Batting Average in the Win Pool

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If you can win 20% (.200 batting average) of your races at average odds of 5/1, your ROI, return on investment, will be +20%; and that’s a good goal to have, 20%. Here’s the math:
.20 X 5 – .80 = .20 (win percent times odds minus losing percent equals ROI)

Let’s do another one:

If you can win 25% of your races at average odds of 3/1, your ROI will be 0%! That’s good to know.

Let’s try again:

If you win 25% of your races at average odds of 7/2, your ROI will be 12.5%. So at a batting average of 25% look for 4/1 for a ROI of 25%.

And on and on…

I believe you should track at least 200 races (more is better) before you can be reasonably sure of your batting average.

But let’s remember that we all better know we can pull in some big prices to average things out if we’re hell bent on dabbling below our +20% ROI optimum odds. Otherwise we’re sure to strike out. Yeah, “average odds” is good phrase but it can also be the gateway to handicapping hell, an empty bank account. There’s certainly nothing wrong with betting the 5/2 standout but we should know about the additional risk we’ve taken on if we’re to achieve our +20% ROI considering our present batting average.

So what’s your batting average? Do you know? If you don’t know, find out and play accordingly. That’ll keep you in the game so you can come back tomorrow. Our batting averages are dynamic, of course, so we should do the math frequently so we know the odds we’ll need to achieve our return on investment goal.

Well, from this point it’s easy to calculate how much you’ll need to wager in order to achieve your daily financial goal. Maybe you’d like to look at your horse racing endeavor as if it’s a second job and an extra $100 per weekend on average would be nice. Let’s say you use your second job income to take your family on vacation every year, or whatever. Ok, that’s $50 per day. So if you have an ROI of 20% how much will you need to wager in order to accomplish your $50 per day goal (on average, of course). Here’s reality: You’ll need to wager (shovel through the mutuel windows or online account) $250 per day to achieve your $50 goal. So pick your daily goal and do the math.

Now we know exactly what we have to do to get to our favorite vacation spot, or, and to end with the baseball metaphor, to the major leagues.

December 15, 2010 • Posted in: Articles

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