2020: It Begins

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Happy holidays folks!  It’s that time of year where we go home, spend time with the family, and decide if we’re going to run for President.

The skies are darkened by trial balloons, the magazines clogged with profiles, and Instagram saturated with Relatable Kitchen Content.  Voters in Iowa dutifully wait by their telephones to be polled.  Yes, the 2020 cycle is officially upon us.  And so we must Predict:  who will win the Democratic nomination for President?

I’m struck, at this stage, by how many people don’t really like their choices.  People kind of want newness, but also someone good, and probably the candidate should really be a woman (oh, but not that woman I can’t stand her), and maybe the candidate should be good in the Midwest, but oh I don’t know.  There’s no Barack Obama out there, basically.  That said, there are like 40 people thinking of running and one of them has to win, right?

And so let’s take a look at the field.  I won’t make an attempt at categorizing them (read Dave Weigel’s meta-synthesis of groupings others are using).  Instead, I’ll rate them on the two things that I think matter: charisma and identity.  (As opposed to all the bullshit that we tell ourselves matters like political ideology, electability, and so forth.  Don’t kid  yourselves, folks.  You use that stuff to justify the decision your gut already made.)

As ranked by pricing in the PredictIt market, as of December 19, 2018:

Image result for Beto O'Rourke congressional pictureBeto O’Rourke – 21c.

Charisma – very high.

Identity – mixed bag.  Young, new, hot.  But annoyingly also a white male.

His path – win Iowa, take second at least in NH.  Finish respectably in SC/NV and come away with enough delegates from TX/CA/MA on Super Tuesday that he can ride momentum throughout the rest of March to emerge with the clear lead.

My take – Beto is clickable, likable, electable, _____able.  He knows it (he loves it).  The media want him to run (my god, the clicks).  He wants to stand in front of the crowds again (but maybe he doesn’t say this out loud).  His wife is probably against it (but what do I know).  He will probably run (the betting markets will go insane if he doesn’t).

Beto isn’t Obama.  (I mean, seriously, can you imagine Obama ever writing prose this self-indulgent?)  But he can draw a crowd, hell he can fill a stadium, he can raise money.  He probably has policy positions too?  Not that I know what they are (and not that they would matter).  We’ll know if Beto is going to win when we see his first fundraising numbers.  If he’s maintained his support from his Texas run, look out.

Senator Harris official senate portrait.jpgKamala Harris – 17c.

Charisma – moderate.

Identity – strong.  New (enough), diverse background, black, female.

Her path  – Respectable finish in Iowa/NH.  Win SC/NV.  Win CA by a good margin (will be hard!) and emerge as the consensus choice for black voters by the end of Super Tuesday (i.e. get Booker out of there).  Then grind it out and make sure to win enough superdelegates in case she needs them.

My take – When I think of Kamala, I’m struck by how little organic interest there seems to be in her.  Maybe I don’t follow the right people on twitter – but where is the buzz?  Her tweets kind of suck too?  She’s got a sharp, aggressive wit but seems to keep it restrained.  Her public speaking is okay.  But really she needs a Moment or two.  People need to be inspired by her (the person) such that they talk about her, want to work for her, want to vote for her.  We shall see, but I don’t think you can play it safe and expect to win versus a huge field.  Sit down with Brian Schatz and learn how to tweet.  Something!

Official portrait of Vice President Joe Biden.jpgJoe Biden – 17c

Charisma – very high.

Identity – weak/moderate.  Old (really, a bit too old). Very much a white guy but also the kind of white guy that other white guys think will beat Trump easily because he will appeal to those Obama-Trump white guys.  A bit handsy with women in photo-ops in a way that will be a nagging Topic of Discussion and turn-off for many D voters (women are the Democratic base in the end).

His path – Swat that punk Beto kid aside by stepping on his spotlight.  Win two of the first four.  Emerge as the Establishment Consensus heading into and out of Super Tuesday.  Mop up by the end of March.  (By the way, with how front-loaded the calendar is, this won’t happen.  Some will drop out mid-March, but really there could be four or five candidates at that point jostling for delegates and no one will see a point in dropping out until April).

