HMI

page 1
Preface
You hold in your hands the most powerful overall

approach to money management and wagering
success ever devised. If you permit it to, it may
even change your life.
Most horse racing books and systems make unbelievable promises and claims.
Some of the promises border on the absurd. Before you dismiss the above statement
as just another overstated promise, consider our reputation. We, at Horse Street Publi-
cations, have made a practice of understating. Our products have been, and always
will be, powerful, effective, and most of all, practical. But we do not tout our prod-
ucts as being everyone’s best answer to a given problem. Horse Market Investing
may be as close as we will ever come to an absolute “best” way to do anything.
So what promises can I make? First of all I promise you that this is not a “some-
thing-for-nothing” approach to wagering. If you are a player that loses consistently
because you are incapable of showing a flat-bet profit, I promise you that you will
continue to lose. If you are not willing to begin keeping records of your wagers then
you probably lack the commitment necessary for wagering success. If you expect this
strategy to overcome an unprofitable selection method, you will be disappointed
because no money management strategy can do that. Now the good news. If you are
capable of showing even a marginal flat-bet profit, Horse Market Investing will make
you tough to beat. Very Tough. If you are capable of showing a strong advantage,
HMI will make you virtually unbeatable.
How does it work? Most successful players have learned to separate the wagering
process from the selection process. Horse Market Investing takes you a step further
by separating the investment process from the wagering process. HMI treats your
bankroll as a “portfolio fund” and your horse racing selections as potential stocks in
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which to invest. You become the fund selector, deciding what to invest in, while HMI
becomes the fund advisor, deciding, how much to invest.
If you are the kind of player that experiences dazzling winning streaks followed
by dismal losing streaks Horse Market Investing will stop you from “blowing it all
back” and periodically going broke. If you are a more conservative player Horse
Market Investing will allow you to “grind it out” on a regular basis.
Before learning how to “get the money” consistently, however, one must first
come to understand why players lose consistently. Considering the subject matter of
this paper, you probably expect that my answer to that question must be money man-
agement.
It’s not. Sure, money management plays an important role. In fact, it is unlikely
that you can succeed without it, but the answer lies much deeper. It begins with the
underlying attitude of the player. You see, the winning player is actually playing a
different game than the “non-winners.” The non-winners (I’m being polite) are only
interested in instant gratification. They have no long-term plan for success. They play
the game from race-to-race or day-to-day without any real definition of what success
at the races means to them.
It is amazing how many successful people, veritable tycoons in the business
world, become idiotic blunderers in the wagering arena. These business moguls
wouldn’t dream of making even a minimal business investment without looking at
the “big picture.” But put them at the track with a pocketful of “Franklins” and they
become “wild and crazy guys.” Perhaps that is why many of them play; to be fast and
loose something they cannot do in their business endeavors. In order to succeed, you
must have a goal against which to measure your progress. Then you must create a
workable plan to achieve that goal. Finally, you must work the plan you have created,
deviating only when absolutely necessary.
Horse Market Investing is supposed to be about money management. So why am
I using so much ink on attitude? Because if you do not develop an attitude that is
conducive to winning, neither this method nor any other will save you.
Over the coming pages you will be introduced to a money management system
which is, to say the least, different from anything you have encountered before.
Sometimes you will increase your wager size after a win, while at other times you
may actually increase after a loss. Because of its contrarian nature, you must be con-
vinced that its underlying concepts are good before the method itself can be accepted.
To that end, this manuscript has been designed to do a “sales job” on you. It is writ-
ten in two sections. In the first section we explain the basics of money management.
Then we show you what’s wrong with the existing “state-of-the-art” money manage-
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ment method, the Kelly Criterion. In section two we explore the Horse Market Invest-
ing system itself.
Please resist the temptation to simply jump ahead to section two. It is essential
that you have a firm understanding of the basic money management concepts before
being introduced to the strategy. If you truly understand money management already,
it will only take a short time to complete the first section anyway. I assure you that
your time will be well spent.
When you begin applying the HMI strategy, you will likely begin to see why the
game seemed so difficult before. You will also begin to see that winning over the
long-term is not difficult; that going broke every few months does not have to hap-
pen. In fact, it may never happen again! For many of you, it will lead to a new confi-
dence; a confidence born of “knowing” the final outcome of your struggle against the
unseen opponent that always seems to sink your ship just as it reaches top speed. If
you’re good enough to more than break even on paper, you’re good enough to make
a significant amount of money from racing.
David E. Schwartz
Author
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Section I:
Basic Money Management
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1. Money Management Concepts
Before you can understand what’s wrong with the money management strategy
you’ve been using, you must first have an understanding of what money management
is. So, first we start with the basics.
out
The box to the right contains the results of five wa-
gers. We will use these wagers to begin our study of $6.00
money management. It is not too difficult to see that a
out
player which had flat-bet these five races would have
invested $10 and returned $12 foe a net profit of $2. $6.00
But to truly understand the impact of money manage-
out
ment we must delve deeper. We do this through use of
the Summary Box.
The summary box contains all the in-
Summary Box formation needed to get an accurate pic-
ture of the wagering history. Also, by learn-
wagers 5
ing how to fill this box out step-by-step
payoffs 2
even the novice money manager can get a
pay% 40.0
good handle on how good their selections
flat return $12.00
really are. A description of the 13 differ-
$net $2.40
ent fields, which make up the summary box
advantage 20.0
follows:
average pay $6.00
odds:1 2.00 wagers: This represents the total number
optimum bet% 10.0 of wagers made. If you wager on two
$returned $60.00 horses, each race should be considered a
$wagered $50.00 single bet.
$profit $10.00
payoffs: This represents the number of
return on investment 20.0
times you cash a ticket.
pay%: Simply, payoffs divided by wagers.
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flat return: This represents the average return if all wagers are $2 flat bets.
$net: This represents the average return for each $2 wagered. In other words, $2.00 is
the break-even point. It is computed by dividing the flat return by the number of wa-
gers.
advantage:This represents the “true edge” you have over the game based upon flat
bets. It is computed by subtracting $2.00 from the $net (to get the flat profit) and divid-
ing by $2. The result is expressed as a percentage.
average pay: This is the average payoff for $2 when you cash a ticket. It is computed
by dividing the flat return by the number of payoffs.
odds:1This is the average odds to $1.It is computed by subtracting $2.00 from the
average pay and dividing by $2.
optimum bet %: This is the optimum bet as computed using the “Kelly Criterion.”
The formula is, simply, advantage divided by odds: 1.
$returned: This represents the total monies actually returned from your wagers .In this
example, we have assumed that our player is a $10 flat-bettor.
$wagered: This represents the total of all monies actually wagered.
profit: This represents the actual profit realized from the wagers made. It is computed
by subtracting the total of all wages ($wagered) from the total returned ($returned).
return-on-investment (R.O.I.): This is the profit($profit) divided by the total money
wagered ($wagered) and is expressed as a percentage.1 It represents your advantage,
relative to how the money was actually wagered.
Before we continue on, let us discuss the Kelly Criterion, commonly refered to as
“Kelly” or “Optimum Bet.” The theory is that the optimum bet represents the percent-
age of bankroll, which will result in the fastest growth if future results are similar to past
results.
Take, for example, the player that had wagered upon five races in our sample from
the previous page. His optimum bet would be 10% of current bankroll. The “current”
has been emphasized because the bet should always be sized relative to the bankroll at
the time the wager is made.
1
In recent years some confusion has arisen regarding return-on-investment. An alternative method has
been to represent R.O.I. as the total return ($returned) divided by total money wagered (wagered).
Using this method, the R.O.I. figure includes your original dollar. Thus, in our example, the R.O.I.
would be expressed as “1.20.” We feel this is a confusing method because it no longer equates R.O.I. to
advantage.
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Suppose the player had returned the same $12, but had done it with one $12 winner
instead of two $6.00 winners. In that case, his advantage would be the same because he
still showed the same return-per-dollar-wagered. His optimum bet, however, would
become 4% instead of 10%. Remember that Optimum Bet is computed as “advantage
divided by odds.” Dividing the advantage, 20%, by the odds, 5:1, we get 4%.
Optimum Bet = Advantage/Odds
The optimum bet has decreased because the player is less consistent and, therefore,
should see more fluctuations in his performance and, thus, in his bankroll.
The reverse of this situation would be the player that returned the same $12 by
hitting three $4.00 winners. Once again we use the formula above...
20% / 1= 20%
and find that the optimum bet in this situation has risen to 20% of bankroll because
of the player’s increased consistency.
Does it work? Yes. But don’t take my word for it. Let’s test the Optimum Bet
theory against the five sample races from which it was computed.
Test 1: Betting 10% of bankroll

BR Bet Payoff Result
500 50 0 -50
450 45 $6.00 +90
540 54 0 -54
486 49 $6.00 +98
584 58 0 -58
526= final bankroll
If the theory is correct, then changing the bet percentage (either up or down) should
result in less growth. Let us try it using 20% instead of 10%.
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500 100 0 -100
400 80 $6.00 +160
560 112 0 -112
448 90 $6.00 +180
628 126 0 -126
502=final bankroll
This time, betting 20% of bankroll, we showed a net gain of only $2, which is $24
less than we gained betting 10%. Let us try again, but this time we’ll cut the bet down to
only 5%.
500 25 0 -25
475 24 $6.00 +48
523 26 0 -26
497 25 $6.00 +50
547 27 0 -27
520=final bankroll
So, in comparing the three tests, we find that the best results were achieved using
the optimum figure. When we underbet the bankroll (test 3,5%) we found our profit
was decreased from $26 to $20, a decrease of 23% ($5/ $26 =23%). When we overbet
the bankroll, we barely broke even! This is a critical point of understanding. Read the
statement below and etch it in stone:
“One can turn a positive expectancy

into a negative result simply by
overbetting the bankroll.”
If you doubt this statement, then try a few experiments on your own until you are
convinced. By the way, the order of wins-and-losses will not effect the results at all. In
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the following example our hero wins the first two wagers and loses the next three. Will
it make a difference?
Test 4: Wins come first

500 50 $6.00 +100
600 60 $6.00 +120
720 72 0 -72
648 65 0 -65
583 58 0 -58
525=final bankroll
No appreciable difference. The slight difference of $1 is due to rounding in the bet

size. Now let’s try it with the two wins as the last two bets:

500 50 0 -50
450 45 0 -45
405 41 0 -41
364 36 $6.00 +72
436 44 $6.00 +88
524=final bankroll
Again, we see a slight difference due to rounding, but no appreciable difference.

