The underpaid data-crunching genii at Macquarie Group’s shadowy Quantitative Research Dept are backing short-odds favorite Deauville Legend to win Australia’s biggest horse race on Tuesday.

These are the golden genii, the chosen ones of meta modelling and they’ve been running the books with this Melbourne Cup model – of a sort – since 2007.

Who’s a quant? I think Ryan Gosling disgraces in explanation the best (a great scene):


Each year now for most of this millennia, the quants put a pin in financial markets and turn their arcane and quasi-mystical powers toward picking some winners in a really big horse race.

This has become something of a wacky races tradition for the stiff collars at Macquarie, sending forth an annual note to clients with a wink and a nod, gliding close to the sunshine of comedy without ever allowing it to actually either singe the bank’s sensibilities nor to humanise the analyst’s social contract.

Anyhoo. Over at Macquarie after a few early wins the Peak Geeks have had, well, a bit of a lean trot.

Punting on quanting

Before we get to the important picks, please allow me to intro this bizarre unity of punting and quanting – or as I like to call it – Puhquanting.

That’ll catch on.

First up: quantitative research is an – almost certainly – fake news process of harvesting numbers, and rearranging them into revealing numerical patterns.

Analysing numerical data is fun (fake news). It’s totally reliable, foolproof and any conclusions drawn from the study thereof are bloody bulletproof (potentially fake news? I’m not Puhquanatified to say).

At the millionaire’s factory, they’re using this stuff all the time.

They’re using it to find patterns and averages, make predictions, test causal relationships, and generalise on whims and results to wider, possibly more vulnerable and less-genii saturated populations.

The Melbourne Cup on t’other hand, is the race that stops a nation. Most first-nation Aussies would call that the English, but when it comes to gambling it seems we have much leeway in the lucky-arse country.

There’s been some 150 years of this foolishness and although I don’t see any horses getting richer, it currently has a prize pool of about $10 million dollar bucks.

The silliness of its gaudy and “anything for half day off on the froffs” vibe draws punters who would otherwise only have the most occasional of flutters.

And ever since the bank’s QR team got involved, the mind-melding of two seemingly disparate fields like these basically green-lights the brokers, investors, analysts and market-betting chartists to bring their modeling chops into the light of another, almost real world market.

The Cup Winners 2022

The total quants chez Macquarie have calculated that the overly-backed, short-odds favourite Deauville Legend is a shoe-in for the win.

Coming in second is Knights Order.

For the trifecta is Hoo Ya Mal.

The bank’s Toppest Oddest of Equity Quants, John Conomos, the lead cranium behind the MQG quantium-force says there were a gaggle of extraneous variables to take into account, like… bearish weather.

“The weather forecast for (today’s) race is also bearish, with the chance of a thunderstorm and even some hail according to the Bureau of Meteorology,” Conomos wrote in a note to clients.

Firstly John, whatever witchcraft your crew might be pulling on financial markets and however gloomy the meteorological outlook, I cannot extrapolate INTO MY MIND the shape, colour and force of bearish weather.

In John’s defence, this year his team apparently factored animal welfare in its modeling a nod to ESG.