My take – If he were ten years younger, he’d be the Anointed One.  Half the Senators running this year wouldn’t bother.  But he’s not and so here we are.  People like Joe Biden (except for a not-to-be-ignored chunk of mainly female voters that find him creepy, with some justification).  He has the highest name recognition right now, his favorables are consistently good, and his experience will make him stand out on any debate stage.  I actually think he might be the closest thing we have to a front-runner right now, but there’s plenty of time for Things to Happen.

Bernie Sanders.jpgBernie Sanders – 14c

Charisma  – high.

Identity – weak/moderate.  Old (but also that’s kind of part of his brand?).  Already lost!  Very, very white dude.  Retains a hardcore lefty base though.

His path – top three in Iowa, win NH (anything less is an embarrassment) and finish top three in SC/NV.  Don’t get blown out on Super Tuesday.  Hope the other White Dudes have faded and that the black vote gets split.  Scrape by with a plurality of delegates by fighting hard in caucus states vs a big field and win it at the convention.

My take – I mean, he’s run before!  (So has Joey B.)  And he lost!  Brutally!  To Hillary!  He’s charismatic and he maintains (some) of his original lefty base the same way Ron Paul held onto his libertarian base.  But he won’t be the non-Hillary like he was in 2016.  And honestly I wouldn’t be surprised if he chose not to run, actually.  But if he does run, and (as I lay out above) no one separates themselves from the field by the end of March, he is stubborn enough to stick around and try to win some caucuses and fight it out at the convention.  Which would be an amazing outcome as far as betting markets go, anyway.

Amy Klobuchar, official portrait, 113th Congress.jpgAmy Klobuchar – 10c

Charisma – low/moderate.

Identity – strong.  Female, midwestern-moderate-white (to win back WI/MI/PA), nice, new(ish), the anti-Trump.

Her path – Actually run, win IA, top three NH, survive SC/NV, survive super Tuesday, hope to emerge atop the field by mid-March or at least be among the top three going into a split convention and hope the superdelegates pick her.

My take – why not Klobuchar?  That seems to be what people say when they’re reaching for a candidate they might like (but don’t know much about) because the others aren’t really doing much for them.  I like her – who doesn’t?  But my sense is she’ll struggle to raise money, stand out from the crowd, and catch fire.  Maybe I’m wrong, I don’t know.  She certainly stands a chance in a crowded field where anything can happen – and she also certainly might decide not to run at all.

Cory Booker, official portrait, 114th Congress.jpgCory Booker – 8c

Charisma – moderate/high.  He really likes the stage but has a way of extemporizing his way into wide-eyed word salads.

Identity – moderate/strong.  He’s black, but that doesn’t mean he automatically gets the black vote.

His path – hope that he pops.  Hope that he wins SC/NV.  Hope that the field is unsettled by the end of March and that he’s still in the picture.  Win a split convention, or, in some cases, actually win outright if the right combination of candidates quit early (Kamala, Beto, and Biden).

My take – He’s really not Obama, which is the inescapable (and clearly racist) comparison that he’ll have to deal with.  But also kind of true!  He has the potential but his delivery isn’t always there.  He exudes passion but not vision.  And I don’t think he has a national base.  His biggest strength is that he’s really hungry, and unlike the somewhat more cautiously predisposed Kamala/Klobuchar/Warren he will take the risks needed to get himself into the spotlight.  I can see him enjoying the campaign in a way that others won’t.  I’m skeptical that he wins, but I think he will have his moments.

Elizabeth Warren, official portrait, 114th Congress.jpgElizabeth Warren – 8c

Charisma – moderate.

Identity – moderate.  She’s a she, but she’s also not well-liked.

Her path – Put out lots of policy proposals thinking they’ll matter and drop out on March 11.  No, uh, let’s see.  Win NH and knock out Bernie, hoping he endorses her (their politics are close enough).  Carry MA and hold her own in CA/TX on Super Tuesday.  Hope the field is bunched enough that she can grind it out for a plurality at the convention.