We submit this is sufficient proof to support our claim that the order of winners will not
change the end result.
By the way, there is a short cut to projecting growth over a number of wagers.
Suppose we want to project the growth of this player’s bankroll over the next 20 races.
The calculation could be done in the following manner:
First, we determine what happens to our bankroll when we win. In this case, assum-
ing that all payoffs are exactly $6.00, our bankroll will increase by 20% after each win
because we will bet 10% and get odds of 2:1. This 20% profit, when added to the
bankroll at the time the wager was made will result in a new bankroll figure of 120%.
We shall express this in decimal form as “1.20.”
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Next, we determine what happens to our bankroll when we lose. That’s easy. Since
we always bet 10%, our BR after a loss will be 90%, expressed as “0.90.”
The next step is to determine how many wagers in the series will be won and how
many will be lost. Since we anticipate 40% winners, we can expect to win 8 and lose 12
of the 20 races.
Now we determine the result of all those winners. We do this by multiplying the
win result (1.20) by itself 8 times (the number of winners).
Another way of saying this is to “raise 1.20 to the 8th power.” The mathematical
expression looks like 1.208. The resulting answer, which is 4.2998169, represents the
effect of eight winners and no losers on the bankroll. In other words, if the player wins
8 in a row his bankroll will grow to (approximately) 4.3 times what he started with.
Next, we will compute the effect of the 12 losers. The computation this time is .9012
and the answer, .2824295, represents the effect of 12 losers and no winners on the
bankroll. In other words, a player that lost 12 straight would wind up with (approxi-
mately) 28% of what he started with.
Now we combine the winners and losers together by multiplying the win effect by
the loss effect. The resulting answer, 1.2143951, means that the bankroll should grow
to about 121% of its starting point over the entire 20-race cycle.
“But,” you say, “this example only shows what happens if the wins and losses are
consecutive.” Remember, from tests #4 and #5, that the order of wins and losses doesn’t
matter. To prove the point, let us test the results against the original 5-race sample.
Remember that we have already computed the “win effect” as 1.20 and the “loss effect”
as .90. All we must do is perform the following:
1.202=1.44 (2 wins)
0.903=0.729 (3 losses)
Then, to get bankroll growth:
1.44 x 0.729 = 1.04976
And, to convert the growth to a “final bankroll:”
1.04976 x $500 = $524.88
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As you can see this is pretty close to the results we got in all the “10% of bankroll”
tests we performed (#1, #4, #5). As mentioned earlier the difference is due to the round-
ing of the bets to the nearest dollar. Nevertheless, you can see the accuracy.
This may seem a bit complex. A step-by-step procedure should help. Try following
the Bankroll Projection Worksheet below:
Bankroll Projection Worksheet

1 Enter total races to project 5
2. Enter projected win percentage . 40
3. Enter bet percentage . 10
4. Enter odds: 1 2.00
5. Compute win profit +. 20
(#3 times #4)
6. Compute win profit 1.20
(1.00 plus #5)
7. Compute loss result . 90
(1.00 minus #3)
8. Compute total wins 2
(#1 times #2)
9. Compute effect of wins 1.44
(#6 raised to power of 8)
10. Compute total losses 3
(#1 minus #8)
11. Compute effect of losses . 729
(#7 raised to power of #10)
12. COMPUTE NET RESULTS 1.04976
(#9 times #11)
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Just following the steps from top-to bottom will provide you with the correct an-
swers. Many inexpensive hand-held calculators do not have exponentiation keys, so
perhaps an alternative method will help. The following keystrokes will allow you to
compute 1.20^8 without the benefit of an “expo” key:
Keystrokes Display Reads Explanation

{1}{.}{2}{X}{=} 1.44 This represents 1.22. That is, 1.2
times itself.
{X}{=} 2.0736 This multiplies 1.44 times itself. The
resulting answer represents 1.24.
{X}{=} 4.2998169 This multiplies 2.0736 times itself.
The resulting answer represents 1.28.
Perhaps another short cut is in order. Suppose you wish to do the “40% wins at 2-1”
system again, but instead of projecting 5 races, you want to project 20 races. Since there
are four 5-race groups in a 20-race cycle, all that must be done is to raise the 5-race
growth to the fourth power. Recalling that the 5-race projection produced 1.04976 as
the result, we have the following:
1.04976^4 =20 race projected growth
Keystrokes Display Reads Explanation

{1}{.}{0}{4}{9}{7}{6} 1.04976 Enter the value after 5 races.
{X}{=} 1.101996 Multiplies 5-race growth by itself to
determine 10-race growth.
{X}{=} 1.2143951 Multiplies 10-race growth by itself to
determine 20-race growth.
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2. What’s Wrong with Kelly?
Nothing. There is absolutely nothing wrong with the Kelly theory. On paper. In the
real world, however, there are serious problems. Remember the five-race example we
used back in Chapter One? Let’s take another look at what happened when our hero bet
10% of bankroll into that sample.

500 50 0 -50
450 45 $6.00 +90
540 54 0 -54
486 49 $6.00 +98
584 58 0 -58
526= final bankroll
Take a good look at the summary

box. Notice anything interesting? The Summary Box
flat-bet player wagering $2 per race bet wagers 5
$10 and returned $12 for an R.O.I. of payoffs 2
20%. But the 10% bettor wagered $256 pay % 40.0
and made a profit of $26 for an R.O.I. flat return $12.00
of only 10.2%! What happened to the
20% advantage? A look at the actual $net $2.40
wagers will show you that the two win- advantage 20.0
ning bets were the two smallest wagers average pay $6.00
while the losing bets were the three odd:1 2.00
largest. Isn’t this somewhat counter- optimum bet % 10.0
productive? $returned $282.00
$wagered $256.00
This is one of the problems associ- $profit $26.00
ated with betting percentage-of-bank- return on investment 10.2
roll. It lowers your advantage! Always.
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Personally, I go to great lengths to raise my advantage. As bad as this scenario appears
to be, believe it or not, it can get worse. You see, the whole theory behind the optimum
bet is that the future results will be very similar to the history, which was used to com-
pute the bet size. Again, applying our example of a 40% projected win rate and odds of
2-1, but projecting a 20-race cycle we have the following growth computation:
5 races = 1.04976
10 races =1.101996
20 races =1.2143951 x $500 = $607.20
So, what we are saying here is that the “average” 20-race cycle should result in a
growth factor of 21.4%. That is if the player wins the anticipated 8 races, he should
wind up with 1.214 times what he started with. Below you will find an example of a
typical 20-race cycle:
BR Bet Payoff Result BR Bet Payoff Result
500 50 $6.00 +100 553 55 $6.00 +110
600 60 0 -60 663 66 0 -66
540 54 0 -54 597 60 0 -60
486 49 $6.00 +98 537 54 $6.00 +108
584 58 0 -58 645 65 0 -65
526 53 $6.00 +106 580 58 $6.00 +116

632 63 0 -63 696 70 0 -70
569 57 0 -57 626 63 0 -63
512 51 $6.00 +102 563 56 $6.00 +112
614 61 0 -61 675 68 0 -68
607=final bankroll
profit = $107
wagered =$1,171
R.O.I. = 9.14%
Notice that, again, the return-on-investment has fallen short of the flat-bet advan-
tage of 20%. Maybe the reason for this will become more apparent if we sort the wagers
by bet size and look for a pattern.
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It does not take a genius to discern a pattern in these Bet Result
wagers. Obviously, this player is consistently betting more 70 L
on losers than winners. This is very counter-productive. 68 L
When I said that things could get worse, suppose this 66 L
twenty-race cycle did not result in eight winners but rather 65 L
in “only” seven winners. We will modify our illustration 63 L
by replacing the last winner with a loser. Thus, follow as 63 L
we correct just the last two wagers: 61 L
60 L
60 L
BR Bet Payoff Result 58 W
563 56 0 -56 58 L
507 51 0 -51 57 L
456=final bankroll 56 W
55 W
profit=[-44] loss 54 W
54 L
wagered= $1,154 53 W
R.O.I.= -3.84% 51 W
50 W
Spend some time staring at this illustration because 49 W
some serious reality is to be found here. For many players
it explains why they come home from the track with less
money than they arrived with so consistently. It isn’t the cost of parking, admission,
program, forms, etc. It isn’t even the track take. Simply put, they are playing a game,
which is “self-defeating.” That is, even if they overcome the take enough to break even
(on flat bets), it isn’t good enough. In our example, the player got 35% winners at
$6.00, a performance which is good enough to produce a flat-bet advantage of 5%, yet
the player showed a net loss!
The Kelly purists out there will argue that this player lost because he did not per-
form up to his previous standard. My counter argument is that the player should have
won! After all, he only under-performed history. He outperformed the break-even point.
He deserved to win. Not much, perhaps, but he certainly did not deserve to lose.
Another argument put forth is that most players do not bet the true Kelly, but rather
a “fractional” Kelly. That is, if the optimum bet were (say) 10%, they would bet a lesser
amount (such as 5%) instead. This approach will get the player closer to even, but he
still won’t get what he deserves. Furthermore, while the Kelly method is the best system
(on paper), there are any number of methods which will outperform a fractional Kelly.
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For example, in The Guide to Casino Gambling, by Allan Wilson in the early six-
ties, he made mention of Oscar’s System. This system was designed for even-money
wagers, but it should prove a point about the significance of increasing after a win
versus increasing after a loss.
Oscar’s system was a simple one: Start with a base bet, such as $10 and increase by
$1 after each losing bet and decrease by $1 after each winning bet. Watch the effect on
the following series of even-money wagers:
LLWLWLWW
-10 -11 +12 -11 +12 -11 +12 -11
The theory is that everytime a bet is won and then lost the player shows a net profit
of $1,even if the bets don’t occur consecutively. The effect is that any combination of
one winner-one loser will “cancel” each other out with the player showing a $1 profit.
The above sequence produces a profit of $4. Granted, this was against a break-even
series (4 wins, 4 losses) of wagers, but before discounting this success, recall that the
Kelly method lost against a winning sequence. To illustrate the potential of this ap-
proach, consider the results from an “average” 50 plays at the crap table which con-
tained 24 wins and 26 losses:
-10 -14 -14 -12 -12

