Nov

1

In Australia the press dub The Melbourne Cup as the race that stops a nation. It is one of those rare events where almost everyone, gamblers & non-gamblers alike, have a punt on the outcome of Australia’s most famous thoroughbred race. Sadly, like a large percentage of the population, I tend to walk away from the day, happy but out of pocket.

It is truly one of the social events of the year & the mood of the nation tends to be exceedingly upbeat. It is also a very positive period for Australian stocks. Recording all 4 Day % returns including the 1st Tuesday of November (Melbourne Cup Day) from 1992 to 2005, I found that the S&P ASX 200 had a tendency to produce inordinate gains with an average move of 1.78%.

Returns on Melbourne Cup day also tend to be positive.

I posit whether mood is the major influence on these returns, not unlike the better than average returns that accompany stocks at Christmas & New Year. It is probably an area that deserves further study. Other factors may be the perceived investor relief that October is over, 1st week of the month positive bias, November through to the end of January marking the beginning of an historically positive period and thin markets around Melbourne Cup Day.

I hope the markets remain compliant, and if I’m very lucky, I may walk away from Melbourne Cup Day happy and not out of pocket.


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