“Everyone has a game plan until they get punched in the mouth”- Mike Tyson
Last week I introduced the concept of playing the horses with a “long run” mentality. In theory, this mentality will increase our chances for bankroll success as we navigate the ups and downs of this sometimes volatile game. But what does the “long run” really mean? And what is a bankroll?
The long run could be the length of the Canterbury live meet. It could be a calendar year. It could be a longer period of time ending in the distant future. But when I talk about the long run in an arbitrary way, I’m referring to the period of time it takes to make 1,000 plays. This is a reasonable sample size that will allow an honest evaluation of the results. Over this number of plays, the “chaos factor” on the track should even out, and the final bankroll total should be the inherent “truth” of the success or struggle of the original game plan. If the bankroll is still intact after 1,000 plays, that’s a very good sign that staying with the current plan is the correct decision going forward. What we want to avoid is that dreaded term called “tapping out”, which means our bankroll has reached $0.00 before we have given the long run a chance to play out.
When I use the term “bankroll”, I’m referring to how much money one is willing to put at risk over the defined “long run” period of time. A good start towards bankroll preservation is to determine the optimal wagering amount for each play based on that bankroll. And while complicated formulas have been developed to determine optimal wagering amounts based on the perceived edge, I’m a proponent of the simple idea of wagering 1% of your starting bankroll for the entirety of the 1,000 play sequence. Persuasive arguments can be made that some plays are stronger than others and therefore wagering sizes should vary, but I like the simplicity of this rule. Bet the same amount every time, for all 1,000 plays. For advanced players, keeping separate bankrolls for different types of plays may be warranted.
For example, if you have a bankroll of $1,000 dollars, then your wager would be 1% of $1,000, or $10 dollars per play. Doing the math, you can see that in a 1,000 play sequence you will be wagering $10,000 dollars, or ten times your starting bankroll. If you can turn your bankroll over ten times without “tapping out”, you have guaranteed that your return on investment (ROI) will be no worse than $0.90 cents on the dollar ($10,000 wagered – $9,000 returned if your final bet puts your bankroll at $0.00) which is a good starting point towards profitability in future trials.
These concepts are math intensive, but they are important to understand when developing strategies for long run success. Following a sound game plan is one important aspect of long run success, and wagering the proper amount relative to your total bankroll goes hand in hand with that.
Next week I will explore the concept of game plan development. Continued success at the windows!
The Oracle
