One difference between the previous card game scenario described in Part 2 of our Sports Handicapping And Money Management series and sports wagering is that while there was only one betting event at a time at the card table, there will quite often be multiple sports investment opportunities available at the same time.
After determining that 2-5% of current bankroll is the PRO INFO SPORTS “Peak Profit Percentage” to wager per event as detailed in “Sports Handicapping And Money Management – Part 3”, we resolved the question of how many such events would be financially prudent to wager simultaneously. It was calculated that putting to work up to 25% of a bankroll at one time on a consistent basis offers the greatest potential for compounding profits without being unnecessarily risky if enough worthy investment opportunities are available.
Due to the sharp sports odds put up by the linesmakers, the majority of selections will be made from the lower half of the STAR RATING SYSTEM scale. We use this to our advantage by employing the multiple lower-rated selections as hedge investments against the few higher-rated selections and vice-versa. The Money Plays that risk a higher bankroll percentage are properly balanced by sports handicapper the more numerous lower-bankroll percentage investments. The following gaming analogy demonstrates the importance of such a strategy:
Don’t Lose Your Marbles
Imagine 7 barrels, each containing 1000 marbles. The first barrel has 600 marbles marked “WINNER” and 400 marbles marked “LOSER”. Each successive barrel has 10 fewer WINNER marbles and, thus, 10 more LOSER marbles. The last barrel would have a slimmest majority of WINNERS (540) and highest number of LOSERS (460).
As in sports handicapping and gaming, the object for a player is to win as much money as possible in the shortest amount of time by wagering on and selecting WINNER marbles.
To truly imitate wagering conditions we must also stipulate that the bettor is allowed incrementally more wagering chances with the barrels that contain a higher percentage of LOSERS. We can use the Peak Profit Percentage principle to determine what the proper bankroll wager would be for each of the barrels, which is what we have done with our STAR RATING SYSTEM; however, the question remains of how many bets to make on each barrel.
The proper PPP on the barrels with 60% WINNERS should be wagered as often as allowed by the rules; however, while there is a 60% chance that the first marble selected from that barrel will be a WINNER, there is also a corresponding 40% chance it will be a LOSER. If a total of only 10 marbles are allowed to be taken from the barrel, 60% of them “should” be WINNERS; however, 10 marbles out of 1000 is a scant 1% sample and any combination of WINNER and LOSER marbles is quite possible.
To increase the chances of drawing the same percentage of WINNERS as actually exist in any of the barrels, a higher number of marbles must be drawn. If the number of marbles allowed to be selected increase successively from the barrel with 60% WINNER marbles to the barrel with 54% WINNER marbles, so must the wagers. If 900 marbles are allowed to be selected from the barrel containing just 540 WINNER marbles, a winning advantage very close to 54% is nearly guaranteed.
The greedy bettor will “play the lottery” with only the few marbles he gets to select from the barrel with 60% WINNERS and hope he gets lucky with high bankroll bets. This is like a sports gaming investor who only plays a highest-rated play or 2 each week.
Meanwhile, the risk-adverse bettor will wager the minimal amount on all of the marbles and have to be satisfied with a very small profit. This is like a sports gaming investor who will only play a very small percentage of bankroll over many games each week.
The balanced investor will implement the best of both strategies, using the proper PPPs to make higher bankroll percentage wagers on a select few games and lower bankroll percentage wagers over a greater number of games.