+11 -15 -15 -13 -13
-10 +16 -16 +14 +14
-11 +15 +17 +13 +13
-12 +14 +16 -12 -12
+13 -13 +15 +13 +13
-12 -14 -14 +12 -12
-13 +15 +15 +11 +13
-14 -14 +14 -10 +12
+15 +15 +13 -11 -11
If we break the wagers down by bet size we can easily compute the results and see
a positive pattern:
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bet w-l result
$10 0-3 -30
$11 2-3 -11
$12 2-7 -60
$13 7-4 +39
$14 4-6 -28
$15 6-2 +60
$16 2-1 +16
$17 1-0 +17
24-26 +3
Notice that the larger bets outperformed the smaller bets. Isn’t this precisely what
any bettor would wish for; to bet more in winning situations and less in losing situa-
tions? This is a far cry from the 20-race Kelly cycle earlier.
Let’s illustrate what would happen if we started with $500 and bet just 5% of bank-
roll through the same series.
-25 -20 -20 -22 -22

+24 -19 -19 -21 -21
-25 +18 -18 +20 +19
-24 +19 +17 +21 +20
-23 +20 +18 -22 -21
+21 -21 +19 +21 -21
-22 -20 -20 +22 -21
-21 +19 +19 +23 +20
-20 -20 +20 -24 +21
+19 +19 +21 -23 -22
profit=[-76] loss
wagered = $1,036
R.O.I. = -7.34%
Now, before you get all excited and decide that craps is much easier than horse
racing, permit me to burst your bubble by saying that it won’t work. I have run years of
simulations using this strategy (and many others) and can assure you that A NET PROFIT
IS ONLY POSSIBLE IF A POSITIVE EXPECTANCY EXISTS. Furthermore, I am
not suggesting this approach even if you do have an advantage.
page 18
What I am trying to illustrate here is that any wagering investor with a positive
expectancy may make himself tougher through application of a powerful betting strat-
egy. I am also trying to illustrate that bettors with a positive expectancy may create a
tremendous “pressure cooker” environment for themselves by using any percentage-of
-bankroll wagering system.
That’s the end of the “sales job” I promised you. Hopefully, I have succeeded in
opening your mind to the idea that perhaps there is a better way. The Kelly Criterion
does have its place in the wagering arena and later on in this manuscript I will explain
where it fits in. Rest assured that its application is, like the upcoming money manage-
ment strategy itself, somewhat contrarian in nature. Before you turn the page and begin
reading, relax for a moment and absorb the following thought:
“When riches come, they come so quickly

and in such abundance that one wonders where
they were hiding through all those lean years.”
Napoleon Hill, Think & Grow Rich
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3. The Session Concept
When a new game is invented, much time is spent on the rules. Rules governing
how to play, actions that are permitted and those that are not, and, most importantly, the
object of the game. The principles of game theory do not support the old adage, “It is
not whether you win or lose, but how you play the game.” Nice thought, but any game
in which the winning and losing does not matter would be very boring. It would also be
frustrating. Ever play Monopoly until all but one player goes broke? The game just goes
on and on until everyone loses interest and quits.
But, you say horse racing is a very well defined game. The horses start from the
starting gate and run a prescribed distance to the finish line. The horse which crosses
the line first wins. How could it be better defined?
Well, I play a different game. I play a game called Horse Race Wagering. The
object of this game is not to choose which horse crosses the finish line first. Sure, I am
concerned about wins, places, and shows, etc. But the object of my game is growing
bankroll. This is not just a matter of semantics. Let me explain.
When a horseplayer goes to the track, there are three things that can happen to him.
He can win money, lose money, or break even. If he loses consistently over a period of
time, eventually the bankroll goes away and there is nothing to bet with and one of the
rules says you must make wagers to play (boring without it, remember?). Perhaps to-
morrow the player will acquire another bankroll and start another game, but this game
is over.
If he wins consistently over a period of time, the money in the “BR” grows and
grows, but the game never ends because his opponent (Mr. General Public) never runs
out of money. While he is winning he may draw money out for expensive toys, living
expenses, or investments, but the game never ends. In other words, he is playing a
game, which can be lost, but never won. He can never win because as long as he is
ahead the game will continue.
Psychologically this can be very bad. It is one reason why even some players that
win consistently get “burned out” and periodically need some time off to recharge their
batteries (so to speak). A player may win for several months, withdrawing thousands
page 20
from his bankroll as profit. But everytime he hits a bad streak and goes broke, it regis-
ters as “Oh, well, broke again.”
It is very difficult to stay “up” when you know that you will eventually lose.
What is the answer? Simple, really, Just change the way you keep score. Set aside
a portion of your bankroll as a “playing bankroll,” then set a goal relative to this portion
and play until the goal is accomplished (or the bankroll is lost). I refer to this as “session
play.” Now you will have an opportunity to win as well as lose. You win if you success-
fully accomplish your goal and lose if your session bankroll goes away. Over a period
of time you will develop a “session win percentage” and this will add to your overall
confidence.
Another advantage to session play is that it helps you overcome the fear of going
broke. When you go out to play with your entire stake, it puts a great deal of pressure on
you. Whatever your method of money management, no matter how successful you have
been in the past, having a bad day or bad week and blowing the whole bankroll may
always be in the back of your mind.
In applying the session approach, you must find a system that feels comfortable to
you. Determine a session size relative to the entire bankroll and choose a goal for the
session. My personal method is to play a session with 40% of the entire bankroll and
play until the session bankroll triples. When the session has been won, the entire bank-
roll will be 180% of the original bankroll. At this point I take 30% as a withdrawal,
leave the bankroll at 150% of the original amount and the process is repeated.
For example, suppose you have $1,000. Using my method, you would play a ses-
sion with $400.The session would be complete when the $400 reaches the $1,200 target
($800 profit) or goes away completely. If the session is won then then the $1,200 is
added back to the $600 left from the original bankroll and you take a $300 (30% of the
original $1,000) withdrawal for your trouble. The next session would be $600 (40% of
$1,500). Play this approach and you will have a totally different outlook on the game.
You have defined the rules clearly and you have added a personal incentive (the with-
drawal) for a successful session.
This approach is by no means the final word. It is but one of an infinite number of
methods. Whatever session strategy you choose to implement must reflect your goals
and ambitions rather than mine or anyone else’s.
page 21
4. The Power of Sessions
When you apply the “session” concept of money management, you are no longer
playing against an opponent with unlimited capital. Consider a “game” with the follow-
ing rules:
1. Session will be 25% of the total bankroll.
2. Session will be considered “won” when session bankroll doubles.
3. Session will be considered “lost” when session bankroll is 0.
4. All bets will be 10% of current session bankroll amount.
5. Minimum bet will be $10.
Suppose your bankroll stands at $1,000. This session will be defined as “Win $250
before losing $250.” You have not only limited your playing bankroll; you have limited
your opponent as well! No longer are you facing an opponent with unlimited funds.
Now your “faceless opponent” has the same bankroll as you, $250.
A few years ago, I had a sports betting client with a problem managing his money.
I explained the opponent concept to him through the following example:
“Suppose you get together every Sunday during the football

