazingly, only two out of every 100 will still be trading after 10 years. Betting as a business is really no different from any other, save that you lay your money out for a profitable return of money, instead of charging for your time or buying and selling goods at a profit.
"It requires the same base foundation in capital and the necessary commitment and determination to succeed. Take my advice, give yourself the best possible chance of success by setting aside a betting bank to use solely for betting."
Holt has his own personal betting table and says it has served him well. It is explained in his book (Fineform Racing Publications, 23 West Street, Morecambe, Lancs, LA3, 1RB, UK).
If we assume that you are a small bettor with, say, a $1000 bank, then it's my belief that you have to begin by betting around 1 or 2 per cent of your bank, using a level stakes approach.
That means, at 2 per cent, bets of $20. But to be able to put yourself in the position to make some 'fairly serious' money you have to be prepared to increase the size of the level stakes bets.
One way is to add all winnings to the bank and every extra $100 you are ahead you increase the bet, always, though, betting 2 per cent.
The following is how it would go:
$1000 $20 $1100 $22 $1200 $24 $1300 $26 $1400 $28 $1500 $30.
You can see how steadily your bets can build up. If you wanted to be more aggressive you could switch to 3 per cent of bank bets once the $1600 level was achieved. This would then call for a level stake bet of $48.
When do you declare a profit and remove it from the bank? Whenever you wish! It's always in your court as to how you proceed.
You may feel that when you have reached $1500 that you can take out the profit, and begin all over again. After all, you have to declare some divvie for yourself at some time or other - particularly if you need the money!
How conservatively or how aggressively you bet is a personal thing. Some people are risk takers, others are not. Some can handle losses with a smile, others become angry or dispirited.
THE GOLDEN RULES
- Get yourself a sizeable bank. Make sure it is one with which you feel comfortable. Don't risk money you cannot afford.
- Decide on a staking plan. Nothing too risky, nothing stupidly cautious. Once you have the plan, Stick to it.
- Set goals for yourself Decide when to take a profit.
- Never bet more than a few per cent of your total bank.
- If you increase your stakes, do it steadily not madly.
- Find yourself a sensible selection strategy. No money management plan can succeed without winners.
By Mick Collins
PRACTICAL PUNTING - JUNE 1996