$2 WAMPQ to Win

The reality with horse racing is that unless you are exceptionally lucky then the likelihood of your horses paying their bills is troubling. While there are no published statistics on thoroughbred investments from my experiences as an owner about 90% of horses in a given year fail to earn enough to pay their way. And while every racing circuit is different cost wise you can expect to pay around $48,000 a year to keep a So Cal horse racing on the major SA-HOL-DMR circuit. Needless to say the majority of horse owners use other ways to fund their passion for the sport.

If you hang around the exotic players long enough you are going to hear one of them says, "If I hit this pick-6 I'm gonna git mahself a horse!" Problem is how likely is that? There are many out there who play the pick-6 for years before hitting one. Those who hit more often usually play a deep ticket that gets ridiculously expensive. Mind you how many of those 1K tickets end up missing by one race? Consider also that there's a 25% take out. So on your $400 ticket, $100 goes right out the window. Finally if you are fortunate enough to hit then expect the IRS to take their cut of 25% immediately. All in all winning your next horse through wagering is a tough row to hoe. Is there another way?

Last Friday morning I decided to take my wagering bankroll for the quarter and try my hand at a different exotic wager. Let's call it the Wall Street Pick-6. I ended up playing a cold single by selecting a stock in chapter 11 bankruptcy. Chapter 11 is a reorganization situation where a company may or may not remerge as a profitable entity. Statistics are that 99% of companies fail to come out of Chapter 11. So our "horse" WAMPQ is effectively 100-1 (Arcangues anyone?).

Am I crazy? Probably so but let's consider a few things. First off there's no take out with this wager though it did cost $8.95 to place it through my online broker. During intraday trading on Friday WAMPQ win tickets were $2 a piece. I ended up putting $400 to win on WAMPQ which is equivalent in price to a 1x4x5x5x2x1 $2 Pick-6. Two singles? Wow that's brave. Some might even call it crazy. So which is a better wager?

Let's say the pick-6 we hit was the Ultra Pick-6 out of Santa Anita on Breeder's Cup Saturday. That pick-6 paid around $56,000. I think most would agree that's a score of a lifetime. What about lowly WAMPQ? Surprisingly enough if the "horse" should win then the $2 to win will pay $1,000 (WAMPQ is a convertible preferred security that liquidates at $1,000 if the issuing company defaults, which has occurred). And that two hundred times over is $200,000. If a horse's true odds are 100-1 and it’s going off at a price of 500-1, isn't that an overlay to consider? Arcangues won at 133-1 so anything is possible you know. So here's this gambler hoping that WAMPQ can get the distance. If that's the case I'll see you in the winner's circle.

Perseverance!