season with your next-door neighbor to watch football and make a
few bets. Your neighbor doesn’t know very much about football,
but he likes to bet anyway. Every season you both start with $500
and bet $20 on each game. Each week you take turns picking teams
to bet on (against the spread) until all the games have been selected.
How would you expect to do?
The client says, “I’d probably get the money almost every sea-
son because I know more about the game than my neighbor does. I
could still have a bad year but I’d be tough.”
“Okay.” I said, “Now let’s modify the game a little. Suppose
you get to decide how much your neighbor will bet on each game he
selects. How does this affect your chances?”
page 22
“They are getting better because I can force him to bet more
whenever I feel he’s made a bad choice and less when he makes a
good choice,” says the client.
“Right. Let’s modify the contest even more by allowing you to
pick all the teams and pass any game you don’t feel good about.
Also, you will be the one to decide how much is bet on every game
and you may bet any way you like. Sides, totals, parlays, anything.
Furthermore, your neighbor may not refuse any wager for which
there is a published line at any sports book in Reno. In return for
these improvements, however, you must put up $11 to win $10 on
each game. Now how do you like your chances of winning the ses-
sion from your next-door neighbor?”
“I like them real good. He has no control over his own bank-
roll. I can force him to make whatever bad bets I can find for him. In
fact, he may not make a good bet all season (laughter). I can even
shop around for the best line or put him in a no-win situation if I find
a good middle. Even if he’s as good as me, he has no chance of
winning for the season because I am in complete control. How do I
go about finding a neighbor like this? Where is this neighborhood
(more laughter)?”
“What I have just described to you, dear client, is the exact ar-
rangement you have with every sports book in this city. You have
complete control over the games which will be wagered upon and
you can bet them anyway you like. Your opponent, the Reno sports
books, will not refuse your wager anymore than the neighbor will. If
you win a session, you can make your opponent start a new session
of whatever size you choose. What do you think, now?”
Long pause. “I never looked at it that way before. I guess, I
really am in total control. It sure makes the contest look lopsided,
doesn’t it?”
I have told this story again and again to sports bettors and horse players across the
country for years. It is amazing how the attitude of the player changes when they apply
this “new outlook” to their game. The game of football (or horse race) wagering has not
really changed, of course. But the player’s game has changed immensely. His game has
become one based upon exploiting the true weakness of his opponent; that is, lack of
control in the contest. One of the by-products of this change is patience born of the
inevitability that the opponent will slip up often enough to virtually remove all doubt of
the final outcome.
page 23
You, of course, have the same opportunity at the race track as the football bettor
mentioned previously. You choose which horses to wager on and how they are wa-
gered. You may pass any race, bet more on some races or horses than others, or not play
at all on a given day. But, most of all, you have the ability to limit and control your
opponent.
Let’s try another example. You and I play a heads-up poker session together every
Thursday evening. Our playing abilities are exactly even, we start each session with
$100, and we play until one of us goes broke. Neither of us has an advantage in this
game. But suppose I read a new book on poker that you haven’t read yet; one that gives
me even a slight advantage over you. The chances of you winning a session will de-
crease significantly because of the “compound interest” on my slight advantage. That is
why casinos can continually make big-time dollars with relatively small edges at games
such as craps, baccarat, and roulette.
This brings up another formula from Allan Wilson’s Guide to Casino Gambling,
the Gambler’s Ruin formula. This formula addresses the chances of losing a session
with a given number of units (ruin) before winning the same number of units. This
formula is not quite so simple as the Kelly Criterion.
As an example of its workings, let us suppose that we are playing an even-money
game that has a disadvantage of 2%. Out of 100 wagers we should, therefore, win 49
and lose 51. The question that we want answered is “What are our chances of taking $5
and turning it into $10 if we make $1 wagers?” As with the BR Projection earlier, we
have created a worksheet to make it easier to understand.
Gamblers Ruin Worksheet

1. Enter number of units per session 5
2. Enter chances of winning a single unit . 49
3. Chances of losing a single unit . 51
(1.00 - #2)
4. Computation A 0.9607843
(#2 / #3)
5. Computation B 1.8187087
(#4 ^#1 +1)
6. Chances of Ruin (losing) . 54984066
(1 / #5)
page 24
What this table says is that if I start with 5 units and a 2% disadvantage I have a
55% chance of losing my 5 units before winning 5 units. My session win percentage
would be only 45% and the 2% disadvantage is now 10%! Look at the session-by-
session win percentages computed with the above formula:
Units Ruin Win%

1 51.0 49.0
5 55.0 45.0
10 59.9 40.1
15 64.6 35.4
25 73.1 26.9
50 88.1 11.9
75 95.3 4.7
100 98.2 1.8
200 99.97 0.03
Looking at a game with a slight disadvantage in this manner illustrates why it is so

difficult for any gambler to win in Las Vegas. Notice that a $1 player would succeed in
turning $100 into $200 less than 2% of the time and would turn $200 into $400 only 3
times in 10,000!
To further get a “grip on reality,” let us look at what happens if we increase the
disadvantage to 5.26%, the disadvantage of betting a color on the roulette wheel:
Units Ruin% Win%

1 52.6 47.4
5 62.9 37.1
10 74.1 25.9
25 93.3 6.7
50 99.49 0.51
100 99.9973 0.0027
When the numbers get this large it us sometimes hard to visualize their meaning.
Imagine there is a player that comes to Las Vegas every weekend with $100 to play $1
roulette. The player continues to play until either the $100 becomes $200 or the money
goes away. At this rate, the player would average one winning session every 724 years!
(Editor’s note: That is not a miss print. It really is years!)
page 25
What we are trying to make you aware of is the awesome power generated by even
the smallest advantage when applied to a session-by-session approach. If you accept
nothing else from this paper, accept this:
“Session play is a very powerful method

when applied with even a small advantage.
When combined with a significant advantage
it becomes devastating.”
page 26
Section II:
Hor se Mar
Horse ket In
Mark Invves ting
esting
page 27
1.The Right Attitude
gam-ble (gam’-bel) v. 1. To risk or bet something of

value on the outcome of a game of chance, etc.
in-vest(in-vest’) v.t. 1. To commit or use (money, capital,

etc.) for the purchase of property, securities, a business,
etc., with the expectation of profit.
Funk& Wagnalls Standard Desk Dictionary
To many horseplayers the difference in the above definitions may seem purely a
matter of semantics. After all, a rose by any other name is still a rose. I assure you that
this is not the case. To fracture an old cliche,” Gamblers gamble, investors invest and
never the twain shall meet.”
The primary difference between the two definitions can be seen clearly in the last
five words: “with the expectation of profit.” Now certainly no horseplayer on the planet
would say “I don’t expect to win.” But many of them (you?) feel deep down inside that
they cannot expect to win over the long run because they have never won before. Sure,
there have been some successes; big days, big weeks, even big months. But the end
result is always the same: going broke. And worse than “broke,” often “broken.”
Being emotionally, financially, and spiritually beaten is not easy to take. Neither is
it easy to forget. The memory of the past failures can cause future failures as well,
because losing becomes a habit.
page 28
Winning is a habit also. Fortunately, it is a habit which can be acquired without
great difficulty. That is not to say it can be had cheaply. There is definitely a price that
you must pay. The price is called “commitment.”
By commitment, I mean making the decision to succeed as a “wagering investor.”
Much of this commitment falls outside the scope of this material, but we shall devote a
few words to it nevertheless.
In order to succeed you must learn to treat horse race wagering as an investment
business. You must upgrade your self-image to the point where see your wagering en-
deavors as a positive part of your life. You must be able to see that it does good things
for you and the people that matter to you. Most of all you must decide to do whatever it
takes to succeed.
Most “horseplayers” see a trip to the racetrack as a pleasant way to spend an after-
noon, while the professional (or semi-professional) sees it as just another workday in
their business. This does not mean that racing cannot be pleasurable. However, you
must learn to take pleasure from the investment challenge rather than from the excite-
ment of the “gamble.” Horse Market Investing is designed for the serious wagering
investor. The player that just wishes to “dabble” at wagering can, of course, obtain
superior results by using a superior method. This manuscript was designed for the in-
vestor with serious achievement in mind.
page 29
2. Down to Business
Whether the investment vehicle is stocks, mutual funds, commodities, raw materi-
als, or finished goods, the goal of all investors is the same: buy low and sell high. Horse
Market Investing is based upon the same principle.
We view the profitable wagering investor’s selections as being similar to a very
volatile “blue chip” stock. That is, a stock which is subject to strong upward and down-
ward swings, but with an overall upward trend.
Imagine you have in-
vested $10,000 in the stock G
shown in the graph to the
right. You purchased as many E
shares as your $10,000 would
buy at point A and begin the
C
roller coaster ride that so A
many lump sum investors
experience. You watched F
with trepidation as your stock
B
began dropping (from A to B) D
and with elation as it rose
back up to point C. During
the great crash from C to D you considered selling out to cut your losses, but hung on to
watch your stock reach a new high at E. After a downturn to point F followed by a new
high at G you decide to sell. The profit you have shown is illustrated by the dashed
vertical line shown just to the right of point G.
It doesn’t take a genius to figure out that you would have made more if you had
bought at B, sold at C, reinvested at D, sold out at E, etc. Horse Market Investing is
good, but it’s not that good. To buy low and sell high is, of course, the goal of every
investor. For the wagering investor, this would be equivalent to increasing one’s bank-
roll during a winning streak and decreasing the bankroll during a losing streak. That is
what HMI does!
page 30
HMI Beginner’s Worksheet here
page 31
Look at the Horse Market Investing Beginners Worksheet found on the previous
page. This sheet was designed to teach you the basic operation of the system. Eventu-
ally we will add a few bells and whistles to make the system even stronger, but for now,
this is plenty to work with.
Let us set up an HMI portfolio for an imaginary player. He has $2,500 to use as
capital, bets two horses per race, and typically wins about 60% of his races. His average
mutuel is about $8.00 which results in a net mutuel (between the two horses) of even
money. He feels comfortable betting 10% of bankroll per race, which is about half of
the Optimum Bet. Our hero has opted to use the session approach, and has decided that
the first session should be $1,000, 40% of his entire stake. His goal is to triple the
$1,000.
HMI Beginner’s Worksheet

1 2 3 4 5 6 7
Current High Low HMI Cash Total
Bankroll Invested Window Window Advisor Reserve Value
500.00 500 550 450 500 $1,000
Let us look at each of the columns individually. The first column, Current Bank-
roll, represents the actual playing bankroll used to determine the bet size. The second
column, labeled Invested, represents the amount actually invested in the playing bank-
roll to date. Column 3,High Window, is always 10% more than the Invested column,
while Column 4, Low Window, is always 10% less than the Invested column. The HMI
Advisor column we shall ignore for now. The Cash Reserve column represents the rest
of the $1,000 that has not been put into play yet. That is, it is not part of the Current
Bankroll nor is it available for wagering at this time. It is simply being kept in reserve.
Think of the Current Bankroll as the money in our player’s pocket while the Cash
Reserve is the money in his wallet. The Total Value column represents all the money,
both in pocket and in wallet. Follow along as our investor makes a few plays. In the
interest of simplicity, we have decided that all his winners will pay even-money.
Bet #1: Since the Current Bankroll is $500, he wagers $50 (10% of $500) and
loses. The Current Bankroll is now $450, Cash Reserve has not changed, and Total
Value is $950. Our worksheet looks like the one at the top of the next page.
page 32
1 2 3 4 5 6 7
500.00 500 550 450 500 $1,000
450.00 500 550 450 500 $950
Now an explanation of the Low Window is in order. Think of this column as a “low
threshold.” That is, this is the lowest point that the HMI Advisor will allow the Current
Bankroll to go. Whenever the Current Bankroll drops below this level, the Advisor will
signal for a bankroll adjustment sufficient to bring the Current Bankroll back up to this
level. The adjustment will be made by moving money from the Cash Reserve fund to
the Current Bankroll fund. In this case, since the Current Bankroll is not less than the
Low Window, no adjustment is necessary.
Bet #2: Since the Current Bankroll has dropped to $450, our hero bets $45. Once
again, he loses.

