Last week on the podcast Nick Pinkerton answered questions from our members on how to get started as a serious punter including skills, lifestyle, mindset and form analysis.
In part two of our chat (below) Nick focuses on how, when and where to place a bet and also how to manage your money.
- His preferred staking plan
- How to deal with rising and shrinking banks
- The reason why he never bets quaddies
- How he has a much more balanced lifestyle than ever before
David Duffield: I want to move on to the bet placement and staking money management. We had a bunch of questions in this one. The first one was “How can I make money out of exotics?”
Nick Pinkerton: Look that’s a conversation for another day. Exotics are tricky. I don’t play exotics, I’m a win only punter. I don’t bet each way. I literally bet win only. My own perspective, I’ve got that much respect for punting. I find it hard enough to back a winner, never mind point 1, 2, and 3 in a race or even find 4 winners of a quadrella. What I will say on the subject though is Daniel O’Sullivan opened my eyes once about 10 years ago to the chances of winning a quadrella and it struck me like a brick and I’ve never forgotten it.
If you talk even money about winning every leg of a quadrella, you still only going to win 1 in 16 quadrellas. I was like that’s amazing.
You mean if I back 50% of winning chances in every race, it’s only going to be a $16 chance. If you do the maths that’s right, 50% by 50% by 50% by 50%, comes out at $16.
That’s when I went too hard for me, I think I’ll leave that alone. I’ve got a similar philosophy about exotics, so there’s plenty of better people you could ask if you don’t me passing on that one.
David Duffield: Not at all. How do you determine the true odds for a horse to finish in a place?
Nick Pinkerton: Again, depends on, look, there’s a mathematical way of doing it, and then there’s other ways of doing it which are a little bit more artistic again. It’s again the art versus the science.
If you’re talking about backing the second or third favourite against the favourite you believe is totally undervalued, then the true mathematical odds are not going to represent the full opportunity as if it was the other way around. I think stick to the mathematics of it, but understand that there are opportunities to shift slightly over and slightly under from that.
David Duffield: Do you have a minimum price? This is a new question, not to do with the place, do you have a minimum price, say $1.50 where you won’t bet under that or do you just look at value?
Nick Pinkerton: Yeah, I would never back anything under $1.50. I have backed $1.35 at once and was in a 2500m race and I just didn’t enjoy the experience.
David Duffield: Did it win?
Nick Pinkerton: It did win. It was Faint Perfume in the VRC Oaks. It might have been $1.35 actually, but didn’t win by much either, I might add, but enough. I just didn’t enjoy it.
I think what happens when I start playing at that end of the marketplace, I start thinking about how I’d feel if it got beaten, and I start to lament the position I put myself in. Yeah, absolutely, just from a personal mindset point of view, and being able to control my confidence levels, I definitely have a minimum price.
David Duffield: What about getting the best price? It came up a few times. Someone’s got here, “knowing when to bet early or when to wait,” another person wrote “deciding the right moment to put your bet on”, so how do you try and read the market?
Nick Pinkerton: It’s got a lot harder since markets have opened on Wednesdays. Obviously, this would have been a very different question 5 years ago, before we had such activity from Wednesday through to race day, but I personally use Dynamic Race Odds.
I’m happy just to have a group of bookmakers there who I believe represent times when markets are likely to move and I just monitor horses on there until such a point as I feel it’s time to move. Do I get more right than wrong? Yes, but do I get plenty wrong? Absolutely.
I think it’s one of those things that over the course of time, you just have to run with. On a Saturday, if you’re looking at the horse’s prices at 9, 9:30 in the morning, and you haven’t had a bet in the race yet, but you don’t know whether to take that price that’s available at the time or not, definitely look at best of the best options and all those best odds guarantees if you can. It makes sense that if you’re not happy to take fixed odds, fixed price then, well, something to do with top fluc or best tote is definitely going to be a reasonable outcome.
David Duffield: What about getting a bet on? How do you about trying to stay alive with the corporates, and just being able to get a reasonable amount on when you do want to get involved?
Nick Pinkerton: Getting a decent bet size on has become a real struggle, as I’m sure everyone of your listeners will understand. I think the key to all is dribbling a bit on spread your bets across a whole range of bookmakers. Don’t put all your eggs in one basket. Don’t try and get egotistical about firming things. Just try and leave all emotion and ego aside and just be as under the radar about your activity as you possibly can.
Personally, I don’t understand why the corporate bookmaking model is the way it is today?
Why would you want to close the account of a winning punter, only to find out a month later he’s been using some bowler and taking you for another ride? Wouldn’t it make much better sense to make a phone call to him and say listen, you’re too hard to beat, but I’m not going to break you. I’m going to bet you the odds to win such and such. Everyone knows where they stand, the corporate bookmakers still get to see your flow, and we can all go on with our business. I know what my limits are going to be at every joint, and I just know obviously now I can pick a sequential order who I’m going to go to first, second, third, etc.
