A VIEW FROM THE TOP END – MELBOURNE CUP 2021 SPECIAL EDITION

Background:

This will be our third year running our betting model. For the 2019 race we took an engineering approach 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. Last year unfortunately a stunning race from the 8yr old Twilight Payment spoiled our party. With last year's data point fresh in our mind we tweaked our weightings and the new and improved model is ready for this year's wager.

How we bet:

For those unfamiliar with our previous Melbourne Cup piece we play a boxed trifecta on six horses. We wager $120 on the 120 combinations, ultimately that gives us $1 on each combination.

Payouts for the trifecta can range wildly depending on the betting pool size and whether favourites make up the top finishers, or a roughy sneaks in. Since 2010 the Melbourne Cup trifecta has paid between $179 and $51,117. The median payout is ~$2,700.

What we model - Changes from 2020

We are always looking to improve, so this year we had a look at what we could learn from 2020. In adition to speed, eliminating 80-1's and above (they're closer to 200-1 and not a good deal), and the age/sex/weight statistics, here are our changes:

Upweight Jockey/Trainer: Let's face it they're at the track more often than the rest of us and they are incentivized to win. Top jockey's ride top horses, and top trainers know what to look for. Familiar names were in our previous model, but this year we weighted them more heavily.

Training: Bart Cummings, the Melbourne Cup legend himself, used to look for a horse with 10,000m on its legs during the spring season. Now with modern training and data analytics, a horse hasn't won the Melbourne Cup since 2009 with that amount of training, but the process behind the thinking is still sound. The race at Flemington is long, so a horse needs endurance as well as speed. We looked for horses with 6,000m - 8,500m for our top picks, with only Spanish Mission falling outside of this range.

Odds Momentum: Climbing odds show that a horse is falling out of favour, falling odds can mean that there is value to be had. We start tracking the odds in September to see which horse is performing well and catching punters eye as the race nears.

For the Data Nerds:

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

Results:

Tallying the results we will be placing the following bet. Good luck on race day and remember to drink responsibly and most of all enjoy yourselves.

$120 Boxed Trifecta:

#2 Incentivise
#16 Grand Promenade
#7 Delphi
#12 Persan
#3 Spanish Mission
#6 The Chosen One

Regards,

Gareth Jakeman
Chief Investment Officer

Nirav Patel, CFA
Investment Analyst

Kyle Schlachter, CFA
Investment Analyst

Lauren Sprague
Junior Investment Analyst

(Territory Funds Management Pty Ltd is sub advisor to Mason Stevens for the Territory Active Goals SMA’s).

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