TheSnapper

Current Bank: $1833,60 (+ 826,06% profit)
Start Bank: $198,00

Mr. Kelly's Bank: $1351,43 (+ 6657,15% profit)
Mr.Kelly's Start Bank: $20,00

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A new all-time high for me. A solid day with 4/5 wins for a bank increase of 8,5%.
Mr. Kelly got crushed. He lost 3/5 for a beating of -20,3% of his bank.
So, I've regained first place in the race again!
I withdrew $52,50 from Betfair to send to my reserve bank investments, ("The Demon").
(The Demon now has $930,09 in cash/capital. It has generated $15,67 in profits.)
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TheSnapper and Mr.Kelly's Simple Horse Racing Lay Method in more detail.

There have been many questions from followers regarding the selection methods I use, so I will say a few words today to help clarify things.

First of all, I just want to encourage everyone to search out their own edges. I am not a guru and I don't know all the answers. You can probably find even better strategies on your own. I did, and you all can too! This is just how I do it.

1. Finding an edge

These are the statistics of all horse races run in the UK. I have circled what is relevent for you. The stats show clearly that there is a significant edge in laying horses over 4.0 This is true for all races, field sizes, ages, conditons, etc..This edge is also in the corresponding place market.
This shows you that the Win% SP return is 90% on horses over 4.0. This means that you are going to be 10% poorer backing these beasts at SP. So, obviously, this is the zone you want to be laying in, because you have a 10% edge, just based on the stats.




However, it is not so easy. The Win% SP price is based on the bookies odds, not on Betfair SP. The bookies odds are 5-15% lower, on average, than the Betfair SP. Also, Betfair takes up to 5% commission from your wins as well, so you have to factor that into your calculation.

So what you need to do, then , is to lay at odds as close to the bookies odds (preferably under them) as you can before the race. I often place my lay bets on Betfair at 10% or more below the bookies odds. Often enough, one will be matched. It's kind of like fishing...you dangle a bait and wait for a fish.(My field of speciality!).

Why the place market, not the win market? Well, both markets have the same edge, but the place market is preferred because it has less liquidity. This means it is less efficient, and the edge will be larger.

Anyway, that's the starting point for the laying method. I will continue tomorrow with more on the subject. I'll try and answer your questions as soon as I can, although `I am a bit pressed for time thses days. Thanks for all your interest. Good luck!

Current Bank: $1690,29 (+ 753,68% profit)
Start Bank: $198,00

Mr. Kelly's Bank: $1697,96 (+ 8389,80% profit)
Mr.Kelly's Start Bank: $20,00

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Well, the big guy did it. After starting with a bankroll 10 times smaller than mine, Mr.Kelly has passed me for the first time in the race to Florida. It has taken him 366 bets and he has increased his bank by a massive 8389,80% (that means his bank is 83 times larger than when he started.)

They don't call him the perfect gambler for nothing, man!

So how did he do it? What's his secret? IS he some sort of horse-racing expert? Does he have some hot tips from "the inside"? No, not at all.  All John Kelly has are a large hand gun collection and an understanding of compounding profits. That's all you need (the compounding, not the handguns...)

Current Bank: $1651,02 (+ 733,85% profit)
Start Bank: $198,00

Mr. Kelly's Bank: $1235,08 (+ 6075,40% profit)
Mr.Kelly's Start Bank: $20,00
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I was down -5,3% and Mr.Kelly was down -2,0% yesterday. Some wins, some losses...we just keep banging away. That's the way to do it. Keep at it, follow the plan, be patient...and never look down.
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I just checked to see how the reserve bank investment plan is going. The boys in Amsterdam have achieved a $15,67 profit so far on the capital of $864,54. Keep up the good work, lads!(That's $15,67 more than leaving the money in Betfair).

Current Bank: $1728,58 (+ 773,02% profit)
Start Bank: $198,00

Mr. Kelly's Bank: $1261,17 (+ 6205,85% profit)
Mr.Kelly's Start Bank: $20,00
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Well, Mr. Kelly retreated from his high of $1868,01 after losing three in a row. His bets yesterday were:


Runner                    Stake    Odds    Liability Result

Forgiving Light    $118,60    2,92    $227,71    $118,60
Banksters Bonus    $122,81    3,7    $333,16    $122,81
Feeling Peckish    $53,96    4    $161,88    -$161,88
Galley Slave            $148,36    2,38    $204,74    -$204,74
Theresathingwrong    $109,19    3,2    $240,22    -$240,22

I ended in profit of $57,06, winning 4/5 bets.