1 2 3 4 5 6 7
500.00 500 550 450 500 $1,000
450.00 500 550 450 500 $950
405.00 500 550 450 add 45 500 $905
The Current Bankroll has been adjusted downward the amount of the loss. Notice
that the HMI Advisor has said “add $45” to the bankroll. This is because the Current
Bankroll has dropped beneath the Low Window figure and it will take a $45 addition to
bring it back up. Before we go on to the next wager we must make some other updates
to our worksheet.

1 2 3 4 5 6 7
500.00 500 550 450 500 $1,000
450.00 500 550 450 500 $950
405.00 500 550 450 add 45 500 $905
522 574 470 455
page 33
Notice that we have subtracted $45 from the Cash Reserve and added only $22 to
the Invested Column. This is not an error. Whenever we transfer money from Cash
Reserve to Current Bankroll, only half the amount will be added to the Invested col-
umn. The High Window and the Low Window columns have been recomputed to, once
again, reflect 10% more and less, respectively, than the figure in the Invested column.
Bet#3: The Current Bankroll stands at $450 after adding the $45 which our advisor
told us to add. Therefore, the next bet is $45 (10% of $450). This time our hero cashes
a ticket at even-money, winning $45. We update the chart as follows:

1 2 3 4 5 6 7
500.00 500 550 450 500 $1,000
450.00 500 550 450 500 $950
405.00 500 550 450 add 45 500 $905
495.00 522 574 470 455 $950
The Current Bankroll has risen above the Low Window, so the HMI Advisor does
not tell us to add anything. He is now watchful of the Current Bankroll rising above the
High Window. If it were, he would be telling us to remove money. But presently, it is
between the High and Low Windows so no change is recommended. The next line on
the worksheet may be updated in preparation for bet #4.

1 2 3 4 5 6 7
500.00 500 550 450 500 $1,000
450.00 500 550 450 500 $950
405.00 500 550 450 add 45 500 $905
495.00 522 574 470 455 $950
522 574 470 455
Notice that we have “brought down” the things which have not changed. That is,
Invested ,Cash Reserve, and both Windows.
Bet #4: With the Current Bankroll at $495, our hero wagers $50 and wins again at
even-money. The worksheet now looks like this:
page 34
1 2 3 4 5 6 7
500.00 500 550 450 500 $1,000
450.00 500 550 450 500 $950
405.00 500 550 450 add 45 500 $905
495.00 522 574 470 455 $950
545.00 522 574 470 455 $1,000
522 574 470 455
The Current Bankroll is now $545 which, once again, places it between the High
Window and the Low Window. Remember that whenever this occurs there will be no
change in the Current Bankroll. Since there were no changes to be made we have brought
down all the necessary columns in preparation of the next wager.
Bet #5: This time our player makes his largest wager, $55, and wins. The newest
entry has been made to the worksheet:

1 2 3 4 5 6 7
500.00 500 550 450 500 $1,000
450.00 500 550 450 500 $950
405.00 500 550 450 add 45 500 $905
495.00 522 574 470 455 $950
545.00 522 574 470 455 $1,000
600.00 522 574 470 sub 26 455 $1,055
522 574 470 481
Notice that the HMI Advisor has asked us to transfer $26 from Current Bankroll to
the Cash Reserve fund. This is because the Current Bankroll ($600) is $26 more than
the High Window ($574). Thus, the advisor feels it is time to “take some profit.” Fur-
ther, notice that no adjustment was made in the Invested column for the $26,although it
was added to the Cash Reserve. Since there was no change in the Invested, no change
was necessary in either of the Windows columns.
Bet#6: After subtracting the $26 from Current Bankroll, our investor has $574
left and bets $57.Again he wins, leaving the Current Bankroll at $631.
page 35
1 2 3 4 5 6 7
500.00 500 550 450 500 $1,000
450.00 500 550 450 500 $950
405.00 500 550 450 add 45 500 $905
495.00 522 574 470 455 $950
545.00 522 574 470 455 $1,000
600.00 522 574 470 sub 26 455 $1,055
631.00 522 574 470 sub 57 481 $1,112
522 574 470 538
After four consecutive winners, that advisor has leveled the Current Bankroll off
$574,calling for a subtraction (transfer) of $57 to Cash Reserve. Remember that when
the Current Bankroll levels off, so do wagers. Again, all of the appropriate numbers
have been brought down and we are ready for bet #7.
Bet#7: The play is $57 again and results in a loss.

1 2 3 4 5 6 7
500.00 500 550 450 500 $1,000
450.00 500 550 450 500 $950
405.00 500 550 450 add 45 500 $905
495.00 522 574 470 455 $950
545.00 522 574 470 455 $1,000
600.00 522 574 470 sub 26 455 $1,055
631.00 522 574 470 sub 57 481 $1,112
517.00 522 574 470 538 $1,055
522 574 470 538
Since the Current Bankroll, $517 still lies between the High and Low Windows,
there is no adjustment. The advisor is content to permit the wager size to drop.
Bet#8: The next bet is $52 and results in another loss, dropping the Current Bank-
roll to $465.
page 36
1 2 3 4 5 6 7
500.00 500 550 450 500 $1,000
450.00 500 550 450 500 $950
405.00 500 550 450 add 45 500 $905
495.00 522 574 470 455 $950
545.00 522 574 470 455 $1,000
600.00 522 574 470 sub 26 455 $1,055
631.00 522 574 470 sub 57 481 $1,112
517.00 522 574 470 538 $1,055
465.00 522 574 470 add 5 538 $1,003
524 576 472 533
The drop below the Low Window causes the HMI Advisor to demand a small addi-
tion of $5 to bring the Current Bankroll back up to $470. Understand the impact of this.
The advisor has decided that the investor has taken “a few lumps” and is ready to begin
another upward surge, so has advised that the bets level off.
Bet #9: With the Current Bankroll at $470,he wagers $47 and loses again. This
drops the bankroll to $423 and causes the advisor to make up the loss (plus $2) to bring
the Current Bankroll figure back up to $472, the Low Window.

1 2 3 4 5 6 7
500.00 500 550 450 500 $1,000
450.00 500 550 450 500 $950
405.00 500 550 450 add 45 500 $905
495.00 522 574 470 455 $950
545.00 522 574 470 455 $1,000
600.00 522 574 470 sub 26 455 $1,055
631.00 522 574 470 sub 57 481 $1,112
517.00 522 574 470 538 $1,055
465.00 522 574 470 add 5 538 $1,003
423.00 524 576 472 add 49 533 $956
548 603 493 484
Bet#10: Betting $47 again, our hero experiences has fourth straight loss. The bank-
roll is at $425,and the HMI Advisor is placing another demand upon the Cash Reserve
page 37
fund. The logic is, of course, that he has seen it all before. Streaks come and go, and
they’ll come back again. But his player always comes back to even or better.

1 2 3 4 5 6 7
500.00 500 550 450 500 $1,000
450.00 500 550 450 500 $950
405.00 500 550 450 add 45 500 $905
495.00 522 574 470 455 $950
545.00 522 574 470 455 $1,000
600.00 522 574 470 sub 26 455 $1,055
631.00 522 574 470 sub 57 481 $1,112
517.00 522 574 470 538 $1,055
465.00 522 574 470 add 5 538 $1,003
423.00 524 576 472 add 49 533 $956
425.00 548 603 493 add 68 484 $909
582 640 524 416
Bet#11: With the bankroll at $493, the wager is $49 and is a winner. Finally, the
losing streak has ended. But will this winner be the beginning of better things?

1 2 3 4 5 6 7
500.00 500 550 450 500 $1,000
450.00 500 550 450 500 $950
405.00 500 550 450 add 45 500 $905
495.00 522 574 470 455 $950
545.00 522 574 470 455 $1,000
600.00 522 574 470 sub 26 455 $1,055
631.00 522 574 470 sub 57 481 $1,112
517.00 522 574 470 538 $1,055
465.00 522 574 470 add 5 538 $1,003
423.00 524 576 472 add 49 533 $956
425.00 548 603 493 add 68 484 $909
542.00 582 640 524 416 $958
582 640 524 416
page 38
Note that there was no change requested by the advisor because the Current Bank-
roll is between the windows. He’s ready to “fire it back.”
Bet #12: The bet is $54 and is a loser. So much for the bad spell being over.

