This article is adapted from the original, published in Smartsig magazine in Britain. Malcolm Smith is a highly-regarded form analyst there.

I see racing mostly as an investment medium and in an area which I find most interesting and enjoyable. The romance and the character of the sport makes it all the more fascinating ?and this is one of the reasons why I have no interest in dog racing; I can’t stand the things.


My ?aim is to make consistent profits and I do this by having a set of investment rules to follow.

Here’s a rundown on how I operate:

1. PLAN YOUR SELECTIONS
This goes without saying; all investments should be thought out from the start and planned carefully.

2. KEEP RECORDS OF YOUR BETTING RESULTS
Use a notebook, a spreadsheet or an application to keep track of what you have selected and how it ran. Can you see a trend appearing? For example, do the 1000m sprints return more or less than the 1600m races?

3. KEEP A POSITIVE ATTITUDE
The nature of the game is that not every bet will be a winner. This means, statistically, a losing run will occur. Depending on one’s strategy the lengths of the losing run will vary, i.e. those whose strategy is to be in the 7/2 and 4/1 market ought to have smaller losing runs than those chasing the 16/1 and 20/1 outsiders.

4. DON’T MIX ACCOUNTS
The best way not to gain any long term profits in this game is to use your normal day-to-day bank account for racing. Use a totally separate account (I use a different branch for my racing account) and have a second wallet. The two should not mix. This means that any winnings won’t be squandered on spending sprees and they won’t be there to protect you from any losing runs. From time to time, don’t be frightened to withdraw money from the racing account but only do this as a conscious decision and not as an accidental occurrence.

5. CONTINUALLY AIM TO SET HIGHER INVESTMENT STAKES AND HAVE A GOAL
As profits grow, which they ought, try to increase the staking unit. As a rule I have about a 2 per cent staking plan which means that if I had $1,000 in my accounts (both bank and the bookies) then I’d be placing $20 bets. Aim to increase the stakes. Have a goal in mind. My personal aim is to buy a house using cash in London next summer. What’s yours? Without anything to aim for you can be like a rudderless ship on the ocean.

6. DON’T BE AFRAID TO BACK ODDS-ON HORSES
If you feel that a horse has an 80 per cent chance of coming home then don’t be afraid to back it at 1/2.

7. HAVE A ROUTINE
Make sure that you and, more importantly, the family, understand that you may need an hour or two in the evening to choose the horses for the following day. Make sure ?they know that you are not to be distracted. Make a daily routine and focus on the job. When this time comes it’s time for some hard cold decision-making for tomorrow’s investment.

Make sure that you work in an appropriate environment; reading the following day’s form ?in an overcrowded train is not the place to make a reasonable investment decision.

8. A FREE TIP IS WORTH WHAT YOU PAY
Use your own judgement and your judgement alone. If some other fellow tells you that he has heard a whisper, ?ignore him. If a horse doesn’t fit in with your investment plans then ignore it. If you use the opinions of others then make sure they talk sense and give consistent opinions from day to day, from week to week, and, above all, only follow these people’s opinions if they are deemed to be trustworthy and profitable. Only one person can judge these people – yourself.

9. NEVER HAVE A BET BECAUSE OTHERS AROUND YOU ARE
You have made your decision the night before and have a list of the three races in which you are going to make your selections. You settle down on the sofa watching the racing. The race you are about to watch isn’t one of your three races. However, it seems that the punters on the course “know something” and are piling onto a horse driving down its price. The last thing you should do is pick up the phone and join in. If the horse is not on your list then just sit back and watch the race unfold. It could quite well be a false signal.

10. YOU LEARN NOTHING FROM WINNING
I have had some awful runs in the past. I had one around last season and during June/July of this year. All of a sudden things stopped working and nothing I selected was in danger of occupying the winner’s enclosure. I took the time to dismantle the systems and the models to see what was happening. What caused these problems, and where was my model going wrong? I also dismantled and cleaned up every record in my database to make sure it was correct. At the end of each time, my systems improved in leaps and bounds and I’m doing a lot better than this time last year. This is what I did. What do you do when your 10th “dead cert” fails to come home?

Squeezing a few percentage points of error out of your methods is worth thousands in the bank. Remember, anyone can back a winner; the trick is to back winners consistently and to know how one is doing it.

11. SELF CONTROL IS EVERYTHING
If you end up in a losing run – and remember, statistically you will – the first thing to do is not to panic. Sit down calmly and work out by going through your logs to determine where you are going wrong. Have a look at the systems (rule 10). At the end of the post-mortem you may decide that nothing is fundamentally wrong. If this is the case don’t panic, keep cool and when it comes to making a decision for the next day’s racing don’t let the previous losers influence your decision. Keep rational and keep every selection independent of each other.

12. NEVER HAVE MORE THAN TWO BETS AT THE SAME MEETING
I have developed a rule which states that I now no longer have more than two bets at the same meeting. If the ground changes I don’t want to be overly exposed with having a few hundred dollars on each of five races at the same meeting.

13. NEVER HAVE A “CELEBRATORY” BET
Never decide that if at a certain point you are well up then you’ll have a punt on a later race. Either this later race is a selection or it is not. Keep every selection independent of each other. On a similar point, don’t have this last bet to try to recoup some of the losses of the day. Stick to the day’s plan and do not deviate from it one iota.

14. EXPECT TO HAVE LOSSES
When you lose accept this fact gracefully. Do not dwell on it or become angry or upset because this will certainly cloud your judgement and will make things worse.

By Malcolm Smith

PRACTICAL PUNTING – DECEMBER 2006