Turning Pro – Harder Than It Looks

 

Two months ago I began playing professionally. I thought you would be interested to know how it is going thus far.

First, many of you have assumed that I have been playing every day for years. That is not true. Most of my play has been via a wagering partnership where I support the software and my partner handled the wagering end. The partnership play (and the resulting income) has slowed from a small river several years ago to a small stream, and in the last couple of years, to not even a dribble. We have talked about “turning pro” ourselves and moving more of our resources — that means time to me — to the playing arena.

We primed ourselves for several months, testing our system, fine tuning all the facets of it. We even produced a product and a seminar around The System. (Please note that this is not a sales pitch. No place in this email will you be asked to purchase anything.) In early October we began play with real money.

I was amazed at how much pressure I felt playing for the first time with the absolute necessity of winning. It certainly was not the money, as the wager size was not that much. Initially, around $30-$40 per race. It was the fact that winning mattered. I guess you could say that I am a person that does not “lose well.” I don’t mean that I get angry and throw chairs. That is not my style. I mean that I take winning (and losing) so seriously that it nags at me if I had a bad day.

As it turned out, I actually won the first 10 consecutive days that I played. These were relatively short days because I found the intensity of the battle absolutely fatiguing. The first day I was literally exhausted after about 2 hours. By the tenth day I had strengthened myself to last about 4-5 hours.

Now, I know that some of you are scratching you heads and saying, “What is he talking about? I love playing! I could play all day, every day and never get worn out!”

I assure you that playing with the expectation that you MUST WIN is very different. There is an intensity that comes with it. Consider a Major League baseball player or a PGA golfer. There was a time when the young golfer just loved to go hit balls and putt his way around those 18 holes, then went to bed dreaming of his next day on the course. Just imagine that how different it is for a money player. Sure, they still enjoy their sport and love being a golfer – and probably wouldn’t trade it for anything else – but it does become a DIFFERENT THING. It becomes a thing of GREAT IMPORTANCE.

There is also the humiliation factor when one has a bad day publicly. The world expects the professional to play well every day. And so does the player.

This is why I call playing “Entering the Pit.”

You suit up in your armor, pick up your sword and shield, and prepare to kill or be killed. Once you get the confidence that you are going to win long term, the entire process is one that you look forward to, but, at the end of your daily time IN THE PIT you are worn out from the battle.

I experienced similar when I played blackjack professionally over 30 years ago.

Eventually, I got myself on a Thursday-through-Sunday playing schedule. (Now that winter is upon us, I have shortened it to Friday-Sunday.)

The first 10 days went great, with 4 large wins, 3 small wins and 3 wins that were barely break even. This was considered a testing phase for me.

Then I stepped up the wagering. Guess what happened on day 11? LOL – Of course. My first losing day. And it was a big one, causing me to blow back half the profits I made from the previous 10 winners.

I am a “session” player. That is, I take a part of my total bankroll and decide on a goal. In this case, the session was only $750 and my goal was to triple it. That is, my goal was to play until the $750 became $2,250 or went away completely. When a session ends, whether from winning or losing, I put the session money plus profit back into the BR and reassess. Then I choose the size and goal for the next session and the entire process starts again.

The Play-By-Play
Day One had me down about $300. Fortunately, Day Two was kind to me and the BR recovered to just over $1,000. Days Three and Four were also kind, and by Day 6 (counting the rebates) I was just $32 shy of winning the entire session. It was a great way to end my week, as well.

By the way, on the topic of rebates, I do not count them in my session, unless I need to in order to put me over the top. Generally, I just leave the rebates as “extra money,” to be counted or directly withdrawn whenever necessary.

As my play continued, it actually took me 4 more days to push past that last $32. Those 4 more days were all about breaking even, but eventually I broke through, winning the session outright (i.e. no rebate money necessary).

After winning session #1, I reassessed and upped the session size to $1,000, with the target to triple again (i.e. win $2,000). Currently I am around $600 winner towards that goal, but like session #1, it started rough; at one point I was down almost $450.

At the rate I am winning, it will be several months before I will be able to withdraw “significant” money from my account. I guess I will need some patience.

Stay tuned for more of this ongoing story.

Handicapping Live – 0003 July 11, 2013

 How often do horses below 7/2 Win?

Handicapping System: Claiming Sprints N2L

Exacta Betting: Using a Tiered Approach (Part 1)

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Strategy vs. Tactics for the Horse Handicapper

This post began as a topic on The Horse Handicapping Authority Facebook page. Alan Horvath, a very accomplished handicapper that I follow on FB, asked this question:

Alan Horvath
Race tactics vs. long-term wagering strategy: Which is more important?