1 2 3 4 5 6 7
500.00 500 550 450 500 $1,000
450.00 500 550 450 500 $950
405.00 500 550 450 add 45 500 $905
495.00 522 574 470 455 $950
545.00 522 574 470 455 $1,000
600.00 522 574 470 sub 26 455 $1,055
631.00 522 574 470 sub 57 481 $1,112
517.00 522 574 470 538 $1,055
465.00 522 574 470 add 5 538 $1,003
423.00 524 576 472 add 49 533 $956
425.00 548 603 493 add 68 484 $909
542.00 582 640 524 416 $958
488.00 582 640 524 add 36 416 $904
600 660 540 380
The HMI Advisor doesn’t panic. He simply replaces some of the money lost ($36)
and goes on. To date they have won only 5-of-12 wagers, at least one win below their
anticipated performance. The advisor knows that this will not continue indefinitely. In
spite of all the “adding” to bankroll, only 58% of the total value is invested in the
Current Bankroll. In fact, the portfolio is only $96 loser!
Bet #13: The bet is $52 and is a winner.

1 2 3 4 5 6 7
500.00 500 550 450 500 $1,000
...
542.00 582 640 524 416 $958
488.00 582 640 524 add 36 416 $904
576.00 600 660 540 380 $956
600 660 540 380
page 39
Bet #14: Looks like it’s “firing” time again. The bet is $58 and results in a winner.

1 2 3 4 5 6 7
500.00 500 550 450 500 $1,000
450.00 500 550 450 500 $950
405.00 500 550 450 add 45 500 $905
...
423.00 524 576 472 add 49 533 $956
425.00 548 603 493 add 68 484 $909
542.00 582 640 524 416 $958
488.00 582 640 524 add 36 416 $904
576.00 600 660 540 380 $956
634.00 600 660 540 380 $1,014
600 660 540 380
The Current Bankroll has hit a new high, the portfolio is slightly ahead in the total
value column (where it counts), and the advisor is screaming to “bet it back.”
Bet#15: The player makes his largest wager ever, $63 and wins.

1 2 3 4 5 6 7
500.00 500 550 450 500 $1,000
450.00 500 550 450 500 $950
405.00 500 550 450 add 45 500 $905
...
425.00 548 603 493 add 68 484 $909
542.00 582 640 524 416 $958
488.00 582 640 524 add 36 416 $904
576.00 600 660 540 380 $956
634.00 600 660 540 380 $1,014
697.00 600 660 540 sub 37 380 $1,077
600 660 540 417
The Current Bankroll stands at $697, which is above the High Window. The HMI
Advisor has ordered a $37 subtraction so the bankroll will level off at $660. The Total
page 40
Value of the portfolio is $1,077,a net win of $77, not exactly an earth-shattering
growth, but profitable non the less.
Lets recap the fifteen race wagers in order to get a clearer picture of just how
well the system did. First, notice that this wagering investor actually bet $781 and
showed a profit of $77,an advantage of 9.86%. In order to appreciate how good this
performance really was it must be compared to the results shown by a flat bettor
during the same series.
HMI Player
# bet result value
$1,000
1 50 -50 $950
2 45 -45 $905
3 45 +45 $950
4 50 +50 $1,000
5 55 +55 $1,055
6 57 +57 $1,112
7 57 -57 $1,055
8 52 -52 $1,003
9 47 -47 $956
10 47 -47 $909
11 49 +49 $958
12 54 -54 $904
13 52 +52 $956
14 58 +58 $1,014
15 63 +63 $1,077
781 +77
advantage=9.86%
The flat bettor made 15 bets of $2 each, a $30 investment. He won 8 of the wagers
at payoffs of $4 (even-money), returning a total of $32. Therefore, he showed a profit of
$2 which represents a 6.67% advantage. Horse Market Investing increased the flat bettor’s
advantage significantly!
page 41
But what about the percentage of bankroll player? Let’s compare to a player betting
10% of bankroll by following his progress through the same fifteen wager series.
10% Player
# bet result value
$1,000
1 100 -100 $900
2 90 -90 $810
3 81 +81 $891
4 89 +89 $980
5 98 +98 $1,078
6 108 +108 $1,186
7 119 -119 $1,067
8 107 -107 $960
9 96 -96 $864
10 86 -86 $778
11 78 +78 $856
12 86 -86 $770
13 77 +77 $847
14 85 +85 $932
15 93 +93 $1,025
1393 +25
advantage=1.79%
First off, note that the 10% bettor only won$25, $52 less than the HMI player’s
$77. But, perhaps more important, the overall advantage was less than 2%, a far cry
from the almost 10% achieved by HMI!
What about the ultimate test? That is, against a player that has computed the opti-
mum bet for this series and gets to wager against the same series. How will the Horse
Market Investing player stand up against him? The result for such a player will be found
in the table below and will surprise you.
Optimum Player $1,000 (6.67% of bankroll)

bet result value bet result value bet result value
67 -67 $933 71 +71 $1,128 57 +57 $913
62 -62 $871 75 -75 $1,053 61 -61 $852
58 +58 $929 70 -70 $983 57 +57 $909
62 +62 $991 66 -66 $917 61 +61 $970
66 +66 $1,057 61 -61 $856 65 +65 $1,035
957 +35
3.66%
page 42
First, let us remember that the flat-bettor had a $2 profit off a $30 investment, an
advantage of 6.67 percent. Since the horses all paid even money this advantage would
also be the optimum bet size (recall that the optimum bet is simply advantage divided
by the odds).
Let us summarize these four different approaches to this series of wagers. Perhaps
something can be learned.
Strategy wagered Result Advantage
HMI Player $781 +77 9.86%
10% player 1,393 +25 1.79%
Optimum Bet Player 957 +35 3.66%
Flat Bettor 30 +2 6.67%
How is this possible? The Kelly Criterion is supposed to be the “final word” on
betting strategies. Is this some form of blasphemic nonsense? I assure you it is not. The
wagering community has just never understood that the Optimum Bet was the best
percentage to bet for a player wagering percentage of bankroll. Its inventor, Mr. Kelly,
never claimed that it was, and always would be, the best wagering strategy ever de-
vised.
Summary of HMI Rules

A.Worksheet Setup
1.Determine the session size, session goal, and bet percentage.
2 Enter 50% of session bankroll under Current Bankroll.
3.Enter 50% of session bankroll under Cash Reserve.
4.Enter amount of Current Bankroll under Invested.
B. Wager-by Wager
1.Compute High Window as Invested times 1.1 and enter it in the appropriate
column.
2.Compute Low Window as Invested times .9 and enter it in the appropriate
column.
3.Determine the bet size by multiplying the bet percentage times the Current
Bankroll.
page 43
4.Add (or subtract) result of play to Current Bankroll.
5.Total Value is computed as Current Bankroll plus Cash Reserve.
6. If the Current Bankroll is greater than High Window, do the following:
a. Compute the HMI Advisor by subtracting the High Window figure
from the Current Bankroll figure. The advice will be to subtract this
amount.
b. Add the HMI Advisor figure to the Cash Reserve figure and write
this amount on the next line down under Cash Reserve.
c. Subtract the HMI Advisor figure from the Current Bankroll to get
the bankroll size for the next wager.
d. Carry the Invested figures down to the line below.
e. Go on to step #9.
7. If the Current Bankroll is less than Low Window, do the following:
a. Compute the HMI Advisor by subtracting the Current Bankroll
figure from the Low Window figure. The advice will be to add.
b. Subtract HMI Advisor from the Cash Reserve figure and write this
amount on the next line down under Cash Reserve.
c. Add the HMI Advisor figure from the Current Bankroll to get the
bankroll size for the next wager.
d. Add 1/2 of the HMI Advisor to the Invested figure and write this
amount on the next line under invested.
8. Since the Current Bankroll is not less than the Low Window and not higher than
the High Window, do the following:
a. Bring down invested, High Window, Low Window, and Cash
Reserve. Leave HMI Advisor blank.
9. Prepare for the next wager by returning to #1.
page 44
3. You Try It
Before moving from beginning to advanced Horse Market Investor, an other ex-
ample is in order. This time we will track a single-horse win bettor for a few races.
Using the rules from the previous two pages, try to follow along. Once again, we will
start with $1,000,putting $500 in both Current Bankroll and Cash Reserve.
1 2 3 4 5 6 7
500.00 500 550 450 500 $1,000
Bet#1: The bet is $50 and is lost. The worksheet looks like this:
1 2 3 4 5 6 7
500.00 500 550 450 500 $1,000
450.00 500 550 450 500 $950
500 550 450 500
Bet#2: The bet has dropped to $45 and is lost again.

1 2 3 4 5 6 7
500.00 500 550 450 500 $1,000
450.00 500 550 450 500 $950
405.00 500 550 450 add 45 500 $905
522 574 470 455
Bet#3: The Current Bankroll dropped to $405 and was brought back up to $450,so
the bet is $45. It is a winner, which pays $6.00,resulting in a $90 profit.
page 45
1 2 3 4 5 6 7
500.00 500 550 450 500 $1,000
450.00 500 550 450 500 $950
405.00 500 550 450 add 45 500 $905
540.00 522 574 470 455 $995
522 574 470 456
Bet #4: The bet is $54, which is lost.

