Money management: How to bet using Dr. Z’s Track Money Management System

William T. Ziemba

Chapter 4 in Exotic Betting at the Racetrack, 2019, pp 39-51 from World Scientific Publishing Co. Pte. Ltd.

Abstract: There are two features of a winning betting system that distinguish it from a losing system. They are: (1) a selection scheme that identifies horses sufficiently underbet for a wager to have a positive expected return; and (2) an intelligent money management scheme. It should be clear that the first feature is necessary. Consistently betting on horses that are overbet MUST lead to losses in the long run. Indeed there is no way that a money management system can be devised to turn a sequence of losing bets into a profitable situation in the long run. The previous chapters dealt with this first feature. The bad news is that there does not exist a selection scheme based simply on the win odds that has a positive expectation unless superior handicapping is involved. The good news in Chapters 6–14, however, is that there exist selection schemes for place, show and exotic bets, involving only the toteboard figures, that have positive expectation. Then superior handicapping adds to the expected gains and long run wealth. This chapter will concentrate on the second feature, an intelligent money management scheme. That is, once you have identified an underbet horse, how much should you bet?…

Keywords: Efficient; Inefficient; Racetrack; Betting; Market; Exotic Betting; Race; Handicapping; Strategies (search for similar items in EconPapers)
JEL-codes: A1 C1 L83 (search for similar items in EconPapers)
Date: 2019
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