Using Your Economic Stimulus Check at the Kentucky Derby

My buddy "Kramer", Bagman's cousin, has a novel way to help jump-start the economy. It involves both spending and investing. Although, it might likely leave you muttering under your breath "That's why they call it gambling!"

Because Kramer is allowing me to share his picks with my readers, we are going allow him to make the annual Bagman "Buy That Man a Dinner" Sweepstakes a trio this year. As a reminder, last year, the Bagman's picks would have cost you $188. Yours truly would have placed $156.50 in your pocket. Both Bagman and I will be making our picks later this week.

While I reserve the right to change my mind, as an advance preview, I plan to study both Pyro and Monba pretty strongly. Trivia tidbit for you advanced wagerers, Big Brown opens as a 3-1 favorite in the morning line. You could have placed a futures wager on Big Brown at the end of February and received 250-1 odds on him back then.

Let's get on to Kramer's picks:

Your economic stimulus check is on the way; do you spend it or invest it?

The Department of the Treasury is in the process of issuing checks pursuant to the Economic Stimulus Act of 2008. One of the fundamental questions that taxpayers will face is: Should an individual invest or spend the funds? The federal government hopes that taxpayers will spend the checks. The theory is that the surge in consumer spending will snowball and have a positive effect on the economy far greater than the initial payment. Sounds great in theory, right? The problem is that this theory comes from the same group of wizards that got us in trouble in the first place.

The dilemma with investing is deciding where one should invest. The stock market has been extremely choppy lately. Let’s face it although the real estate has been heading down, the six hundred or so bucks, is not going to buy much. Of course one could pay down debts, but that sounds pretty boring to me. So maybe one should just spend it. However with inflation increasing and dark economic clouds on the horizon, doesn’t it seem shortsighted to spend this windfall. Maybe there is a “third way” that captures elements of both investing and spending.

My solution is, bet on the Kentucky Derby. If you win you can think of it as an investment. In fact I think the best thing to do is bet on the exacta in the Kentucky Derby. To win an exacta bet you must pick the horse that wins the race and the horse that finishes second. I know you are thinking, isn’t betting on horse racing risky? Absolutely, making a bet on a horse to win a race is risky. Making an exacta bet is extremely risky, some would say foolhardy, others may even call it asinine. I would bet three exacta boxes [ an exacta box covers every combination of first and second for the horses selected ]. The bet consists of two one dollar, five horse exacta boxes [ a five horse $1 exacta box is $20 ] and one four horse exacta box [ a four horse $1 exacta box is $12 ].

The first exacta box is: $1 exacta box 6-13-18-19-20 [ total cost $20.00 ]
6- Z Fortune
13- Bob Black Jack
18-Recapturetheglory
19-Gayego
20-Big Brown

The second exacta box is: $1 exacta box 6-10-13-18-19 [ total cost $20.00 ]
6- Z Fortune
10-Colonel John
13- Bob Black Jack
18-Recapturetheglory
19-Gayego


The third exacta box is: $1 exacta box 6-13-18-19 [ total cost $12.00 ]
6- Z Fortune
13- Bob Black Jack
18-Recapturetheglory
19-Gayego

Total bet $52.00

Well, it sure seems like we have every possible combination covered, right? Almost, the three boxes cover 28 different exacta combinations. In a twenty horse field there are 380 different combinations that could occur. I guess we could say that there are 28 good ones and 352 not so good ones. Let’s be clear if one of our horses wins big yet we get a tight photo for second, and the wrong horse noses us out of second, we lose. We need to pick the winner and the horse that runs second. I did mention that this “exacta thing” is kind of difficult to pick. Of course it would probably be easier if we focused on picking the best horses, the well regarded favorites that are preferred by knowledgeable horsemen.

When you take a closer look at the selections, you will notice that four horses are on every ticket, Bob Black Jack, Gayego, Recapturetheglory and Z Fortune. It looks like all four of these choices, our main guys, will be going off at relatively long odds. Based on the morning line odds, Bob Black Jack is 20-1, Gayego is 15-1, Recapturetheglory is 20-1 and Z Fortune is 15-1. Most people give these nags a very slim shot at success. The two horses that only appear on one ticket each, and not on the same ticket, are favorites. That’s right if Big Brown, the most likely favorite, wins it, and Colonel John finishes second, we lose. If one of these two favorites run first or second, we need to pair them up with one of our long-shot bombs to cash a winning ticket. As I stated earlier this is a very risky endeavor.

So there you are minutes away from post time, clutching your tickets, wondering what the hell did I just do? Some would say that you just pissed away your stimulus check. Hey the race isn’t even over yet maybe this extremely reckless investment will hit it big. It could happen, although let’s be honest it isn’t very likely. Besides even if we do go down in flames at least you can say you did your patriotic duty. You spent your stimulus check to help jump-start the economy.