When your sitting back
In your rose pink Cadillac
Making bets on Kentucky Derby Day
-Townes Van Zant (Rolling Stones)
Each year on Kentucky Derby day, people ask me for betting advice. Each year, I update this column and give it my best shot.
Although there are people more qualified to give Derby tips, like political or financial commentators, I won't let lack of expertise stop me.
My father was a professional gambler and my most recent book, Son of a Son of a Gambler: Winners Losers and What to Do When You Win the Lottery, talks about how I grew up around the rack track.
Each year, I write a column on Derby Day, and if you have followed my advice, you have lost a lot of money. The large fields at the Kentucky Derby throw logic out the window.
I have a system that leans towards favorites and long shots often prevail at the Derby.
The expected bad weather will also change the dynamics. Some really great horses are lousy on mud.
Thus, luck will be a big factor. Betting on a winning horse will be a little like winning the lottery. It will be more a random act than a test of skill
Having said all that, the betting system I tout is a good one. If you go consistently to a track like Keeneland or Gulfstream with good horses and smart bettors, the system works.
Many years ago, I found a book called Racetrack Betting: the Professors ' Guide to Strategies by Peter Asch and Richard E. Quandi.
It was written by two statistics professors and not the easiest book to read. I can sum up the advice in two statements.
1. Bet on the horse that everyone else is betting on. 2. Bet on the horse to show, not to win or place.
The book bases the ability to pick horses on a theory known as the wisdom of crowds.
The wisdom of crowds concept is really popular now. It is a driving force for web sites like Google.
The idea is that marketplace will move towards the best outcome.
If a horse moves from 10 to 1 to 2 to 1, it is probably a good horse to bet on.
Betting to show is a practice that I follow religiously. .
The professors said that betting to show will produce a winner 52% of the time. That is better than any other kind of bet.
The professors hate jackpots like the Pick-6. Just like the lottery, big odds draw a lot of excitement and attention.
Just like the lottery, you don't see many people winning them.
The professors frown on exactas, daily doubles or any bet that exhibits large risk.
Like in the investment world, the winner at the race track is the person with a conservative style and discipline.
The people trading mortgage backed securities at Goldman Sachs or Citigroup probably don't use my system.
When I go to the track, I don't look at the racing form, jockeys, past history or pick horses with funny names. (My mother was a sucker for horses with funny names.) I just follow the odds.
I usually win enough money to pay for lunch.
My father, a professional gambler, absolutely HATED my betting system. He and I would go to Keeneland every session and we never picked the same horse. He would bet $100 on a horse and lose. I would bet $10 and win.
It drove him absolutely crazy.
Dad liked the excitement of big odds and big payoffs. He knew everything about the horse's past performance, their breeding and who was riding them.
Dad was superstitious and started to believe that my system was jinxing him. If dad ever met the professors, he would have punched them in the nose.
I stuck to my system. I stick to it today. Betting to show fits with my overall philosophy about handling money. Slow and steady works in the financial markets and works at the track too.
For whatever reason, my system has failed me at Kentucky Derby's. The last one I remember winning was Sunday Silence in 1989. I didn't pick Sunday Silence because of my system. His owner, Arthur Hancock III, had graduated from Vanderbilt and I had received a Masters Degree from Vandy the year before.
I picked the horse because of an alumni connection to a man I had never met. It was a stupid reason for picking a horse but produced one of my few winners.
Thus, on Derby Day, my advice is forget all the high powered systems and give it your best guess.
Don McNay, CLU, ChFC, MSFS, CSSC is one of the world's leading authorities in helping people deal with "Big Money" issues. He is currently on tour promoting his book: Son of a Son of a Gambler: Winners, Losers and What To Do When You Win the Lottery.
McNay is an award winning, financial columnist and Huffington Post Contributor.
You can read more about Don at www.donmcnay.com
McNay founded McNay Settlement Group, a structured settlement and financial consulting firm, in 1983 and Kentucky Guardianship Administrators LLC in 2000. You can read more about both at www.mcnay.com
McNay has Master's Degrees from Vanderbilt and the American College and is in the Eastern Kentucky University Hall of Distinguished Alumni.
McNay is a lifetime member of the Million Dollar Round Table and has four professional designations in the financial services field.
Follow Don McNay on Twitter: www.twitter.com/Donmcnay