My take – People dislike Warren in a way that’s quite reminiscent of the sexist ways they disliked Hillary Clinton.  Men will bring up the sound of Warren’s voice (just like they did Clinton’s).  And she does have an anxious energy at times.  Yet she’s probably the smartest potential candidate out there (though unlike Obama she ain’t a cool academic).  Put Warren’s ideas in Bernie’s mouth and his ideas in hers and people will take whatever comes out of Bernie over whatever comes out of her every time (this is my central theory of politics in a nutshell).

I think Warren runs but I hope she runs like an underdog because she is one.  Fuck the cautious HRC approach, meetings, slogans, debating policy ideas.  Go hard.  Own the intensity and carve out an identity from it.  Eschew the overproduced videos, write your own tweets, embrace your inner narcissist and see where it goes.  Of course, none of this will happen.

 

The Rest

Oh, who knows.  Mike Bloomberg?  Yeah I dunno.  Tom Steyer?  Ugh.  Oprah?  This would be amazing (and she’d vault to the top tier).  The Rock?  No, but lol.

I have an eye on Kirsten Gillibrand, Sherrod Brown, Martin O’Malley, and Julian Castro but really it’s tough to win from nowhere at this point.  Trump at least had national name recognition and brand.  For contenders to emerge from this tier they need to somehow get above 1% in the national polls, get on the debate stage, and make something happen.  Or maybe that’s too 2012 of a path.  Maybe they need to do some crazy shit on Instagram?

 

How to gamble on this mess

Honestly it’s December 2018 why pick a winner and marry that position?  Play the swings and churn shares during the lulls; there’s not even a point to starting on a big neg-risk position now, in my opinion.

January/February/March is decision and announcement time, so expect those markets to find their resolutions (and for candidates’ prices to pop a bit when they’re in the news).  After that, watch the polls and social media.  Is someone catching fire?  Building a loyal, Bernie-bro-like fanbase?  Expect their price to become inflated.  But ultimately it’s gonna take until September before we start getting a clear idea of what’s happening, so settle in folks.

MS Special Run-off Election Preview

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Results

NYT | DDHQ | CNN | SoS

Round 1: NYT | CNN

Markets

Espy v Hyde-Smith | DvR |GOPSEN | MoV | Counties | Turnout

Preview

Will Espy pull off a miracle upset?  Well, probably not.  He needs to maintain or boost turnout in the delta, the black belt, and in Jackson compared to round one while hoping that rural white turnout declines such that the margins in Biloxi, Tupelo, and counties like Rankin and Pearl River aren’t enough to bury him.  Some turnout decline is expected in a run-off, but Espy really needs a perfect storm to pull this off, his opponent’s gaffes notwithstanding.

Elsewhere on PI

It’s been a while since a weekly preview (I blame Thanksgiving travel) but basically we’re looking at a normal RDT finish, a potentially exciting PT finish, and boring struggles to escape B1 in WHT and VPT.  Meanwhile if you want to sink your teeth into a rules debate, there’s a great one in Trump testify (a bit of a quiet simmer at the moment).  Manafort is in the news so his markets are jittering around a bit as people wonder if he’ll catch the pardon he’s been fishing for (supposedly).

 

jipkin’s PredictIt Preview – week of 11/12/2018

(New to PredictIt?  See here for brief overview of what the site is.)

