27: Kentucky Derby Edition: Flip This Horse

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Joe Weisenthal (0:26)

Hello, and welcome to another edition of the Odd Lots Podcast. I'm Joseph Weisenthal, managing editor at Bloomberg Markets. Tracy Alloway, who co-hosts with me, is off traveling the world today. She'll be back next week. So I am all alone, but I was really excited about this episode because, as you may or may not know, it's about to be Kentucky Derby Day. And I think when the Kentucky Derby Day rolls along, maybe the day of the race or the day before the race, people suddenly try to cram and learn a bunch about horses.

But we're going to get ahead of that because today we have David Papadopoulos, who is a managing editor here at Bloomberg. And most importantly this week, he is an expert on all things horses, horse racing, horse gambling, horse breeding. And we're going to talk to him about horses, obviously, and everything you need to know to get ready for this weekend's derby, and the business of betting on horses, and breeding horses. And so rather than just cramming Saturday morning, you're going to listen to this podcast, and you're going to know a lot more than everyone else at your Kentucky Derby party.

Thanks, David, for joining us.

David Papadopoulos (1:44)

Thank you, Joe. And basically, what you just said, in other words, is that rather than losing your money and having no idea how you lost it, you were going to lose it. At least you'll have, you know, you'll have given it some thought and then go on to lose your money.

Joe Weisenthal (1:58)

At least you'll learn something, and maybe you'll have a little more enjoyable time watching the race. So I've never won money on horses. I've placed a lot of bets, not a lot, but I've been to races, I've bet on the Derby, and I'm terrible at it. So are we going to fix that this week?

David Papadopoulos (2:14)

We are certainly going to try. I mean, the Derby is a tough race. If you're just going to bet once a year and you bet the Derby, it's a tough race. There are 20 horses on the track. That's more than double the size of a typical field in a typical race.

Very chaotic.

And just obviously, just given the sheer number of the horses out there, if you're betting on one or two horses, it could be very tough. And the way things tend to unfold in these races, horses that often seem very logical, not only may they not win, you could all of a sudden, you could see they could come in dead last.

Joe Weisenthal (2:50)

That's a common occurrence with a race like this?

David Papadopoulos (2:52)

Well, I mean, one of the things I was just looking at again, just to refresh my memory, we had a period of 20 years, for instance, 1980 to 1999 The favorite in the Kentucky Derby did not win a single one of those races.

And in some cases, I'm looking here, they finished 12th, 16th, 10th, 8th. One of them did not finish 11th, 20th. So, it's just a chaotic race.

Joe Weisenthal (3:20)

How many horses are normally in a race? You mentioned there are 20

David Papadopoulos (3:23)

I would say, typical size varies, but anywhere, you could have fields as small as five or six, or in some cases, four. A typical, typical field would be eight or 10

12 would kind of be a lot.

Joe Weisenthal (3:37)

20 is a madhouse.

David Papadopoulos (3:38)

There's only one time in America in horse racing where there are 20 horses on the track for a race, and it's the Kentucky Derby. And the reason for that is because every owner, every racehorse owner in America is dying to say, I had a horse in the Kentucky Derby. So Churchill Downs really goes out of its way to try to accommodate and try to let as many owners bring their horses to the race as possible.

And you get this stampede of horses.

Joe Weisenthal (4:05)

Well, before we get in to talk about this weekend's Derby and the Derby in general, I want to talk really briefly about this obsession that I had a few years ago related to horses. And it wasn't related to horse betting, but it was something called pin hooking, which I read about and then I got obsessed with. And that's this idea of buying horses at auction and flipping them, selling them horses as speculations.