I gather it depends on who we’re talking about. For example, a guy who goes to the track once a year, it would be tactics (although it would help if he walked in with a strategy too).

Or, does it go deeper than that? Is one prone to eventual failure, no matter how strong their tactics, if they do not have a long-term wagering strategy?

Dave Schwartz
That is a great topic for conversation, Alan. I think it has to begin with an understanding of the difference between “strategy” and “tactics.”

Wikipedia says:

“Strategy is also about attaining and maintaining a position of advantage over adversaries through the successive exploitation of known or emergent possibilities rather than committing to any specific fixed plan designed at the outset.”

http://en.wikipedia.org/wiki/Strategy

 “A tactic is a conceptual action implemented as one or more specific tasks. The term is common in business and military usage, as well as in chess, sports, and protests.”

http://en.wikipedia.org/wiki/Tactic_(method)

 

So, “Strategy” could be described as the PLAN OF ACTION to achieve a particular goal and “Tactics” are the EXPEDIENT ACTIONS we take towards achieving that goal.

In other words, STRATEGY is looking at the map while driving from San Francisco to New York, and TACTICS are figuring out how to get through (or around) Chicago.

 

STRATEGY is about the long-term goal – it is the WHAT.

TACTICS are the HOW.

 

STRATEGY is about LONG-TERM.

TACTICS are about today.

 

STRATEGY is about the management and growth of my bankroll.

TACTICS are about how I bet this race.

 

Alan Horvath
Then, it sounds like strategy is just as important for the casual player. It’s just relative. For them, the long-term wagering strategy would cover X amount of races (or perhaps 10 hours, etc).

 

Dave Schwartz
I think it goes deeper than that. The “casual player” has no STRATEGY. Each day exists as a stand-alone entry in his life. He only has TACTICS.

 That is, he plays his races, his goal is to have a good time and maybe make some money.

 That is far different than the player with a long-term goal.

How Much Must You Bet to Play Professionally?

This is a question from our The Horse Handicapping Authority Facebook Page.

Shawn asks: “How much do you have to bet per race if $30.00 is hobbyist? What does it take to do it for a living?”

Let’s work through the math.

Let’s say that you are wagering $30 per race and you do that 5 times per card and you play 4 tracks. That is 20 races per day times $30 per race = $600. Let’s say that you are earning a 6% profit, after rebate. That makes your net for a full day $36, or about $4.50 per hour (for an 8-hr day).

Of course, if you spent 3 hours the night before preparing for the next day, then you have invested 11 hours and are now at $3.27 per hour.

What is a “fair” hourly return for a “professional” handicapper?

Let’s say that a fair hourly return for a “professional” handicapper is $75 per hour. Therefore, considering the 11-hour day we described above, that would mean he would need to make $825. If we divide by 6% (the anticipated ROI) we find that he needs to wager $16,500 per day.

Continuing further, at 20 bets per day, that places him at $825 per race, a very aggressive sum to invest.

This quickly becomes a case of “Do we raise the bridge or lower the river?” If that per-race figure is high (which it is for most players, including me) then we need to find a way to play more races.

Suppose the handicapper was to play twice as many races? First, he’d have to find a way to cut his handicapping time per race in half. But he would still need to bet over $400 per race.

You get the idea. This is why most would-be “career” players do not want to look at these numbers. This is also why paper-and-pencil handicapping is very difficult to make significant money: how do you cut the handicapping time down to (say) 5 minutes per race so that you can handicap between races (and completely remove the night before work)?

Many of our software users routinely play around 80 races per day (or even more). Those who have seen me play know that I am like a machine gun: one race after another; bang, bang, bang. (Or is that rat-a-tat-tat?)

But look at the difference if one CAN make 80 bets per day. Betting $16,500 / 80 is “just” $206 per race. I am not saying that is an insignificant amount, but it is an amount that is reachable by “humans.”

Further imagine that a with this number of plays your consistency goes up quite a bit. Based upon a 4-day work week, now you make as many plays in a day as you did in a week. This also allows you to wager a greater percentage of your bankroll, which allows you to grow faster (to get to that $200 level).

 

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Handicapping Live will return next Thursday, July 25th, 2013 at 8:30pm (eastern).

 

Which races hold the most value for me?

As always, this week’s show addresses several important issues faced by every handicapper.

“Which Speed Rating is Best?” is a common question. There is a poll for that question. Click here to see what the public thinks. Watch the show to get a better answer.

 In “Elim Pct: Deciding if this race is worth a play,” we answer that question with a new, easy-to-apply metric.

“Jockey: What Impact Does the Jockey Have on the Race?” will make it perfectly clear whether it is better to play the top jocks or reach lower in the pile.