Midterms Mayhem

How’s everybody feeling?  Did we all make riches upon riches last week?  Congratulations to those that did and to those that didn’t, it’s a new week and it’s time to recoup!  Personally I’m rather “meh”.  Made money of course (technically my best week ever on PredictIt) but not nearly as much as I should have given that I saw several very profitable spots as they happened but was (as usual) unable to pull the trigger.  My big missed opportunities of the night:

  • AZSEN (should have double-maxed in single digits, even though McSally was still favored at the time it was hugely +EV [expected value])
  • Should also have maxed Seat Flips and GOPSEN on the AZSEN flip
  • Should have maxed Tester when his price panicked into the 50s (and accordingly in GOPSEN; Seat Flips).
  • Should have gone harder in WIGOV, where it was obvious the missing batch of votes would flip the race.
  • Should have gone harder in CTGOV, where it was obvious the vote out would flip the market.
  • Should have gone harder in GA06 because all the results sites were behind the Secretary of State which was showing a virtually tied race despite the market being 70/30 for Handel.
  • Should have fished for shares at 5-10c instead of 1-3c in the California markets.  I did at least hold my CA-45 Dem shares instead of dumping them.
  • Plenty of other little subpar decisions.

Midterm Mop-up

But all of that is (mostly) behind us.  This week we continue with mop-up in the midterms, where most of the action so far has been in AZSEN (all but over) and AZSEN MoV (getting to be over – needs the fabled McSally-favored buckets of votes in Maricopa to finally show up to avoid getting to 1.8% or more).  But it’s also worth keeping your eye this week on results reported out of UT04, NY22, TX23, the Californias (CA39 and CA45 especially), and maybe even GA07.  Flips are still technically possible in all of these.  In principle they can affect DEMHOUSE, but that one seems all but over.

I also hear that we might get a House popular vote market today or this week, which will be very interesting to play, and if you really need a new election there’s always the Espy v. Hyde-Smith run-off, which has become a touch spicier after Senator Hyde-Smith joked about attending a public hanging (apparently that’s a figure of speech???).

Tweets

(New to tweet markets?  Check out my guides starting here.)

RDT | PT | VPT | WHT

Man it feels weird to be thinking about tweets again.  Donny’s got a lot of work to do to escape B1 and while I’m praying he finds two retweet sprees in him (of random stuff in his feed, maybe?) I also don’t really see it.  Over in Mikey land (which happens to be Asia this week), people are bullish his spate of meetings with foreign leaders will produce a big week.  I don’t disagree, but I’d also like to see him hit up plenty of retweets as well just to ensure that he gets there.

Finally WHT/PT are in strange spots where PT bettors think we’re going high and WHT bettors think we’re going low (odd given their correlation).  Personally I think WHT has been lulled into a sense of complacency by how slow the pre-election weeks were and B1 might get punished there.  Or my handful of NO shares gets cucked.  I haven’t looked up what’s on the agenda anyway so it might just be a quiet week after all.

Polls

(New to polling markets?  Check out my guides starting here.)

538 TA | RCP TA | Ras | RCP EoM TA

RIP generic ballot markets.  Also are we even going to get any polls?  Seems like it will just be the usual weeklies and not much else.  Maybe the biggest question of them all: does RCP update their average?  They haven’t touched it since Tuesday, much to the chagrin of last week’s market.  Could produce quite the memes if nothing happens this week too…   Okay nevermind literally as I finished the “…” there we got the update.  Back to business as usual.

 

Disclaimer: I probably have positions or intend to take positions in just about all the markets I discuss herein.  You should always do your own research prior to making any investment decision. You should consider my advice and knowledge I share to be fundamentally biased in its presentation and selection by my own financial incentives.  While I do not knowingly lie I certainly do knowingly omit information that I think gives me an edge.

What to Buy, What to Buy

One week to go and oh my god what should I bet on???

There’s a dizzyingly wonderful surfeit of PredictIt markets to trade in this election.  While I created The Spreadsheet in part to help people find ones that interest them, it occurs to me that even that can be a bit of information overload.  So in this post, I’ll go through and package together a few market gift baskets to fit any trader’s needs.

Ultra-Safe Free* Money

Do you hate risk?  Does the idea of a 1-5% return sound just fine and dandy to you?  Do you think Bernie Sanders is going to be re-elected?  (He is).  Well then do I have some markets for you!

House: CO-05, CT-05, FL-17, MD-06, MS-03, NY-09, NY-14, PA-09PA-15, SC-04, TX-05, TX-06, TX-29.  Throw in NH-01, NJ-02, PA-06, and PA-17 if you want to live a little and maybe tack on MN-07 if there’s still a part of you that realizes just a bit of risk is good in life.