1 2 3 4 5 6 7
500.00 500 550 450 500 $1,000
450.00 500 550 450 500 $950
405.00 500 550 450 add 45 500 $905
540.00 522 574 470 455 $995
486.00 522 574 470 455 $941
522 574 470 455
Bet#5: The bet is $49,and is lost. After the fourth loss in five races, the HMI Advi-
sor opts to add $33 in order to bring the bankroll back up to the $470 Low Window.
1 2 3 4 5 6 7
500.00 500 550 450 500 $1,000
450.00 500 550 450 500 $950
405.00 500 550 450 add 45 500 $905
540.00 522 574 470 455 $995
486.00 522 574 470 455 $941
437.00 522 574 470 add 33 455 $892
538 592 484 422
Bet#6: The bet is $47 and results in a $12.00 winner. The profit of $235 brings the
Current Bankroll to a new high of $705,well over the High Window. The HMI Advisor
reacts to this one-race “rush” of cash by playing conservative and stashing almost half
of it.
page 46
1 2 3 4 5 6 7
500.00 500 550 450 500 $1,000
450.00 500 550 450 500 $950
405.00 500 550 450 add 45 500 $905
540.00 522 574 470 455 $995
486.00 522 574 470 455 $941
437.00 522 574 470 add 33 455 $892
705.00 538 592 484 sub 113 422 $1,127
538 592 484 535
Bet#7: With the Current Bankroll at $592, the bet is $59 and results in a $6.00
winner. The additional $118 profit brings the Current Bankroll back to over $700.Once
again the advisor keeps the Current Bankroll level at $592 by transferring money to
Cash Reserve.
1 2 3 4 5 6 7
500.00 500 550 450 500 $1,000
450.00 500 550 450 500 $950
405.00 500 550 450 add 45 500 $905
540.00 522 574 470 455 $995
486.00 522 574 470 455 $941
437.00 522 574 470 add 33 455 $892
705.00 538 592 484 sub 113 422 $1,127
710.00 538 592 484 sub 118 535 $1,245
538 592 484 653
Bet#8: The bet is $59 again and is lost.

1 2 3 4 5 6 7
500.00 500 550 450 500 $1,000
450.00 500 550 450 500 $950
405.00 500 550 450 add 45 500 $905
540.00 522 574 470 455 $995
486.00 522 574 470 455 $941
437.00 522 574 470 add 33 455 $892
705.00 538 592 484 sub 113 422 $1,127
710.00 538 592 484 sub 118 535 $1,245
533.00 538 592 484 653 $1,186
538 592 484 653
page 47
Bet#9: After that loser the bankroll dropped and the next wager was $53. Again, a
loser, and the Current Bankroll drops just under the Low Window, causing a small
replenishment of capital.
1 2 3 4 5 6 7
500.00 500 550 450 500 $1,000
450.00 500 550 450 500 $950
405.00 500 550 450 add 45 500 $905
540.00 522 574 470 455 $995
486.00 522 574 470 455 $941
437.00 522 574 470 add 33 455 $892
705.00 538 592 484 sub 113 422 $1,127
710.00 538 592 484 sub 118 535 $1,245
533.00 538 592 484 653 $1,186
480.00 538 592 484 add 4 653 $1,133
540 594 486 649
Bet #10: Although the advisor added a little to the Current Bankroll, the bet con-
tinued to decrease. This time the bet is $48 and results in a loser again.
1 2 3 4 5 6 7
500.00 500 550 450 500 $1,000
450.00 500 550 450 500 $950
405.00 500 550 450 add 45 500 $905
540.00 522 574 470 455 $995
486.00 522 574 470 455 $941
437.00 522 574 470 add 33 455 $892
705.00 538 592 484 sub 113 422 $1,127
710.00 538 592 484 sub 118 535 $1,245
533.00 538 592 484 653 $1,186
480.00 538 592 484 add 4 653 $1,133
436.00 540 594 486 add 55 649 $1,085
567 624 510 594
There is much to be learned from the ten-race sample shown above. When the
session started poorly with only one winner of the first five bets, the advisor provided a
small influx of cash to keep the bet size up. After hitting a solid priced horse ($12), the
advisor pulled back some profit to build the cash reserves up. When the next horse paid
$6.00, the advisor had socked away enough money to provide a cushion for the upcom-
ing three consecutive losers. After race ten the advisor is ready to ride the entire roller
coaster ride again, sure of grinding out a consistent profit.
page 48
Compare the HMI results to those obtained by the “10% player.” After the one-for-
five start, the “percentage player’s” bet has dropped to its lowest for the $12.00 winner.
Then, after winning bet #7, he makes three very large bets, all losers. The final compari-
son says it all. The HMI player won $85 while wagering $509 for an advantage of over
16%. He actually won almost three times as much money while wagering less than half
as much!
HIM Player $1,000 10% Player $1,000

bet result value bet result value
$50 -50 $950 $100 -100 $900
$45 -45 $905 $90 -90 $810
$45 90 $995 $81 162 $972
$54 -54 $941 $97 -97 $875
$49 -49 $892 $88 -88 $787
$47 235 $1,127 $79 395 $1,182
$59 118 $1,245 $118 236 $1,418
$59 -59 $1,186 $142 -142 $1,276
$53 -53 $1,133 $128 -128 $1,148
$48 -48 $1,085 $115 -115 $1,033
$509 $85 $1,038 $33
advantage=16.70% advantage=3.18%
page 49
4. Adding the Bells & Whistles
What you have learned about the Horse Market Investing system thus far is really
all you must know to use it. But, we are going to add a few features that will give you a
better picture of your wagering situation. Once the system is mastered, the entire pro-
cess is no more than one minute from the start to finish with a hand-held calculator.
However, some users may feel that the “Beginner’s Method” is all they will ever need.
We are going to add these features through some extra columns on our worksheet.
The “full-blown” Horse Market Investing Worksheet can be found on the following
page.
We have added three columns to the left and three to the right. The three columns to
the left make the wagering process a little easier to follow, while the three to the right
are used to chart your relative process.
Remember when you were making additions (or subtractions) from the Current
Bankroll and you had no where to write it? That’s what the Play column is for. It repre-
sents the bankroll available before the wager is made, while Current Bankroll repre-
sents the bankroll after the results have been determined. The Wagered and Results
columns (the names speak for themselves) will allow you to track your advantage (re-
turn on investment).
The Growth Factor is always Total Value divided by the starting session bankroll.
For example, if you started with $1,000 and your Total Value was currently $1,450,the
Growth Factor would be 1.45.indicating 45% growth.
Shares and Price @Share are going to be more difficult. It is through these two
factors that we see the relationship to our wager investing and the stock market. Since
an illustration is the best example, let us follow the sample from the previous chapter.
Notice that we have only added the two columns to the far right, Shares and Price @
Share.
page 50
HMI Advanced Worksheet here
page 51
Current High Low HMI Cash Total Price
Bankroll Invested Window Window Advisor Reserve Value Shares @Share
500.00 500 550 450 500 $1,000 500.0 $1.00
500 550 450 500 500.0
Notice that we started with a Price @ Share of $1.00. Since the Current Bankroll is
$500, we must have 500 Shares. We carried the Shares figure to the second line be-
cause the number of shares cannot change on the first wager.
Bet#1: We bet $50 and lose, leaving the Current Bankroll at $450.
500.00 500 550 450 500 $1,000 500.0 $1.00
450.00 500 550 450 500 $950 500.0 $0.90
500 550 450 500 500.0
The Price @ Share is determined by dividing the Current Bankroll by the number
of Shares. We still have the same number of shares, but they are worth less per share.
Again, we bring down the numbers that will not change.
500.00 500 550 450 500 $1,000 500.0 $1.00
450.00 500 550 450 500 $950 500.0 $0.90
500 550 450 500 500.0
Bet #2: The bet is $45 and is lost. The new Current Bankroll is $405 and, again, the
Price @ Share has dropped. The HMI Advisor has decided to add $45 to the Current
Bankroll, which will necessitate a change in the Shares. It is computed very easily.
500.00 500 550 450 500 $1,000 500.0 $1.00
450.00 500 550 450 500 $950 500.0 $0.90
405.00 500 550 450 add 45 500 $905 500.0 $0.81
450.00 522 574 470 455 ???
Anytime there is an addition (or Subtraction) to the Current Bankroll, simply di-
vide the new Current Bankroll by the Price @ Share to get the new Shares. Thus, we
ave $450 divided by $0.81= 555.6 shares.
page 52
500.00 500 550 450 500 $1,000 500.0 $1.00
450.00 500 550 450 500 $950 500.0 $0.90
405.00 500 550 450 add 45 500 $905 500.0 $0.81
522 574 470 455 555.6
Bet #3: The bet is $45 and is lost. We recompute the Price @Share by dividing the
Current Bankroll by the Shares ($405 / 555.6 = $0.73). Once again there will be an
“add” which will result in a change in the number of Shares. After making the neces-
sary addition, we divide the new Current Bankroll, $470 (504 + 65 = 470) by the Price
@Share to get the new number of Shares, 643.8 (470/.73=643.8).
500.00 500 550 450 500 $1,000 500.0 $1.00
450.00 500 550 450 500 $950 500.0 $0.90
405.00 500 550 450 add 45 500 $905 500.0 $0.81
405.00 522 574 470 add 65 455 860 555.6 $0.73
554 609 499 390 643.8
Bet #4: Bet is $47 and the horse pays $6.00, resulting in a profit of $94. The Cur-
rent Bankroll has reached a level between the two windows. Therefore, there is no
change ordered by the advisor.
500.00 500 550 450 500 $1,000 500.0 $1.00
450.00 500 550 450 500 $950 500.0 $0.90
405.00 500 550 450 add 45 500 $905 500.0 $0.81
405.00 522 574 470 add 65 455 $860 555.6 $0.73
564.00 554 609 499 390 $954 643.8 $0.88
554 609 499 390 643.8
Notice (above) that the Price @Share has been recomputed ($564/643.8=$0.88) as
$0.88. Since there is no change ordered by the advisor, there is no change in the Shares.
Bet #5: The bet is $56 and we get even-money. The $56 profit is added to the
Current Bankroll to bring the total to $620,slightly over the $609 High Window. The
HMI Advisor says subtract $11 and we make the appropriate adjustments.
page 53
500.00 500 550 450 500 $1,000 500.0 $1.00
450.00 500 550 450 500 $950 500.0 $0.90
405.00 500 550 450 add 45 500 $905 500.0 $0.81
405.00 522 574 470 add 65 455 $860 555.6 $0.73
564.00 554 609 499 390 $954 643.8 $0.88
620.00 554 609 499 sub 11 390 $1,010 643.8 $0.96
554 609 499 401 634.4
Notice that we recomputed the Shares by dividing the new Current Bankroll, $609
(620-11=609), by the current Price @ Share of $0.96 to get 634.4 Shares.
What good do these two columns do you? The Price @Share figure represents the
bankroll situatuation for a player betting Percentage of Bankroll! In other words, a
player betting 10% of bankroll would currently be 4% loser after the fifth wager. This is
indicated by the “$0.96,” which is 4% less than the starting Price @Share of $1.00.
Notice, also, that the Horse Market Investing player is slightly outperforming the
“percentage” player. The HMI player’s total bankroll stands at $1,010. Although the
profit is not exactly “mind-boggling,” a 1% profit is better than a 4% loss.
page 54
5. Variations
There are a number of ways to customize the Horse Market Investing system to
better suit your own needs. We have decided to list several of the potential variations
from the basic system, beginning with modifications to the different parameters.
Bankroll-to-Reserve Ratio.
In our samples we used a 50-50-split between the current bankroll and the cash
reserve to start. This does not have to be so. A very consistent, aggressive player may
wish to start with more in the bankroll portion, while a more conservative player may
wish to start with less. Placing too much money in the current bankroll will result in
faster growth because more of the “total portfolio” is in action, but the trade off is a
greater chance of not having funds in cash reserve to add when necessary. On the other
hand, placing too little money in the current bankroll will cut the growth down because
much of the money may never be used. This is especially true of highly consistent
winning players. We suggest that the most conservative player should try a 40-60 ratio
and the aggressive 60-40.
High Window-Low Window Percentages