 

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Percentages & Probabilities Special

Becoming a Type 4 Handicapper

Each week I receive many comments from handicappers all over the country who are having difficulties finding the path to their success. Recently, I spent some time looking back on some of these e-mails. In reading them I found that many of their struggles were similar to what I have experienced in my  quest for horse racing success.

I’m going back several years here, but the memories are still fresh. I knew where I wanted to get to, but I didn’t know exactly what to do to get there. As a result I struggled and was frustrated, but what kept me going every day was my long-term vision of where I wanted to be.

My long-term vision inspired me to take action when I felt frustration, fear and confusion. If I could have shared this letter with the “me of years ago,” I know it would have given me the direction I needed. I hope it does the same for you.

The Letter

Dear Handicapper,

I am not exactly sure what your specific goal is as a horseplayer. It really doesn’t matter whether you want to play on a professional level or just beat the game more frequently than you do now. What does matter is that winning at the races has a significant level of importance in your life. I appreciate your enthusiasm and ambition.

I have a couple of questions to ask you and, based on the answers, some advice on what to do next.

First, how well is your current method working for you? Is it accomplishing your horse racing goals?

If you answered, “Yes,” to this question, then you are on your way to success (if you have not already succeeded).

If you answered, “No,” to this question, then I will ask a second question:

How long have you been playing your current approach?

My experience is that the great majority of horseplayers practice what I call the “system du jour” method. That is, they try a system, playing it until they are convinced it doesn’t work, which is easily measured by the reduction in their wagering account. Then they may move on to another system, and another one after that, and another, and another.

Through the course of a year they may play their way through six or seven different approaches. Once they have exhausted all the systems they know of, and are at a loss for what to do next, they cycle back to the top of the list, playing a system they played in the past. The end result, of course, is the same: another losing year. Worse still is the frustration that comes with this process.

Now, don’t get me wrong. It is okay to change your mind; it is okay to switch away from a losing methodology. The problem is that there are no out-of-the-box winning methodologies to be found! This includes all of my products and my software as well!

That’s right! Even my stuff behaves according to the same set of rules. So, why would you buy something that doesn’t work?

First, I didn’t say it didn’t work. I said that you do not simply take it out of the box, go to the window, and expect to make profit forever, never looking back. That is simply an unrealistic expectation.

The Horseplayer Next-Door

Imagine there is a successful horseplayer who lives next door to you. He makes his living at the races, lives very well, and seems to have all that he needs. You wish you could do what he does.

You decide to approach your neighbor to ask for help in your personal quest for profit at the races. You tell him what you want to do and ask for his help. He offers to spend a full Saturday afternoon with you explaining what he does. You schedule the following Saturday to spend with him, fully immersed in learning how to win.

Think about this for a moment. What is your true expectation here? Do you truly expect that the following Saturday you will suddenly become profitable forever? Do you truly expect that one four-hour session is all you need?

Even if your neighbor could transfer sufficient knowledge to you in just four hours, is it realistic to expect that he would be willing to simply hand over the results of his years of hard work and learning just like that?

Your neighbor’s intentions are good and you will benefit from what he teaches you. However, you probably have more to learn than can be taught in a four-hour session.

The way I see it, you should view this four-hour class as a starting point. Consider it a roadmap to where you want to go, where the direction, as well as the first part of the journey, has been plotted for you. Ultimately, you must complete the journey yourself.

The Roadmap: Part Two

So now you have completed your Saturday afternoon appointment. You have directions to get you started and the first few waypoints on the map have been marked.

If you are the typical player, you have your next system du jour. After a couple of weeks of play, you cannot help but notice that you are still losing. “But I’m doing it just like he told me to do!”

If this were a true story, it would have several potential endings:

  1. The handicapper says, “This system does not work. My neighbor must be lying.”
  2. The handicapper says, “This system does not work. My neighbor didn’t tell me everything.”
  3. The handicapper says, “This system does not work. I have to look for another one that does.”
  4. The handicapper says, “This system does not work, but I perhaps I can make it work.”

Which of the above responses would you choose?

I doubt there is a single person reading this message who would admit to either of the first two responses, although clearly there are people who think that way. (I have the e-mails to prove it.)

The majority of horseplayers I have met would fall into response number three. The system did not show profit, therefore it is of no use to this handicapper, and the search for the Holy Grail continues.

Becoming a Type 4 Handicapper

So, we finally get to the point of this message.

I have taking you down this path because… Well, think of it as four hours on a Saturday afternoon to address the question you have asked many times over: “How do I become a winning player?”

The best single answer I can give you can be summed up as a single phrase:

Continuity of Action

Winning at the races is the end result of many small, incremental improvements. Sometimes a single improvement may result in a huge difference to the bottom line. In such a case, it may appear that the ultimate success was the result of this single change when, in reality, it was all of the changes compounded upon one another that produced the success. It gives credence to the following quote:

“It took me 30 years to become an overnight success.”