Here' s the updated chart. Mr. Kelly's explosive growth shows you the "building logarithmic pressure" of Kelly Staking, which builds and builds as the number of bets rises and then BOOM! It explodes in a frenzy, and then retreats angain. The cycle repeats endlessly.



Why does it go this way? The reason is mathematical and is connected with the law of large numbers. Basically, the Kelly Staking keeps you in the game long enough for the law of large numbers to begin to kick in. Eventually, sooner or later, Mr. Kelly will hit a hot streak and his profits will compound, like he did this week. It will happen again and again over time. Notice that the half-Kelly Staker, myself, has much less variance and a more stable growth, although in the long run it is all but certain that Mr. Kelly will be in Florida before me.
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Current Bank: $1671,52 (+ 744,20% profit)
Start Bank: $198,00

Mr. Kelly's Bank: $1626,60 (+ 8033,00% profit)
Mr.Kelly's Start Bank: $20,00
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Just time for a quick update today. A big day yesterday for both of us:
Mr.Kelly went 4/4 for $408,98 and I went 5/5 for $120,09.

Great stuff from the man from Texas. I will update the charts tomorow for a full update.

Together, we almost have enough for the 4th doubling (we need $3488 combined, we have $3298,12)
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Here's a screenshot from the action yesterday, showing all of the bets Mr.Kelly and I made.

All of them bad horses at bad prices...




...sorry, the graphic came out a bit small. I'll try and update it later with a more zoomed in version if anyone would like.

Current Bank: $1551,43 (+ 683,55% profit)
Start Bank: $198,00

Mr. Kelly's Bank: $1217,62 (+ 5988,10% profit)
Mr.Kelly's Start Bank: $20,00
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I suffered my worst beating yesterday. I lost 3 straight for a total of -$170,45.
Mr. Kelly, however, continued his logarithmic rampage ... winning 3/4 bets for a total of $278,35. It was his all-time best day, and he has a new all-time high of $1217,62

I used to think it was going to be a few months until he passed me, but now I think it is a question of a few more bets!

It is just staggering to see a betting bank increased by 60 times in a few months!

(The Perfect Gambler...I'm glad he's on my side, I just get a bit nervous with all those guns around, and I can't understand half the things he's saying with that Texan accent (y'all).)

Mr. Kelly's bets yesterday:

Runner             Stake    Odds    Liability    Result

Pandoro De Lago    $73,31    3,05    $150,29    $73,31
Approved Force    $80,27    2,64    $131,64    $80,27
Slenningford    $2,00    3,6    $5,20    -$5,20
Mister Matt    $129,87    1,67    $87,01    $129,97

(He was a bit lucky a bit on  Slenningford, only a partial match, which went on to win)

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Current Bank: $1721,88 (+ 769,64% profit)
Start Bank: $198,00

Mr. Kelly's Bank: $939,27 (+ 4596,36% profit)
Mr.Kelly's Start Bank: $20,00

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Mr. Kelly put in a solid 4/4 day yesterday: an bank increase of 36,8%

Runner             Stake    Odds    Liability    Result
Hail Tiberius    $48,81    3,25    $109,82    $46,42
Lupo Doro    $51,57    3,7    $139,24    $51,57
Cobo Bay     $92,28    1,68    $62,75    $92,28
Mayan Flight    $62,62    2,92    $120,23    $62,62

...bad horses at bad prices...
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It is interesting to observe that Mr.Kelly has a growth rate which is 6 times faster than mine! It won't be much longer until he overtakes me completely and leaves me in the dust. This shows you clearly the difference between an aggressive full-Kelly staker and a more conservative half-Kelly staker, using the same betting strategy over around 350 bets.

Is there anyone who would like to bet against Mr.Kelly winning the race? (At what odds?)

Current Bank: $1713,71 (+ 765,51% profit)
Start Bank: $198,00

Mr. Kelly's Bank: $686,38 (+ 3331,90% profit)
Mr.Kelly's Start Bank: $20,00
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I won 3/4 yesterday for a small profit of $19,35. A new all-time high for me of $1713,71, which is always nice.

Runner    Stake    Odds    Liability    Result
Striding Edge    $29,47    3,3    $67,78    -$67,78
Golden Taurus    $29,35    2,94    $56,94    $29,35
Butlers Glen    $27,60    3,4    $66,24    $27,60
Halucha    $30,18    3,65    $79,98    $30,18

Mr.Kelly's hot streak ended. He won only 1/3 races and went down -$137,22

Runner    Stake    Odds    Liability    Result
Ursus    86.69    1.95    $82,36    -$82,36
Wise Old Owl    $63,39    2,52    $96,39    -$96,39
Sir Walter Raleigh    $41,53    3,95    $122,51    $41,53

Current Bank: $1694,36 (+ 755,74% profit)
Start Bank: $198,00

Mr. Kelly's Bank: $823,60 (+ 4018,00% profit)
Mr.Kelly's Start Bank: $20,00

(I withdrew $28 from Betfair and sent it to the reserve bank. The Demon now has $847,58)
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Mr. Kelly has been exploding in a logarithmic frenzy again. He has won 17/18 bets over the past 3 days, for a total profit of $547,47 - a bank increase of 192%. Incredible stuff.