I won’t mention who, but I once had a corporate bookmaking account through which, I opened and for about the first 6 weeks I did nothing but lose. I was about $25,000 in the hole to this account at the time, and there was a day, it might have been Victoria Derby Day, 2012, I think it could have been, and they were betting $71 about a horse that was $51 in the ring. I asked them for $500 straight out on it. They bet me. Of course it won. It’s $35,000 to $500, and within a minute, I was barred. I couldn’t have another bet.
How on earth do you run a business like that? You let someone do $25,000 in 6 weeks. You go up 70’s on a 50’s chance, I have $500 on it, and that’s it. You’re barred. You’re finished. Just didn’t make any sense to me. It’s a disgraceful practice, and you’ve just got to do the best you can to stay alive and spread your bets.
David Duffield: A lot of questions about staking. “What staking plan do you use, and what are your risk versus return rules?”
Nick Pinkerton: As far as staking is concerned, this is the thing that got me into the most amount of trouble in the 5 months I was having a losing trot. As I said, once I stepped away, Caulfield Cup Day last year and looked back at it, I realised that’s where I was making my biggest mistake. I just didn’t adjust where I needed to.
As I was bringing in new variables, I was backing more horses in a race, and just didn’t compensate appropriately.
I think the best staking strategy long-term is to bet to collect a certain percentage of your bank. Depend on your confidence level edge and some other factors. I think somewhere between 2.5% and 5% is probably common practice. For me, I use something even a little bit more simplistic than that.
I tend to group horses into price ranges and bet a certain number of points. Which is again very similar to a percentage of my bank. Just depending on what price bracket the horse is in. The most important thing to remember is 2/1 chances will win more than 4/1 chances and 4/1 chances obviously win more that 10/1 chances. You’ve got to have a staking methodology that recognises that appropriately.
You can’t be betting level stakes in my mind.
David Duffield: What’s your view on proportionate staking as opposed to escalator betting, and how and when do you choose one over the other? By escalator I mean level stakes, but the stake increases as the bank increases, but never decreases.
Nick Pinkerton: Escalating and diminishing banks are interesting.
I think my best advice on that is if you stick to collecting a certain percentage of your bank, and you stick with that as your bank rises and falls. Now I don’t mean necessarily in every little increment, but if you start with a $10,000 bank, you might say OK when it gets to $15,000 I’m going to increase my bet size. Or when it gets to $7,500 I might decrease my bet size. You don’t need to do it every day, but if you were to do it every day that would solve the problem of it escalating and diminishing bets.
I just look, what’s my styling bank at the beginning of the day. OK, what percentage am I going to back a horse to collect, what percentage am I looking to collect from my bank and go with that. If the bank’s $11,000, it’s that percentage, if it’s $10,000, that percentage.
David Duffield: This question is about bankroll growth. How do you access your winnings to use as a steady income, withdraw from accounts or laying true exchanges or copying commission? Also, after a successful run of winners, how do you keep the money and then continue with the build up of winnings? My bank has grown more than 4 times over the last 6 months, but I’m still betting at the same level per unit as I did at the start. At what point should you look to up your betting stakes?
Nick Pinkerton: Well that’s an excellent effort.
David Duffield: That’s a nice problem to have.
Nick Pinkerton: Yeah, it’s a great result. I think this comes right back to the very basics we talked about at the very beginning of this call.
What’s your plan?
Is your plan to bet so that you can build the bank big enough so that one day you might be able to rely on it for income? Or is your plan to bet so that you might be able to take your family away on an annual holiday at Christmas time? Is your plan to bet to get an extra mortgage repayment in every year?
What is the plan?
If you’re lucky enough to be able to quarantine some cash and say, all right, there’s my $10,000 starting bank, and I’m going to grow this as hard as I can for the next 5 years without taking anything out of it, such as your client has got 4 times growth?
Then that’s probably the best scenario, and in the event that you’re getting that sort of growth, you should definitely be increasing your stakes. If you’re betting to collect a certain percentage of your bank, you would have been doing that, and that 4 times growth would probably be significantly higher now.
The key to betting, obviously is that with punting you can make your money work much harder than a traditional investment will, because you’re going to turn that upfront capital over multiple times every week, month, and year.
You want to be maximising your opportunity if you’ve got an edge and you’re a profitable punter and you’re growing your bank, increase your bets to reflect the growing bank size. Leave what you can in there, so that you can leverage off the extra return from the growth in your bank.
David Duffield: Another good question is: Establishing bank size and unit bet size when using several different betting strategies at the same time, I have a $20,000 betting bank, with 3 different, independent strategies, betting the ratings, the New Zealand tips and the Sports Predictor service. Should I be using $20,000 bank for each strategy, so one unit amount terminology is $200? Or dividing the bank into 3?
