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Let's look at the realities of horse racing, today. As I mentioned in my last post, William L. Scott wrote about the percentages of the game. Let's go through them:

On average the favorite wins 33% of all races. The second choice wins approximately 20% of the time. Third choice in the betting win at around 14% of the time. The top three betting choices win approximately 67% of all races. Favorites (33%) will finish 1st or 2nd approximately 50% of the time. One of the top three betting choices will finish 2nd or better 90% of the time! Scott said, "Now that you know that one of the three top betting choices finishes 2nd or better 90% of the time, and if you are able to select the one that will defect his two rivals in two of three contests, you will attain a success percentage of 60% or more. And here you have a further advantage. If the one among the three that you select does not defeat another of his rivals, your selection might very well, and often does, wind up running 2nd and you will still cash a winning ticket."

Let's add some more to the mix - ask some questions. In his great book Winning Thoroughbred Strategies, Dick Mitchell popped the bubble of a lot of handicappers, I think. Here's why: If you have a 50% edge on the game and your win percentage is, say, 25% then you must be prepared for 18 losses in a row! The equation is the logarithm of .005 divided by the logarithm of the probability of failure - log(.005)/log(.75) = 18.41, round it to 18. Once again reality hits us square in the face.

So what does all of this mean? Well, the meaning for me comes from psychology and money management.

First question I must ask myself - and be as honest as I can: How many losses can I endure and still make good decisions? At what point do I come unhinged? When does FEAR take over? What dollar amount is my per wager comfort zone? Am I willing to let go of the NEED to be right?

Second question: How much capital do I have to work with? How much drawdown am I willing to take? If my win percentage is 25 then how much money should I wager on each event? Do I wager the same among on each event regardless of outcome? Am I willing to be disciplined enough to keep copious records?

Now we know what to expect as longshot players -long losing runs. That's reality. And we know, too, there's money to be made in the place pool. But most importantly, I think, we must know ourselves. I believe that successful handicapping - making a long term profit and having fun in the process - depends on how we answer those questions, and then accepting and working with the realities of the game. Oh yeah, almost doesn't hurt to be a damn good handicapper, too.