Take a look at the chart. He has taken $20 and turned it into $800 in a series of 335 bets, each time adjusting his stakes up or down to always be risking a fixed percentage of his bank. This percentage ranges from just 5% for laying under 1.10 runners (The lowest he has actually laid was a 1.32 runner)all the way up to 19% for runners up to 4.00.

The truth is that these stakes are "pseudo-Kelly" stakes, because I have put them into price bands for ease of calculation, rather than calculate each runner. They are actually slightly under the "real" Kelly stake, but OK, close enough for my purposes.

It is certainly not for the faint of heart. Mr. Kelly has lost 50% of his bank on  2 occasions so far. This kind of variance is just too hard for most people to handle; even the pay-off of a 40x bank incease isn't enough to convince some gamblers to wait through a bad losing run.

Some followers have said, "well, this might be fine for high strike rates, but Kelly staking doesn't work for low-strike rates. I back 10-1 shots, I'm better off using a fixed stake". Wrong. The Kelly Criterion provides the optimal stake for ANY given betting system, as long as the edge is positive. It also works to protect your bank against losing streaks, and keep you in the game long enough to hit an inevitable hot streak (and for my friend backing 10-1 shots, these losing streaks will be very long indeed). Kelly will provide a long-term advantage, but with such a low strike rate it will take many,many more bets to be seen. The reason is that the low-strike rate prevents rapid compounding, which is at the heart of the Kelly system. So, in the short term Kelly won't help you win more, but it will help you lose less - keeping you in the game.

So, Mr. Kelly has hit an inevitable hot streak, and you can see the rapid compounding effect. It can't last forever, and Mr. Kelly can expect to have a good chance of his bank returning to $400 before climbing to $1600 in the future.

We'll see how far Mr.Kelly can go before he runs into the problem of lack of liquidity in the market, although I see that $1000 bets are being matched rather well...but $10,000 bets will be another story.

Current Bank: $1639,02 (+ 727,79% profit)
Start Bank: $198,00

Mr. Kelly's Bank: $643,06 (+ 3115,30% profit)
Mr.Kelly's Start Bank: $20,00

(I withdrew $15 from Betfair and sent it to the reserve bank. The Demon now has $819,58)
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Mr. Kelly was on a rampage yesterday again. He hit 3/3 winners for a profit of $132,41 (+25,8% increase in his bank).

I went 3/4 for $30,68 (+ 1,9% increase in bank).

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How Charles Darwin can help you make money at gambling.

It occurred to me while I was out on the boat today that nature is kind of like a gambler testing new gambling ideas, searching for an edge. For a gambler, like a species , an edge means survival.

A species changes and mutates, it adapts to its environment and tries to become more efficient in it's edge (food) and compounding its species growth (reproduction). In that sense, a species is like a gambler trying different ideas, looking for edges in the betting market, with the goal of compounding his bank growth. Just like a species in nature.

So we should look at this idea and use it in our gambling. We need to be like nature. Take a small, fledgling bank ...take $100 for example, but any small amount will do, really. Set it up to test your idea for an edge out. In fact, make several small banks for several ideas you may have. (One bank for each idea. Keep them separate. Keep records carefully for each bank. The more, the better, actually...just as in nature). As in nature, not all your ideas will work out. Only the efficient will survive, grow and expand. As they expand, that bank should grow, taking more of your resources (you should apply Kelly staking to each bank to reward success and punish failure). In effect, you use your own competition among your ideas to evolve the best  (most profitable) strategy. The failing strategies will fall by the evolutionary wayside, just as in nature...maybe through a poor edge, incredible bad luck (think about the dinosaurs and the bad luck that hit them!), or just having a better strategy outperform it over the long run.

The idea is that just as in nature there are many succesful evolutionary strategies, in gambling and investing there are also many strategies. You should harness the power of evolution to find successful gambling strategies which work for you. Remember, you only need one successful strategy to evolve. Let your bad ideas go extinct and reward your own evolutionary success.

But remember....start small and be patient. Dinosaurs grew and evolved over 150 million years from tiny lizards! Be patient, like nature and you will succeed.