A VIEW FROM THE TOP END – MELBOURNE CUP SPECIAL EDITION

Markets:

Forget the markets it is Melbourne Cup week! The TFM team has taken a break to bring you an analysis of the Melbourne Cup field and pick our winner. We remind everyone this is a special publication, and it in no way constitutes investment advice, please share around and let's have some fun.

Melbourne Cup:

The race that stops the nation will be taking on a special form this year with Covid restrictions eliminating crowds, fashion on the field is a virtual display and the infamous over imbibing infractions will have to be summed up by hashtag from bars, offices and homes. Punters are still free to place wagers, and that is what we are here to help with.

This will be our second year running our betting model. We are investment experts 364 days a year and punters for the rest. For the 2019 race we took an engineering approach with our model and were able to box the trifecta for a win (120 combinations), as Vow & Declare helped us take $2,581 home on our $100 wager. The model remains the same but we are going to share.

How we bet:

If you are new to racing the trifecta might be unknown betting terminology. It simply means that you are picking the first, second, and third place horses in exact order. Typically, punters pick a range of horses and "box" the result, translated, boxing means picking every combination, with no repeats. For example, if you choose our recommended bet of boxing six horses you are betting on 120 combinations. A $100 bet results in $0.83 bet on each individual combination.

Due to the popularity of the day, betting pools for the Melbourne Cup swell and dwarf any other race in the nation. This translates to large trifecta pay-outs. If a rare combination wins because of the favourite falling out of the top three, or a roughie taking it all, like in 2012 with Green Moon, a $100 wager turns out a hefty return.

Over a 10yr period straight odds picking six horses each year should yield two wins. With a median trifecta pay-out of $2,747, an investment of $1,000 over ten years ($100/yr) should return 5x your money, and countless thrills. Unfortunately, the odds are not straight up, and that is where we are going to help with our excel spreadsheet talents.

What We Model

Last year we took an engineering approach to our quantitative analysis styles and this year the model remains the same.

• Speed : Distance divided by time is average speed, every engineer's first formula. Speed is the trump card when it comes to racing, and the Melbourne Cup has a unique spanner in the works, since the race is so long. For anyone that has ever run, increasing distance typically leads to a drop off in average speed. We can see this in humans as the 800m record was set at a speed of 28.5km/h, and the 1000m record is currently run at 27.3km/h, a 25% increase in distance leads to a nearly 5% decrease in average velocity for the top athletes in the sport. Coming back to horses the average race distance for our data set of potential Melbourne Cup entries was 1780m compared to the 3200m race that will be held at Flemington on Tuesday. Track conditions are set to be good (4), so we will be backing a horse that can run the track in 3:23mins or better.


• Odds: We eliminate horses with odds of greater than 80:1. Two realities exist for these roughies, firstly they are at a 1.25% chance of winning the race and highly unlikely to place. Secondly, book makers shorten the odds for long shots to bring in betting, the true odds for an 80:1 are closer to 200:1.


• Sex: Male horses have outperformed female horses in the Melbourne Cup nearly 9:1 throughout history, and no mare or filly has won the race since 2005 (Makybe Diva). Traditionally your best bet is to back a stallion, but geldings (a castrated male horse) have shown class of late, winning four of the last five.

• Age: There is a window for success at the Melbourne Cup, four- and five-year old horses have the best record, with no eight-year old winning since 1938. Young horses have had similar obstacles, with the last 3yr old winner being from 1941.

• Trainer / Jockey: Act like you have been there before…if a trainer or jockey has won the Melbourne Cup before, that experience is invaluable and they are likely to know what it takes to repeat.


• Barrier: With the release of the Melbourne Cup barriers, Punters around the country will be pouring over race forms to discover patterns. Well the barrier draw is less influential than made out to be. Inside barriers over outside barriers accounts for a 2% advantage, not enough to move the needle. For the superstitious, barrier 18 is the only barrier to never produce a Melbourne Cup winner.


• Weight: In the last 10yrs the average weight carried to victory is 54-55kg. The last horse to win carrying more than 56.5kgs was Makybe Diva in 2005 (58kg). On the other side of the scale, no horse carrying just 50kg has won since 1999.

Data Nerds:

Below is the data from our model for those with a thirst for figures and keen eyes (click image to enlarge).

Results:

With the results tallied we will be placing the following bet, good luck to everyone on race day, and remember to gamble responsibly, drink responsibly and most of all enjoy yourselves.

$120 Boxed Trifecta:

• #18 (Ashrun)
• #23 (Miami Bound)
• #3 (Vow and Declare)
• #16 (Steel Prince)
• #15 (Russian Camelot)
• #17 (Chosen One) - Replacing #14 (King Of Leogrance)


• #14 (King Of Leogrance) - **SCRATCHED**

Regards,