Senate: Dianne Feinstein, Angus King, Elizabeth Warren, Deb Fischer, Bernie Sanders, and Tim KaineMartin Heinrich as long as you can convince yourself the Gary Johnson boogeyman ain’t gonna get ya (he won’t).

Governor: California, ColoradoIllinois, Maryland, Tennessee, Rhode IslandSouth Carolina.  A case to be made for Arizona, New Hampshire, and Pennsylvania but those are one tick up on the spiciness scale so don’t go too crazy now!

Wow there are a lot of these!  Go get yourself some pennies!

*Don’t hate me if one of these flips, see the disclaimer at the bottom, etc.

“Conventional Wisdom is Never Wrong” 

Want to make a lot of bets that should almost certainly win except for one or two that you can’t predict ahead of time and end up costing you everything when you can’t escape in time?  What’s a big election night without a little salt anyway?  Here are the markets where the favorites *should* win except some are underpriced and others are correctly priced and there are at least conceivable scenarios where any of them flip.

House: AZ-02, CA-21, CA-22, CA-49, CO-06, IA-01, MN-02, NJ-11, TX-21, TX-23, VA-10.

Senate:  Debbie Stabenow, Tina Smith, Cindy-Hyde Smith, Bob Menendez, Kevin Cramer, Sherrod Brown, Bob Casey, Jr., Marsha Blackburn, Ted Cruz, Joe Manchin, Tammy Baldwin.

Governor: Maine, Michigan, Minnesota.

If you read this list and thought “Wait a minute you idiot, _______ could totally lose” then I did a good job.  The favorite wins in most of these, but I’ll stick my neck out and predict at least one of these flips.

The Liberal Dreamcrusher

Want to make libs like me cry like it’s 2016 all over again?  Well, you’ll find plenty of your kindred spirits in places like GOPSEN and GOPHOUSE.  But we need to go beyond that.  My picks for you for the ultimate in election night schadenfreude:

  • Obviously, you’re (already) betting on McSally in AZSEN, Cruz in TXSEN, DeSantis in FLGOV, Kemp in GAGOV, and Hawley in MOSEN.
  • In the House, you want Andy Barr in KY-06 (if you’re going full dreamcrusher you gotta pick the R in the first big House race of the night).  You want Dave Brat in VA-07.  You want John Faso in NY-19.  And you even want Carol Miller in WV-03 (blue dog democrats must also have their hearts crushed).
  • Why not get a little bit aggressive in the House?  Jason Lewis, the misogynist in MN-02 deserves your bet.  (As do, of course, Duncan Hunter in CA-50 and Chris Collins in NY-27 but these aren’t aggressive bets).  And let’s throw in a bet on Julia Salazar in FL-27 – how great would it be if a former Clintonite loses in a District with a huge Dem lean?
  • You already knew this, but Dems want Kobach to lose which means you will delight in his KSGOV victory.  But why stop there?  Maximize your tear-harvesting with bets against Kate Brown in ORGOV and on Scott Walker in WIGOV.
  • Hey!  I just realized you’re probably the type that wants to bet against women doing well this cycle.  Well take the winnings you’ve liberated from the rest of us soyboys and go spend it betting against women making big gains in the House, Senate, and Governor’s mansions.
  • Finally, don’t bet on huge R gains in GOPHOUSE and GOPSEN.  You may be motivated purely by partisanship but you’re not stupid.  Instead, a carefully placed bet on 217-225 in GOPHOUSE is probably worth it to you if you really want to bet on them hanging on (cheaper than the other contracts), while 53-55 seems like the sweet spot in GOPSEN.  And what are Dems even thinking in DEMHOUSE?  No way do they get more than 251 seats!  Obviously you should fill my single digit orders so I can complete my hedge bet against that bracket for the free dime in profit.

