AT LARGE: Horse Trading

AT LARGE: Horse Trading

I lost money on the Melbourne Cup this year. So what, you say, so did most of us. Except, here's the thing: I don't normally. I have a scientifically proven technique for never losing money on horse races - I ignore them.

The principle is quite simple, really. I have no idea what makes one horse run better or faster than another horse. I know nothing about jockeys or trainers or owners or other colourful racing identities (I swear I know nothing). Therefore, I don't risk my money on any of it. (I know a little about greyhound racing thanks to a former career of mine, but that's a long story - suffice to say I know enough not to bet on dogs either.)I know many other people who know as little or perhaps less than I do about horse racing, who nonetheless decide to risk their money having "a flutter" in the office sweep. The ones I particularly like are the ones who suddenly, having never exhibited interest or knowledge about horses, become authorities on each and every horse in the Melbourne Cup. These people, whose opinions are gleaned from their newly massed expertise, invariably lose money.

Crackerjack punter

I manage, using my tried-and-true technique, to at least break even every year. I have worked in places that close the entire office but for a boardroom where all staff must congregate for the duration of the Cup. On those years, I have come out ahead by a few crackers and some cabanossi.

This year, I lost money. The company I work for is based in Melbourne, where not fluttering is a form of blasphemy, so I should have expected I'd be in the sweep there (especially given that, being based in Sydney, I wasn't there to refuse). Aside from that, a software vendor bought me a random entry and my wife, bless her, entered me in her office sweep. Why, I have no idea. She e-mailed me to tell me which horses she and I had drawn in the sweep, and asked how I thought they would go. I said counter-clockwise.

Naturally, all of my bets were pear-shaped. You may argue that I didn't lose money, because I didn't place any of the bets (and I'm unlikely to pay now that I know the tickets all lost). But for me, having someone lose money in my name is just as bad. Call it ethics, whatever.

This is something I have in common with shareholders.

My wife owns a number of shares in a number of companies. She's not particularly serious about it, more what you'd call a "mom and pop" investor (although we have no immediate plans). She did get rid of her investments in technology stocks a few years ago to avoid conflict with my work - I thought it was an overreaction at the time, now I see it as strangely prescient.

Even though she doesn't follow the progress of her stocks particularly closely, she does keep a bit of an eye on the companies in which she invests, mainly just to make sure they're being well-managed. The current debacles over Coles-Myer and the NRMA are giving her conniptions.

Just as I don't claim to be qualified to comment on the Melbourne Cup, my wife doesn't claim to know how to run a large corporation. Many of the people actually running large corporations don't seem to realise they don't know how to do it either, so my unbiased opinion is that my beloved spouse is smarter than the lot of them.

Profitable companies are laying off staff, cutting back services and closing premises, all in the name of "shareholder value". In the short term it maximises profits so the shareholders are happy, but in the longer term less services means less money - where do the profits come from then?

A company like Telstra can save a bit of money on infrastructure investments, to the delight of shareholders who reap dividends that otherwise might have been spent on boring things like maintenance. Eventually, though, the infrastructure will break down, and it will be more expensive to fix than it would have been to maintain. Then what do you tell the shareholders?

All of this is frustrating to watch, especially for those of us with the common sense to see it's wrong. The shocking thing for my wife, and millions of shareholders like her, is watching it done in her name. Might as well take all the investors' money and plonk it on a horse race. It'd be fun to watch, and there might be cabanossi.

Matthew JC. Powell didn't know a horse called Media Puzzle was running. Tips for next year's race to

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