In our sample, we used a window that was defined as 10% above or below the
invested figure. This was more for illustration purposes than anything else. In deciding
how to set the upper and lower window thresholds, one must take into account the
percentage of bankroll being bet. Once this has been determined, the next step is to
consider the “type” of player you are.
Our experience has shown that the high window should be determined by profit-
ability while the low window should be tied directly to consistency. Consider the chart
on the next page. Each of the boxes represents a “window” for a particular type of
player. The numbers along the outside edges represent units.
page 55
+4 +4
+3 +3
+2 +2
+1 +1
A B C D
-1 -1
-2 -2
-3 -3
-4 -4
Box “A” represents the window arrangement we used in the samples. The “unit”
we used was 10% of bankroll and, therefore, the “high window” was 10% above the
“invested” figure. The top edge of the box represents the high window and the bottom
edge represents the low window. Thus (in the samples) the high window factor was
always 1.10 (+10%) and the low window factor was always 0.90 (-10%). If our base bet
had been 8% of bankroll, instead we would have used 1.08 and 0.92 respectively.
Box “B” represents what we feel is a better ratio for most players. In this instance,
we like 2 units on the high side and 1.5 units on the low side. Consider this the “aver-
age” successful player. Our definition of “average” may be higher than yours. We are
referring to a player that gets between 25% and 50% winners and returns 15-30% profit
per wagered dollar.
As profitability goes up (advantage) so does the high window. Box”C” represents a
player with an “average” win percentage but a higher advantage. This player is more
likely to suffer if we move money from the current bankroll to the cash reserve fund too
often. By raising the high window, we will allow him to bet a bit more back.
page 56
Conversely, as consistency goes down, the low window goes up. By “up” we mean
a greater number of units lost must be allowed for before the “chase” begins. Box “D”
represents a profitable long shot player with a very low win percentage. What window
numbers are right for you? Look at the table below for some good starting points.
R.O.I. Pay pct. High Window Low Window

over 30% over 50% 3.0 1.0
25-50% 3.0 1.5
less than 25% 3.0 2.0
15-30% over 50% 2.0 1.0
25-50% 2.0 1.5
less than 25% 2.0 2.0
less than 15% over 50% 1.5 1.0
25-50% 1.5 1.5
less than 25% 1.5 2.0
Reassessment Period
In all our samples, we reassessed the bankroll situation after every wager. For some
players this will not be the best approach. For a very consistent, high profit player,
adjusting the bankroll situation after every third wager will likely produce greater long-
term growth. The drawback is that when things get “choppy” he may find himself “tread-
ing water” instead of grinding out a consistent profit. Some players may prefer to adjust
daily. Players that do not wish to bet a specific percentage of bankroll on each play may
opt to adjust their bankroll weekly. The principles do not change. Even the “crushers”
run hot and cold on a periodic basis. Simply choose the period that is right for you.
Leveraging
Stock market participants enjoy the luxury of “playing on margin.” Briefly, this
means using credit to purchase stock, which is secured by your equity in the stock. For
example, suppose you know of a stock that is “sure” to triple in value over the next year.
You decide that you can afford to invest $5,000,thereby expect to make $10,000 when
the stock triples. Suppose, instead, that you went to a brokerage house that would ac-
cept the $5,000 as a down payment on $15,000 worth of stock and that they would hold
the stock as collateral for the other 10,000. The stock triples and the $15,000 becomes
$45,000. You sell the stock, pay back the $10,000 you borrowed from the brokerage
firm, and pocket $30,000 profit (less the commissions, margin fees, etc.). You have
used “leverage” to make $30,000 instead of $10,000. The catch is that if the value of
page 57
your stock should drop to a point where the brokerage house is “at risk” they will
demand that you produce more funds immediately. If you cannot (or will not), then a
portion of the stock will be sold to satisfy the amount you owe them.
Horse Market Investors can also play on margin. Suppose that you have decided to
play the next session with $1,000,starting with $400 in bankroll and $600 in cash re-
serve. But when it comes time to play you only have $500. You could play “light” in the
cash reserve fund if you so desire. Remember that the money is not actually needed
until the bets are going to be made. If you should win your session, you have won
$1,000, twice what you would have won without the leveraging. But, tread carefully.
This should not be done until you have confidence in HMI, your selection methods, and
your overall ability to win.
When the Cash Reserve is Zero.

At some time, you may find that the HMI Advisor has “ordered” you to add more
money to the bankroll than you have in your cash reserve. There are three options
available to you. First, you can simply add more cash. The second possibility is to allow
the cash reserve to go into a minus state.
In effect, you “pretend” to have the money to add. This will work, but you must
remember to follow the total value column carefully in order to know if the session is
lost.
Instead, we recommend you add whatever is in cash reserve and make no more
adjustments until the next “subtract” order. You will be playing straight percentage of
bankroll until the bankroll has recovered sufficiently to allow for a “subtract.”
page 58
6. The Final Word
Most horse racing enthusiasts attend seminars, read books, and buy systems look-
ing for “The Secret.” By secret, I mean the missing ingredient that will lift them from
failure to success in their wagering efforts. Some of the players are looking for some-
thing-for-nothing, but many are aware that they must improve themselves before win-
ning can become a reality. This is why they read the books and go to seminars.
Many players have done “reasonably” well but still come home a consistent loser.
Our contention is that most of these players have concentrated their efforts upon im-
proving their selection methods and paid little attention to other details. Specifically,
there are two areas that are overlooked, money management and personal success.
By “personal success” we are talking about the development of the traits, habits,
and characteristics of a winner. Although this is beyond the scope of this manuscript, a
few words need to be said. First, winners are winners, whether they run a furniture
store, pump gas, or wager on horse races. If you mismanage your life (i.e. can’t get
along with other people, constantly at war with your family, can’t pay your bills be-
cause you overspend) you will probable mismanage your horse racing “business” as
well. You must correct these problems before you win at the races. Every successful
wagering investor that I know has a very “together” life. Perhaps there are exceptions to
this, but I don’t know of any.
If your life is in order, your selection process is even marginally profitable, and you
have a practical method of money management, you are ready to win. Horse Market
Investing can provide the money management element, but you must provide the other
two.
page 59
page 60

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page 1

You hold in your hands the most powerful overall

Optimum Bet = Advantage/Odds

Test 1: Betting 10% of bankroll

“One can turn a positive expectancy

Test 4: Wins come first

No appreciable difference. The slight difference of $1 is due to rounding in the bet

Test 5: Betting 5% of bankroll

Again, we see a slight difference due to rounding, but no appreciable difference.

Bankroll Projection Worksheet

Keystrokes Display Reads Explanation

1.04976^4 =20 race projected growth

Keystrokes Display Reads Explanation

Test 1: Betting 10% of bankroll

Take a good look at the summary

526 53 $6.00 +106 580 58 $6.00 +116

-10 -14 -14 -12 -12

-25 -20 -20 -22 -22

“When riches come, they come so quickly

“Suppose you get together every Sunday during the football

Gamblers Ruin Worksheet

Units Ruin Win%

Looking at a game with a slight disadvantage in this manner illustrates why it is so

Units Ruin% Win%

“Session play is a very powerful method

gam-ble (gam’-bel) v. 1. To risk or bet something of

in-vest(in-vest’) v.t. 1. To commit or use (money, capital,

Funk& Wagnalls Standard Desk Dictionary

HMI Beginner’s Worksheet

HMI Beginner’s Worksheet

HMI Beginner’s Worksheet

HMI Beginner’s Worksheet

HMI Beginner’s Worksheet

HMI Beginner’s Worksheet

HMI Beginner’s Worksheet

HMI Beginner’s Worksheet

HMI Beginner’s Worksheet

HMI Beginner’s Worksheet

HMI Beginner’s Worksheet

HMI Beginner’s Worksheet

HMI Beginner’s Worksheet

HMI Beginner’s Worksheet

Optimum Player $1,000 (6.67% of bankroll)

Summary of HMI Rules

Bet#2: The bet has dropped to $45 and is lost again.

Bet #4: The bet is $54, which is lost.

Bet#8: The bet is $59 again and is lost.

HIM Player $1,000 10% Player $1,000

High Window-Low Window Percentages

R.O.I. Pay pct. High Window Low Window

When the Cash Reserve is Zero.

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