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. From these tipsters we construct our most favoured rating.
Every horse nominated to win gets 3 points. Every horse nominated to come in second gets 2 points. Horses nominated to come in third get 1 point.
Today the total points provided are: Yucatan 19, Cross Counter 10, Muntahaa 9, Magic Circle 6, Best Solution 2, Rostropovich 1, Youngstar 1.
Best value bet
In order to generate the value for each horse, we multiply these points by the odds. The odds in the electronic market at 7.30am this morning for these horses were Yucatan $6.00, Magic Circle $8.00, Cross Counter $9.00, Mutahaa $12.00, Best Solution $12.00, Youngstar $16.00, Rostropovich $21.00.
When we multiply the odds by the most favoured rating, the results yield: Yucatan 114 points, Muntahaa 108 points, Cross Counter 90 points, Magic Circle 48 points, Best Solution 24 points, Rostropovich 21 points and Youngstar 16 points.
Our recommendation this year is for an each way bet on Yucatan. 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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