Ah, Melbourne Cup day.
The time when those of us who don’t have a punt the other 364 days a year undertake our patriotic duty to lose a few bob at the TAB, picking horses based on colours, numbers and tenuous links to a semi-forgotten life event, bad pun or wishful thinking.
Or, simply, as famed racing tipster Elton John once sang, ‘because [we] liked the name’.
It’s so good — or so bad, depending on your perspective — that proper punters tend to avoid the Cup. The odds, they reckon, are so messed up by the flood of ‘dumb money’ (I don’t want to make too fine a point of it, but I think they’re talking about us, Olly), that they simply give it a miss.
So, famously, has Taylor Swift. Make of that what you will, but I have a sense that the beautiful people in the horrendously expensive sponsors’ marquees won’t miss her at all. Just swap in a rent-a-celeb and pass the Bolly, darling.
Meanwhile, maybe I’m just secretly jealous, but did you see the blokes who won ‘Fashions on the Field’ over the weekend? To the untrained eye, it looked like they’d swapped their socks for a roll of some old David Jones houndstooth logo fabric and turned it into matching suits.
Ah, well. Live and let live, I guess.
But speaking of poor choices, if you must risk some of your hard earned over 3,200m this afternoon, The Motley Fool brings you, as is our custom, tips from Lewy, who has forgotten more about horse racing than I’ll ever know.
Now, the last couple of Cups have been something of a dry spell for Lewy, after success in prior years. So, if we can invoke a little econo-speak, maybe mean reversion says he’s due for a win.
But, just in case, we’re also introducing you to a new tipster who is also new to The Motley Fool, having joined us only a month ago.
Burgo reckons he’s “picked the cup winner three years running (through absolute blind luck) and each year I’ve only had $10 on them, thinking “surely I won’t pick it again…”.”
Granted, that’s not the strongest recommendation. And he might call it luck (and please don’t write in to remind us about the Hot Hand Fallacy — we’ll be busy watching the race) but no-one is that lucky.
But maybe Burgo was bitten by a radioactive spider and just doesn’t know his own strength.
In any case, he made the mistake of sharing his three-peat with us, so we’ve drafted him to add his predictions. (Plus, he’s still in his employment probation period, so if we lose money, we can always make it back on the suddenly lighter salary bill. No pressure, Burgo.)
Pens ready? Logged into your online betting account? Got your sweep entries and want to know your chances?
Good. With all care and absolutely no responsibility — our AFSL doesn’t cover horse racing, so don’t come to us if we come up empty — here are Lewy and Burgo’s best.
Lewy, ever the value hunter, and a man with a flair for taking a chance, has offered this:
“Rolling the dice on The Cup this year. Chancing an unseen import with a gun local trainer in Southern France. Seems to have right form lines through Downdraft who I think is the main danger. Vow and Declare best local for 3rd. But it’s open ($8 the field).”
For what it’s worth, apparently ScoMo and Albo are both also on Vow and Declare, so consider yourselves informed.
What about Burgo, the man with almost as many Cup winners as the great Bart Cummings?
“Note that this continues my traditional “unorthodox” approach of completely ignoring form guides, past performance, track conditions or… really, anything that would actually conceivably help, so…:
Surprise Baby (going for the win here)
Mustajeer (each way)
Prince of Arran (each way)
I’m no expert judge of horseflesh, but I have to say Lewy at least sounds like he has an idea. As for Burgo…
Then again, this is the Melbourne Cup!
(For my own part, I think I tipped a winner once. Or won a sweep. Or something. I’ve never really gotten over losing $5 when Shiva’s Revenge was pipped by Let’s Elope in 1991. I’m not scarred by the experience. Honest.)
The upside, of course, is that between our two resident “experts” (I trust you’ll understand why at least one of them deserves the inverted commas), we’ve covered 25% of the field.
Which, depending on your perspective, lets you whittle down your focus to just a quarter of the horses in the race… or quickly and easily dismiss them, leaving a field of only 18 others who are in with a chance, before you risk your hard-earned.
Me? No idea. Haven’t looked yet. I’ll probably throw a few bob on three or four horses, each-way (a lesson I learned from Shiva’s Revenge. Did I tell you about the time…).
Lewy is due for a win, and I’m not sure I trust Burgo’s dartboa… I mean expertise.
Which, given my luck, adds more weight than is reasonable to Lewy’s fancies, and all-but guarantees Burgo a win.
Whichever horse you back, good luck! And here’s hoping for an incident- and injury-free Cup Day.
Okay, okay… I can’t just leave it there. I’m all up for a little punting fun on the first Tuesday in November, but remember the odds.
No, not the odds of one horse or one gambler winning.
See, almost all gambling has a negative expected return. That is, all of the winners, together, will take home less than the total of all the money wagered.
Why? Because, as they say, the house always wins. In casinos, the rules are such that the games are specifically designed to make sure the house comes out ahead. In racing and sports (and lotteries), the odds are set such that the bookie (either at the track at the TAB or online) or the lottery provider keeps a good proportion of the money wagered.
The more we gamble, the more we lose.
Which, on Cup Day, is no big deal. It’s just a bit of fun. But it’s also why we shouldn’t make a habit of it.
Contrast that to investing, where the expected average return is strongly positive. Not only that, but the longer we play, the more we expect to win — the very opposite of having a punt.
Yes, there are risks in both. Yes, both can have winners and losers.
But the odds of coming out ahead are streets ahead for investors, compared with putting a few bucks on the nags.
So, hey, if you have a win, why not plow it back into something that’s much more likely to make you money… like some well chosen shares?
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Motley Fool contributor Scott Phillips has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.