"Some guy claimed to be selecting 95% winners.
I suggested he should be betting at least 20% of his bank."

Heh. 95% winners isn't hard. Just make any bet where you can get a price of $1.01 or lower

"You need to work out your likely longest run of outs and bet accordingly."

You can have an idea of what a bad streak would be, but the thing is the more bets you make, the larger the streaks will be. If someone is just betting for entertainment, best to bet as little as possible. That way their fun lasts longer.

If you are serious, you need to be pretty confident in your abilities to use units larger than 2% (ie you'll want a good sample size and experience and then use maths to figure it out).