Nick Pinkerton: I think you should be using 3 different banks for 3 different strategies. Would you agree with that?
David Duffield: That’s the way we recommend it to people. There can be… the beauty of having 3 strategies is it’s highly unlikely that all 3 all going to have a big drawdown at the same time, so you can have some diversity there, but for full bankroll protection, you really need to have separate banks for each strategy.
Nick Pinkerton: Yeah, particularly when they’re unrelated like that, given they’re sports, New Zealand, and Australian products. Three banks makes sense.
David Duffield: OK. Do you play the multi-s?
Nick Pinkerton: No.
David Duffield: That was short and sweet and the answer I expected. Do you ever stop because you’ve won enough for the day?
Nick Pinkerton: No. I think that’s really important. Why? The first 6 races have gone well, should the results of races 7, 8, and 9 be any different? It’s-
David Duffield: Also we don’t judge our results on a day anyway. People like to and you can fall back on that subconsciously, but we look at a monthly approach just because it helps you deal with the ebbs and flows and as far as it going away or not. Day by day is not really something that we measure other than we have to in that we report the results on the website.
Nick Pinkerton: Yeah, absolutely right.
There’s nothing harder to deal with than a day where you’ve gotten off to a flying start and you’re having a personal best after race five and you end up square or slightly in front or heaven forbid, slightly behind.
It is hard to deal with, but it’s just how it is. There’ll be other days when you’ll get off to a shocking start, you’ll get out and finish just in front, and if you’d stopped after the shocking start you would have got the other results.
I think the most important thing here is the last race never comes and really, end of day, end of month, end of quarter, or end of year. They’re just accounting periods. The only reason we put a line in the sand is so that we can actually get some indication of how we’re going and form some evaluation on what we’re doing and what we might be able to do better. If not for that, I wouldn’t recommend any bet ever being different on the basis of an outcome that’s already happened.
David Duffield: I agree. Now, last thing I wanted to cover was the work life balance. Someone has written here and said, “managing time, family, work, and punting, how do you do it?”
Nick Pinkerton: Chronic, it’s absolutely chronic. Particularly with video work, it’s one of the hardest things to stay on top of because as soon as you take a holiday, you’ve got a backlog of work to get on with, and of course you came to get back on with the pre-race and the betting side of things, rather than the post-race and database maintenance. It’s really tricky.
In my case, I’m a father, I’m a husband, and a father of 4 children. They’ve got used to that lifestyle but it’s a disciplined approach everyday. This has got nothing to do with racing, but it’s probably going to help people, or I hope it helps people.
Every day I have a plan for what I want to achieve for the day. The first thing is life. I make sure my wife’s got what she needs to have what she wants done in the day, my children have what they need to get done what they need to get done in the day, then I structure my activities, then I make sure the last thing I do every day was go back and deal with life issues again. If you just get your head into what I’m doing and don’t pay any attention to what the wife and children want, it ends up in tears.
The other beautiful thing about what I do is I’ve got flexibility in terms of time. Saturdays are obviously Saturdays, Wednesdays are Wednesdays, but the rest of it, you can do your replays over 5, 6, 7 day period. It’s not like they have to be done at a certain point in time, so if I’m up at midnight, trying to finish a workload for a day, because I’ve had to spread myself across the family, then that’s one of those things I have to do. It’s a much better option doing things that way, than getting things done and finding out that everyone else is just pulling their hair out.
David Duffield: Great answer. We’ve covered, getting started, lifestyle and mindset, form analysis, bet placement, staking, money management, it’s been fairly comprehensive. Was there anything else you want to chat about just before we wrap it up?
Nick Pinkerton: No, the only thing I will say, is I really do want to encourage people that I really do believe, I’m speaking from a personal experience of 20 years, I think people should be encouraged to view punting as a viable alternative form of investment.
I see no reason why they shouldn’t be able to do that if you compare the results you can get from a $10,000 starting bank in punting, using a Champion Picks product or a product of any service provider, if you compare them to what you’d get by giving $10,000 to a managed super fund investment plan, I think you’ll find over 3 year period with appropriate skills and planning and discipline, you can get a much better outcome. I’ll encourage people to do that.
Most important thing is just find a selection or pricing product that works, that you’re comfortable with, but ultimately, chase more pleasure, more profit, more confidence, in what you’re doing, and understand that you can get a return and get extra income and cash from whatever it is you’re trying to do, as long as you follow a plan and stay structured and disciplined.
David Duffield: Good advice. Really appreciate your time, Nick. Thanks for returning to the show and all the very best for 2015.
Nick Pinkerton: Absolute pleasure. Thank you, David.
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