Acceptable ROI?

[jackad]

What do you consider an acceptable long-term ROI? More than 10 cents on the dollar? More than 20 cents? 30 cents? 40 cents?
Is that your ROI or do you aim higher?
Jack

[Bernie]

I think that depends greatly on one's W%. W% equates to volatility. In economic theory, the more volatility(risk) there is, the more you should be rewarded for bearing that risk, assuming we are rational (are we horseplayers rational?) There are even formulas that give required rates of return for different opportunities given their amounts of risk compared to a risk free investment in say treasury bills. For example, a 50% win rate should require a 15% ROI. The required ROI rises fairly sharply as the W% drops. This kind of analysis assumes that W% will hold up in the long run (a tenuous assumption) and that horseplayers are normal, risk averse persons (an even more tenuous assumption!) :)

[Carl]

I still don't get "where all the money is coming from". Like who is fueling the mutuel pools?

For for every player that breaks even two guys have to lose 50% more than the track take, and for every player who wins 10% of every dollar they bet three players have to lose more than 50% of the track take.

And I can't even find any posters anywhere that even lose anything close to the track take. More so, they are almost all winners. So..... what gives?

If a player bets 30 times a month, and can show a average of 20% profit on his bets, he can be richer than Bill Gates in 18 months thanks to the "miracle of compond interest." And please let's not go into pool size, anybody can indeed go off shore out of pools and make a killing. Go from offshore book to offshore book, happily breaking them all.

And still the offshore's florish. What gives? Is it possible that the odds we as a group of horseplayers set actually approximate a horse chances of winning? Gee, if so, then what? Humm......

As for me, I wish I were doing better, but I have been mucking around now for 18 months with the same money moved around from account to account since my last deposit in February of 2000. So while I am certainly not contributing to all these "winning players for whom less than ____ROI is not acceptable", I am not in Bill Gates Country either.

I personally think we are in an "evolve or die" gambling enviroment, with more than a touch of BS thrown in. And who would have it any other way?

later,
Carl

[ERNIE2]

Could you be looking at the wrong end of the stick? or maybe looking in the closet where the stick is kept ? First the old Will Rodgers saying of "belive only half you read and none of what you hear" may apply(this post and anything I tell you included). facts are that "someone will win,that is be paid back 85 cents for every dollar that is put in the win pool at most tracks in every race every day and most exacta pools return 80 +- cents on the dollar........I haven't ever worried about where this money is comming from......but have sat up nights trying to figure out how to get as much of it as I can "without risking more than I can afford to lose" as it is said some times I'm fast but most of the time I'm about half-fast at the winning part. I am impressed that maybe it has been to long since you were at the track ......most of the time I have a full time job just to keep everyone from telling me how they missed that last trifecta or exacta just as bad is having them explaining how they hit it.......but there are more "I just missed" stories in Northern California than hits.......
Of all the studies and ink that has been printed about gambling and about 25 years hanging around racetracks I have yet to have anyone doing a study to ask me the first question, so I'm inclined to disbelive most of what I read........20% of trainers win 80% of the races.......20% of the races can't be handicapped even after the race.....I tend to think 20% is a little low some days......... I do know that I "churn" a lot of money thru the windows, some days I'm ahead a little some days I lose some.....and looking at my betting records I seem to be doing the same thing every day( once it was suggested that maybe I wasn't keeping the right records, don't know......)
Don't think horse racing and gambling is as bad as say the electorial system......ever notice that the only bumper stickers you see 3 months after an election are the ones for the guy that won........If I ask around today wonder how many voters I could find that would admit that they voted for the loser.....What was his name ?????? :p ;) :p
Got to get ready to run/print the races for today.......Ernie

[hurrikane]

It's a tough nut to crack Carl, especially when they take a chunk right off the top. I think you will find that the people that post, the people that use a computer..heck..just the people that can read a racing form are a small percentage of the players.

I have one aquaintence that doesn't use a form, sheet, computer, nothing..just the tote board...if I could just win what he loses every week I'd be happy. Funny thing is he is ready at the drop of a hat to tell you how much he bets and how much he wins..not so eager to tell you how much he loses, it is a lot.

This is where the all the money comes from..and god bless them one and all!:cool:

[jackad]

So acording to Bernie, if my win frequency is 50%, I've got to be making 15% or it's not worth the risk. If my win frequency is less than 50%, my ROI has to be more than 15% or I'm a shnook for betting at all. Anyone here maintain a 50% win frequency over the long-term?

So does everyone win some and lose more and considers an acceptable ROI to be just anything better than break even?

[George]

Jackad,
I spent 36 out of 43 years of horse playing on the negative side of roi, so am happy with any positive roi number for the year :)

I currently run two approaches (and bankrolls) one of which averages 55% wins with a sustained 8% roi. Agree with Bernie the risk/reward on that is not good but seems the best I can do.

My other series averages 18.5% wins with 35% roi. Have periods of time where roi is higher but it always gravitates back to 35%. Again that is not a great ratio but all I can get.

I continue to play both series because can't mentally deal with the long losing streaks on the high return plays. The high win percent on the other plays keeps me confident and able to weather the losing streaks.

Over time have began to wager more aggressively on the longshots and a little less on the chalk.

[jackad]

George,
Thanks for the candid feedback. It gives me some idea of realistic targets to aim for. BTW, I think a 35% ROI is great (I would happily settle for a consistent 20%). Handling the losing streaks is tough though.
Jack