You know it's summer in Ireland when Galway Race week starts. The seven-day Fesitval is by far the biggest event on the Irish racing calendar. Horse Racing Ireland's 2016 Factbook reports that almost 150,000 people attend the festival last summer. This is more than 30,000 greater than the 2nd placed Punchestown Festival.
Since we started this blog is has been tradition to use the week long Festival to test Fama's Efficient Market Hypothesis (EMH) to the test.
As said previously Eugene Fama published a groundbreaking article in May 1970 called the "Efficient Capital Markets: A Review of Theory and Empirical Work", and conceptualized the idea of the efficient market hypothesis. Put simply, he concluded that 'the house always wins', thus we can't systematically beat the bookies.
For the fifth year in a row we will be putting this to the test by following leading Irish trainer Dermot Weld. It should be noted, the county Kildare trainer's success has declined in recent years. This culminated in Weld's failure to win the 2016 champion trainer award at the Galway Fesitval. Willie Mullins took the award, denying Dermot Weld a 19th-straight championship. With this in mind, we will also follow Mullins trained horse to see if either can 'beat the market'.
The scoreline currently reads Bookies 3 - 1 Followers. Success in 2013 was followed by losses in 2014, 2015 and 2016.The rule are as follows. A hypothetical stake of €2 (to win) will be wagered on on all Weld and Mullins trained runners shorter than 4/1, and €1 each way on all those 4/1 or greater. Guaranteed prices are assumed. The trainers will be evaluated separately.
Updates during the week will follow.
In total, Carlow based Mullins' saddled 46 horses. A total stake of €92 would have yielded a return of €120.53. That's a 31% profit on the week.
Weld sent 22 horses to post. In his defence, a recent virus has swept the yard which did not help his efforts this year. A total stake of €44 yielded a net loss of €15.37.