Lately I have been asked—in various ways—
But that ain’t how I learned to pick the winners.
In reality, I wasn’t much better than most people when it came to picking winners in the Small Cap, IPO and, Private Held arenas, until I learned… How To Win at the Horse Races!
Having grown up in Cow Country (Oklahoma & Kansas), one of the first photographs ever taken of me was astride a big old strawberry roan called Katie. As my Daddy used to say, “Horses are like some children. Just when you’ve got them started in the right direction, they up and start trying to think for themselves.”
Anyway, thinking about horses, I remember with pain and fondness my younger days “punching cattle” on the Stelbar, Lazy Bar-B, and other ranches. I also remember with affection some of the ardent, avid, and obsessed “horse players” I had known over the years.
Sharing the typical cowboy’s love/hate relationship with horses — “The only animal dumber than a horse is a cow, but the dumbest animal of all is the one on the back of the horse.” — I had never been a “horse player” myself. However, making money (even by betting the ponies) has always interested me and I have adapted many of the techniques and methods I have observed in some of the most obscure money-making endeavors to my own chosen fields of endeavor.
Until I attended my first Kentucky Colonels’ banquet, I had kinda chalked-off playing the horses as a lost cause. Although betting the ponies is a money-making endeavor, it had never yielded any techniques or methods I could adapt to my own endeavors.
All the horse players I had ever known could do was talk about horses. If I mentioned a racehorse by name, they could tell me who that horse was by (father; sire) and who it was out of (mother; dam). They would tell me the sire and dam of each of those horses, and so forth. Sometimes back 10 to 12 generations. They bet the horses based upon the win/lose record of the horse’s lineage.
There was simply no way I could adapt that methodology to any of my business endeavors. After all, if you look at the lineage of most successful business people, you wouldn’t find much to indicate that they had inherited a proclivity to succeed.
Then, at my very first Kentucky Colonels’ banquet, my wife (Delores) and I were seated at a table with Colonel Bill. He was a “professional” horse player. Colonel Bill had for over 30 years earned his living (and a sizable fortune) playing the horses. Nothing else. He didn’t work for anyone; didn’t own a business (as such); and didn’t gamble on dice or cards. He just bet the ponies.
To say I was soon intrigued with Colonel Bill would be an understatement.
Not once in our conversation across that banquet table did he ever tell me the sire or dam of any of the horses I mentioned. Nor did he ever comment on the physical attributes of the horses as did all the other horse players I had known. His conversation was more that of another entrepreneur making money in a rather unique industry.
With my adrenaline flowing — I always get a rush when I talk with successful people in any area of life — I, of course, asked Colonel Bill how he had made so much money betting the ponies while all the horse players I knew were hit and miss winners.
His answer was, “Son…” (By the way, mostly for my lady readers, when an older fella calls a younger fella “son,” the younger fella, if he is wise or wants to appear wise, listens intently because he is about to receive what the older fella considers to be the wisdom of his age or life experience.) ” … gamblers bet the ponies or play the horses. I don’t. Strong horses with good lineages can lose races. And weak horses with poor lineages can win races. So, I don’t bet on the horses.”
Then he hit me with his secret … “I Bet the Jockeys.”
Colonel Bill went on to explain that if “Shoes” (Willie Shoemaker, who won over 8,000 races in about 30 years) was riding in a race, the odds were that he would win the race — no matter what horse he was riding.
The colonel didn’t know much about the lineage of the horses running in the races — nor did he care. (He commented that they all run about the same speed anyway.) But, he knew everything there was to know about each of the jockeys: their wives; kids; family ties; religion; politics; everything. He kept informed about new, up-and-coming young jockeys who were proving their winning abilities. And, he structured his betting to take into consideration that, every once in a while, a new, untried jockey would defy the odds and beat the older, tried-and-proven jockey.
So, if you want to win at the horse races … Study the Jockeys, Not the Horses!
(Please note that it won’t work at the dog races because the dogs don’t have jockeys. They just run their hearts out trying to catch a mechanical rabbit. Maybe you can figure out how to bet on the rabbit. It always beats the dogs.)
After meeting and listening intently to Colonel Bill, I soon found myself adapting his “Bet the Jockey” methodology to … Investing in Successful Businesses
Not just anybody can crawl on the back of a horse and call themselves a jockey. But anybody — and I do mean anybody! — can open a store, create a business plan, or dream-up a business idea.
The person who operates (holds the reigns of) a business is the “jockey” in the business “horse race.” Therefore, when investing in a business, it is most important to study the win/lose record of the person who is (or will be) operating the business — the “business jockey.”
As I have said in the past, a business (any business) is nothing more than a box, whether it be a Post Office Box or a marble-columned edifice. The “real” business is in the hands and minds of the people who do the business of business. Of course, in order to keep with our current metaphor, the business is a horse.
By betting on “business jockeys” with the best win/lose records, you can always pick more winners than losers. Of course, you miss out on some of the good deals when a new, untried “business jockey” wins big. On the other hand, if you bet too heavily or too often on new jockeys, you’ll find yourself with more losers than winners.
That’s why when I get any new business plan or prospectus, the first section I turn to is the information about the backgrounds of the principals. If they haven’t done business successfully before (especially if they are past the age of 40), I need an awful lot more convincing before I’m ready to invest.
This adaptation of “betting the jockeys” has served me well over the years. That’s why my win/lose ratio is 80/20 instead of the other way around.
Now … Go Ye and Do Likewise!
J.F. (Jim) Straw began his long, successful career in business at the age of nine when he sold his first cans of Cloverleaf Salve and copies of GRIT newspaper. As a mail-order marketer with over 700,000 customers worldwide he has sold over five-hundred million dollars ($500,000,000) worth of products and services by mail — everything from beauty supplies to heavy equipment, burglar alarms to sleeping bags, fishing lures to women’s wigs, automobiles to wheelchairs, investment opportunities to seafood, consulting services to “how to” courses. His book Mustard Seeds, Shovels, & Mountains is published by Kallisti Publishing.
Having spent over 50 years in business successfully, J.F. (Jim) Straw now shares “Practical Instruction in the Arts & Sciences of Making Money” at the Business Lyceum — http://www.businesslyceum.com.