Trading Notes 20th March
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No decent sport today so I have written a season Preview on Formula 1 for you all to enjoy!
Lights out and away we go!
The greatest motor sport in the world is back this weekend and after some testing and new car design reveals we are ready for the proper racing to begin.
Last season was a really great year for the sport as Ferrari threw down a real challenge to Mercedes and looked well on top during parts of the season. Sebastien Vettel traded at heavy odds on at some points and led the championship for many weeks. Ultimately some driver errors and car reliability dogged Ferrari towards the end of the season. They will have strong hopes going into this season that they can finally dethrone the mighty Mercedes team.
Lewis Hamilton has hinted at retirement several times now but again returns for Mercedes as a 4 time world champion, like Vettel, he will be gunning for his 5th World Championship, to take him to 2nd place in history. Hamilton is a deserving favourite for the title but he is trading at 1.72 a price that, although about right, does not interest me in a sport where anything can happen.
Pre-season testing has helped to shape the odds in the outright winners market and it is perceived that Ferrari are 0.3 seconds behind Mercedes at the moment. This is however only testing and a bit like pre-race practice (or for football fans pre-season friendlies) you have to take this information with a pinch of salt, let's see what happens in the first race to really decide how close the two teams are.
I have only talked about two teams so far and whilst Redbull cannot totally be dismissed I am still not a believer yet. Red Bull have been off the pace for a while now and I would need to see a lot from them in the first race to take them seriously. Their young gun Max Verstappen is a fast driver but he is wreckless, the fans love him as a result but the reality is that even if the Red Bull does spring a surprise I would rather have Ricciardo (19.0 odds) who is double the price of Verstappen in the outright market (Ricciardo finished above Verstappen last season by 32 points).
So for me this will be Mercedes v Ferrari and probably Hamilton v Vettel. I think Ferrari showed enough improvement last year to throw down a decent challenge this season and considering that Vettel was favourite for long periods last year to win the championship I think his current price of 5.7 is very generous. I would have him at 4.0 here at the very most, he is a 4 time world champion in a car that was better than Mercedes at many tracks last year.
One driver I have not yet mentioned in Valteri Bottas, now I expect him to finish behind Hamilton again this year but people seem to have forgotten that he was in the title race until the last few weeks of the season last year. As the other Mercedes driver he apparently has the best car to work with and with another year at the team under his belt maybe can settle and produce better performances. I think the market assumes that Hamilton is the number 1 driver at the team but I don't think this is how Mercedes works. Unlike Ferrari, Mercedes tend to let their drivers race each other. This is evidenced by the fact that last season during one race they let Hamilton through to try and catch the Ferrari's, when Hamilton failed to do this he gave his position back to Bottas, despite being their front runner in the championship. Also, let's not forget two years ago Nico Rosberg won the championship while racing Hamilton as the other Mercedes driver, it has happened before and could happen again. At 17.5 Bottas represents some value for me.
Anyway, those are my thoughts as we head to the first race, I can't wait to get the action going in Australia this weekend and hope for another exciting season ahead.
Value trades:
Backing Sebastien Vettel at 5.7 odds
Backing Valterri Bottas at 17.5 odds
More speculative value long shot:
Backing Daniel Ricciardo at 19.0 odds
