30th March 2001 - issue 3

Sometimes a bet comes up where the value appears so good that you are tempted into betting more than you know you should. The problem with a one off big bet is the amount of damage that will be done to your bank if you lose. Take the example of tossing a coin, where the odds are obviously evens either way. If your opponent was prepared to offer you 5-4 on a £10 bet you would happily bet all day knowing that your statistical advantage will come through and you will end up winning well. However, say half way through the day your opponent suggested upping the stakes for the next toss of the coin to £10,000. He will still give you 5-4 but it will be a one off bet. You still have the statistical advantage, but on a one off bet there is no time for this advantage to come through. If you lose and there is an equal chance you will, you find yourself in an irrecoverable situation. The fact that you would have won a greater amount than you lost is of no relevance, or comfort.

It's the same with a disciplined approach to bookie free betting. If you place enough bets at odds with a statistical advantage this in the long term will translate to profits. However if you get tempted by the occasional big money bet then all your good work can be undone and many weeks or months steady growth wiped out in one reckless moment. You need to set your stakes at such a level that your bank can cope with the occasional losing streak.   Opinions vary as to what level this should be, but its probably fair to say that you should never risk more than 5% of your bank on even the safest bets. 

As well as finding yourself over exposed to a particular outcome through greed and impatience it can also happen through carelessness, as happened to me in the Australian Grand Prix. My research indicated that Mika Hakkinen had a good chance of getting the fastest lap, so on flutter I offered to back this, as well as offering to lay Michael Schumacher against driving the fastest lap. For good measure I also sought to back Hakkinen to get a podium place. In all I offered 13 bets expecting perhaps 4 or 5 to be accepted. In the event all 13 were accepted resulting in an exposure far greater than I expected. The big problem with these bets was the fact that I would almost certainly lose all my bets if Hakkinen retired. This is exactly what happened and I lost all the bets. This was a major blow for me and the losses from this will probably take 3 or 4 weeks steady and disciplined betting to recover. There have been a small number of bets where the gambler inside me has come out and I have bet far more than I should have done. Typically, in almost every case I have lost the bet!

The lessons I would pass on from these experiences would be:

Stay disciplined. If you spot a bet which seems to offer exceptional value seriously consider the downside if you lose. If you lose big, then your remaining bank is much smaller which restricts the amount you can bet, making it very difficult for you to get back on an even keel.

Flutter now has a facility where you can place the same bet many times at once. If you do this you must assume that they will all be accepted. In my experience the only time when they are all accepted tends to be when the odds that I have offered are too good. This can result in you being over exposed and at unfavourable odds. A solution to this is to offer perhaps two or three bets at the price you want, then more at even better odds to yourself, which means that if all bets are accepted, at least it is at prices with which you are very comfortable.

If for whatever reason you do suffer a big loss never chase your losses. Work out a disciplined recovery plan and stick to it, otherwise you could end up losing the whole of your bank.