Economists generally have enough sense to know that they know nothing about horse races. There are people who do. They are called tipsters.
Every Melbourne Cup Day, their tips are published in major newspapers. From these tipsters we construct our most favoured rating:
Today we have taken the tips published in The Australian newspaper. There are eight tipsters in all. Every horse nominated to win gets three points. Every horse nominated to come in second gets two points. Horses nominated to come in third get one point.
Today the total points provided are: Marmelo 13, Johannes Vermeer 11, Almandin 11, Humidor 7, Red Cardinal 2, Wall of Fire 1, Rekindling 1.
In order to generate the value for each horse, we multiply these points by the odds.
The odds in the electronic market at 8.30am this morning for these horses were: Marmelo $8.00, Johannes Vermeer $10.00, Almandin $8.00, Humidor $12.00, Red Cardinal $16.00, Wall of Fire $12.00 and Rekindling $14.00.
Best value bet
When we multiply the odds by the most favoured rating, the results yield Johannes Vermeer 110 points, Marmelo 104 points, Almandin 93.5 points, Humidor 84 points, Red Cardinal 32 points, Rekindling 14 points and Wall of Fire 12 points. So our recommendation this year is for an each way bet on Johannes Vermeer. Remember our recommendation is for the best value bet rather than for the highest probability of winning.
View more analysis from Michael Knox by clicking on 'economic strategy' in the popular topics list to the right of this page, or listen to his full playlist of podcasts on Soundcloud. Alternatively, contact your Morgans adviser or nearest Morgans branch.
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