Look back at the four responses again. The first three indicate a lack of willingness to do the necessary work to become profitable. At least the third one indicates a willingness to do something. Unfortunately, it is the wrong thing.

Since I am using so many metaphors in this message, I would liken the third response to prospecting for gold by walking through the desert, head bent downward, hoping to find a pile of gold. One could walk around like that for years and never discover a gold mine, although it is possible that you might stub your toe on a nugget now and then.  The only way to find gold in the desert is to dig for it.

Conclusion

Pick a method. Maybe the one you are working on now, or maybe one from the past that you thought had promise. If you have no idea, where to begin, the next part of this message may provide the answer.

Take this method and commit to making it work. Find out what is broken and fix it.

That means, work on why it is failing and figure out what you need to add to make it work better, understanding that “better” might not be “good enough.” It might take several rounds of improvement before “better” becomes “good enough.”

Episode 4 | HSH Insider’s Club

Dominant Pace: Horses win because of their ability to dominate some portion of a race.

Show 3 | Horse Handicapping Live with Dave Schwartz

Howard Sartin and Me

It is August, 1987. I am working at a computer store in Reno as a salesman. As the story begins, I am actually on leave after having a minor but painful car accident on September 3rd.

Mid-September I meet a man in a racebook who is armed with a Sharp (I think) handheld computer and printer. He is explaining his printouts to me in a vernacular that I do not understand .He speaks of “EP,” “SP” and “percent early.” What I do understand is that his approach to racing is DIFFERENT and he is convinced that this methodology (the first time I have heard that word) works. I want to know about it as I want to know about everything horse racing.

He gives me the number of PIRCO and I call. (I do not recall now what PIRCO stood for.) I order the Phase III software and the accompanying yellow manual. With it comes several other manuals. As I recall, a blue one and some psychological stuff.

For me, reading the yellow manual produces a eureka! moment. I realize what has been wrong with my play for YEARS. (Note that at this time I am nine years into trying to figure out how to beat the game, when I thought it would take six months.)

Phase III was not exactly an elegant program, so I spend 2 weeks writing my own version. (Besides, there is a bone in my head that says I need to do everything my way.)

On October the 2nd, the day I am to return to work. Instead of going back to work, I quit. Somehow I just KNOW I am going to win at the window. I am THAT confident. Besides, I hated that job anyway.

Armed with $600, which is ALL THE MONEY I HAVE IN THE WORLD, I venture forth. My approach is Phase III + Brohamer Model.

Phase III was a velocity program, expressing speed in feet-per-second. The concept was to pick five contenders in each race, a single paceline for each horse, and decide which of the (then) 3 readouts was most important (EP, SP, W). This was determined by keeping a “model” of recent races at this specific track, surface and distance.

The betting strategy is simple – bet the top two horses in each race to win, betting 60% of your bet on the low odds horse.

My plan is to wager using my own money management system – what eventually became Horse Market Investing – but I wager the money as Doc suggested: 60%-40% on the low and high odds horses, respectively.

I am off and running! In September, my $600 becomes $2,000 by the end of the month! Unfortunately, I have a wife and children to support, so $1,400 of my $2,000 goes for rent, bills, and food for the coming month.

October – A repeat of September except the $600 grows to $3,000. The end of October robs me of $2,200. (Dang those kids having to eat EVERY month!).

November – $800 becomes $3,200. 3:1 becomes the monthly pattern which held true for the next several months. The problem is that my BR is just not growing from month to month.

All through the winter and early spring, each month is about the same. I start with $600-$800, grind out about 3x for the month and at the end of the month I have what I started with. I am beating them to death and making no headway!

April was a tough month. I was not losing but about half way through the month I am only $400 winner. Reality sets in – if I suddenly lose this BR I do not have a month to get a job and make it up and we will be short on rent. I quit playing and get a j-j-job.

This is also a busy time for me because baseball season is starting. My avocation is umpiring baseball games. All levels – from Little League to college. I work a lot of games over the coming months, as well as a full-time job as a craps/BJ dealer (grave yard shift).

When baseball ends in July, I have a nice little BR of $1,200 to call my own and go out to play again, full time. (Dealing is a thing of the past, at least for THIS summer.)

I am in the racebook at 6:30am and play until 10:30pm. In between I play every non-maiden race at just about every track that Ascuaga’s Nugget (in Sparks) handles. I “work” a 5-day week, playing Wednesday through Sunday.

Believe it or not, this is where the important real story actually STARTS.

(Next: Part II)

Show 4 | Handicapping Live with Dave Schwartz

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