I've always been fascinated how the Yin Yang symbol so perfectly represents the relationship between two concepts to form a third concept that appears just as real.

Take for example miles per hour. We know there are miles and we know there are hours. We know that if we walk for miles, it will take hours. If we figure out how many miles we walked in one hour, we'll know our speed in miles per hour.

This is grade school stuff, but it gets more interesting.

In electrical theory, the most basic theorem is Ohm's law. It's expressed by very simple equations:

    Voltage = Current times Resistance

To remember their relationship, a new electronic technician is given a simple wheel diagram to find the third term if the other two are known:

Looking at the wheel, if I know the amount of current and voltage, I cover letter R to find the correct equation to use . If I want to know voltage, I cover the E to see I need to multiply I by R.

The wheel is easy to sketch and handy to use. I used it for years while admiring Yin Yang for its beauty without realizing the two described the same relationship. It is the relationship between two things that forms the third thing. The relationship between two things is measured as a 3^rd thing.

If only two of the three things are real, which two are genuine? Ask an electrician to pick whether current, voltage or resistance shouldn't exist. They all exist and there are common ways to measure them. Yet, we know that voltage is formed by current flowing through resistance.

See, that's the fascinating part – two real things creating a 3^rd real thing, becoming a whole.

In the miles per hour example, we're pretty sure that miles and hours are real and that miles per hour is just a rate made up to describe our speed. Rate times Time = Distance.

Isn't speed real? Tell me its not when you hit a wall at 70 MPH. Speed kills.

Time kills too, but it usually takes longer.

You can't think distance isn't real. It's a long way home.

So, we have two things forming a real relationship. Amazing, isn't it?

In horse racing, the only way to win is to collect more money than you bet.

Money Won over Money Bet yields Return on Investment (ROI.)

A lot has been written about ROI and just in terms of horse racing. It's the bottom line in business, profit over costs. It's the basic Profit Wheel:

    Won = Profit / Bet // widely used formula for ROI

If you won $20 on $100 bet, your Return on investment is 0.2 or twenty percent. That's pretty good.

Most handicappers don't figure their ROI, they count the money left in their pockets.

For those of you still interested, make new wheels from these:

    WinPct = Hits / Bets

    Profit% = Payoffs / Bet

If you haven't kept meticulous records, you can estimate your win percentage (AKA strike rate) and average parimutuel payoff and insert them into this most interesting wheel:

    Profit Ratio = AvgMutuel * WinPct

This is how you estimate future ROI quite easily. If you know how big the average payoff is and how frequently you receive it, you'll know if you're profitable and by how much.

Think $8 * .3 = 2.4 / 2 = 1.2 for a 20% profit.

In ten races, you'll bet $20 using $2 WIN bets. If you win 3 times at $8.00 each, you collect $24 for a $4 profit. Four dollars is twenty percent of twenty dollars. ROI of 20%

So, future winnings depend on this wheel:

Increasing your average mutuel or your win percentage increases profits.

Unfortunately, price and frequency are generally inverse properties where increasing one usually decreases the other. You get price by betting longshots and longshots just don't win as frequently as favorites.

I met a guy on line who was convinced his 25-1 longshots won as often as his favorites. I called him on it, but he wouldn't back down (or show proof.) Unless you can handicap like that guy, reaching for a price means you will win less often. If he told me his top pick at 25-1 won like it was 15-1, I would have believed him.

May your profits be real!