Mac quants giddy-up for Melbourne Cup with PunterGPT; top picks in
It’s that time of the year again, when Macquarie Capital’s quants redirect their skills away from trying to solve the financial markets to picking the winning horse in the Melbourne Cup.
The Melbourne Cup field makes its way out of the straight last year. Justin McManus
The team’s traditional model is tipping No. 3, Without A Fight, to continue its Caulfield Cup win at Flemington on Tuesday, ahead of No. 21 Future History and No. 5 Vauban.
But they’ve tinkered with their recipe this year, sprinkling some artificial intelligence – aka PunterGPT – on top of the traditional factor-based model which has spit out race tips for Macquarie’s clients for 16 years.
PunterGPT, which used natural language processing thought differently on who would win. On its reckoning, Gold Trip should take the cup tomorrow, followed by Without A Fight and then Daqiansweet Junior.
Put the two models together and Macquarie’s potential winners include Without a Fight, Gold Trip and Absurde.
The team seems to have hedged its bets somewhat with the picks this year, giving itself two horse picks – Without A Fight on the traditional model and Gold Trip on the NLP one – to match against the race’s results tomorrow. That’s a smart move, given Macquarie’s had a few Race Day duds on picking the winner, after a hot winning streak early on.
While the traditional model used five factors (value, momentum, sentiment, quality, innovative data) its natural language processing counterpart was asked questions like: who would you bet against, why a horse couldn’t win, and what were experts focussing on or missing regarding the horses.
“The advent of LLMs has opened up new possibilities for enhancing capabilities in our industry and many others. As you can imagine, we struck up a close friendship with PunterGPT and agreed to try our luck once again, analysing the race that stops a nation,” said the team which included John Conomos, Richard Lawson, Vivian Chua and Tao Chen.
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