Courageous wagering pays off in action
Continuing from the September issue of our courageous wagering series, let’s use another example of win wagering with the Kelly Criterion chart by looking at a few actual races that the bettor is faced with making decisions.
Remember that the bettor is carrying the desired odds established by the handicapper, who has objectively assessed the chances for all horses in the race to win. The bettor must decide, based upon the actual wagering, which horse, if any, gets a win wager.
Our first example takes us to the first race at Running Aces on July 15, 2017. The handicapper has established the following odds line:
|POST||HORSE||HANDICAPPER'S ODDS LINE||WINNING CHANCE PERCENTAGE|
|1||PWZ Glory Be||50-1||2|
|6||Johnny Be On Time||20-1||5|
The handicapper’s total percentage is off by one point, coming in at 99 percent for the entire field’s chances. However, one point less than the 100-percent total is fine since the percentages on most odds line to winning chance percentage tables can be been rounded out to the nearest hundredth. This is not a cheat; the handicapper doesn’t play with the percentage numbers liberally—nothing more than two points less should be trusted or some odds must be adjusted to reach as near to 100 percent as possible. That, however, is the handicapper’s job (we will review handicapping tasks again when we simplify the processes in a later edition).
In actuality, the bettor doesn’t need to know a thing about how the handicapper has arrived at the numbers associated with any specific race. The bettor must decide to play or not based upon how accurate the handicapper has been by comparing it to the public’s opinions for odds. Let’s continue with the previous example by doing just that, by comparing how the public assessed the chances of that field with the handicapper’s odds line.
|1||PWZ Glory Be||13-1|
|6||Johnny Be On Time||6-1|
The bettor has only four contenders because the bettor is only interested in horses the handicapper has given odds of 6-1 or less. The bettor must watch closely for the crowd to underestimate the chances of Intrepid Arty, Marktentwentyseven, Blissfilly Fancy and Rockin Repeat. He looks at the wagering chart with them in mind; check the betting chart you should have saved from the August issue or email firstname.lastname@example.org for a $1,000-based betting chart.
The bettor sees that Intrepid Arty is going off at 5-2 and to wager he needs 7-2 or more.
The bettor sees that Marktentwentyseven is 22-1 and to wager he needs 9-1 or more.
The bettor sees that Blissfilly Fancy is 2-1 and to wager he needs 3-1 or more.
The bettor sees that Rockin Repeat is 7-2 and to wager he needs 9-2 or more.
The bettor makes his decision. The wager is Marktentwentyseven because the bettor needs 9-1 or more to wager and Marktentwentyseven is going off at 22-1.
The very core of courageous wagering is exemplified in this move. The bettor must wager upon the handicapper’s fourth choice, based solely on the value the public is missing based on the handicapper’s assessment of chances per horse. There are no ifs, ands or buts about this decision. It is the essence of truly handicapping and using the Kelly Criterion to capitalize on the possibility the public is mistaken (the bettor gets the edge) and do so within the boundaries of the bankroll.
With a $1,000 betting chart, the bettor must place $3 to win on Marktentwentyseven.
With a $5,000 betting chart, the bettor must place $15 to win on Marktentwentyseven.
With a $10,000 betting chart, the bettor must place $30 to win on Marktentwentyseven. And so on.
The bettor logs the particular wager and watches the race. We chose a winning race as our first example to empower courageous wagering, even though this case, though not rare if your handicapping is tight, is also not so common. It is important to show an extreme case to see how well the system works when it comes together so neatly. With results like this one, even though it isn’t as usual as most, the rewards buy a great deal of profit (and recoup other losses) and build confidence, as well as you can see the Kelly Criterion protects the bankroll.
Marktentwentyseven won and paid $46.60. Do the math per bankroll size for larger returns. You will see that the percentage of profit remains the same and so does the risk to the bankroll based on the “Kelly” way. Next, we look at losses and problems.
by Frank Cotolo
To see more from the October 2017 issue of Hoof Beats, click here.