SURF’S UP BLUE WAVE BABY

Okay, listen.  You know that Dem enthusiasm is through the roof.  You’ve followed the special election results.  You’re practically salivating staring at that long, long, beautiful tail of Democratic seat pick-up probabilities that 538 has.  This is it – the all-too satisfying prelude to the cosmic comeuppance awaiting Trump in 2020.  But what to bet on?

  •  You’re already like sextuple maxed on Dems winning the House [Ed. note: I actually should do this].  But what to do in DEMHOUSE?  Who am I kidding?  If we’re not hedging the whole thing (my play) then we’re going long long long on 240+ which PredictIt prices at ~25c while 538 has it at 33c.  Muh 8c value!
  • Bet the opposite of everything the Liberal Dreamcrusher is betting on.
  • Tack on some long-shot D bets in the House.  If it’s gonna be a Wave after all, NE-02, MN-08, IL-12, IL-13, GA-07, FL-15, CA-21, TX-21, TX-23, and WI-01 could all fall.  By pure probability, at least one of them should go Dem, right??
  • You’re also going to go hard in some of the Governor’s markets (not covered by betting against the Lib Dreamcrusher).  SDGOV?  Gimme gimme.  OKGOV?  Okay then.  MEGOV?  Yes, please.  IAGOV?  If you say so!
  • Because you’re also a smart trader, you see some opportunities in House turnover and in How many Senate seats change party hands as well….

The Thinking Trader

Ah yes, you.  Too good for the rest of us.  You’ll get involved in some elections, particularly those that are very mispriced or for which you have some dumb early vote model or which take so long to count their votes you can create elaborate turnout models for them.  But mainly you’re here to outwit us all, and that means full focus on the boutique markets where you can’t lose everything at once.  You’re well ahead of the game when it comes to How many women will win in the House, Senate, and Governor’s races.  You have already mapped out multiple paths in the Senate so that you can play GOPSEN, narrowest Senate race, and How many seats change party hands.  And you know exactly which races to follow for House turnover.

Oh god there are so many markets just tell me where to focus

Okay, okay!  If you’re new and overwhelmed, I suggest you focus your energies entirely on GOPSEN and DEMHOUSE.  Venture out from here as things catch your eye, but don’t get caught out betting on a race you don’t understand.  These two are going to be incredibly high volume, very very swing-y, and are intellectually challenging to boot.  You can probably just make money penny and nickel-flipping in here on election night provided the site can handle all the trades.  And in these two markets, the winning bracket right now, whatever it might be, is very cheap.  So there’s always the chance you get lucky!

 


 

Okay there are so many more combinations of markets you can come up with.  Early night markets, late night markets, etc.  But this should be enough to give you some fresh ideas or get you started.  For the rest, just consult The Spreadsheet to see what might interest you.

 

Disclaimer: I probably have positions or intend to take positions in just about all the markets I discuss herein.  You should always do your own research prior to making any investment decision. You should consider my advice and knowledge I share to be fundamentally biased in its presentation and selection by my own financial incentives.  While I do not knowingly lie I certainly do knowingly omit information that I think gives me an edge.

 

 

jipkin’s PredictIt Preview – Week of 10/29/2018

One.  Week.  To.  Go.

Last week I put out a rough outline of what we’ll know when for election night.  But before we get there, we have one more week of polls.  One more week of breaking news.  One more week of markets drifting one way or the other.

Late Market Shifts?

In 2016, markets moved strongly towards Hillary on election day and the day before as it seemed people herded towards the conventional wisdom.  By the time the early vote was reporting in Florida she was at 95c!  Are markets wiser this time?  I honestly have no idea, but absent some major news break I do half-expect markets for D’s chances in the House to drift into the 70s by election day.  The same will also be true in many of the Senate contests – I wouldn’t be surprised if Ted Cruz hits 90c or something before any votes are counted.

Make a Plan

If this is your first election, let alone major election, betting on PI then I strongly recommend you go into it with a little bit more thought than just “I am betting on _____ to win”  and walking away.  Because you probably won’t just walk away…. you’ll be on the site, checking the prices, asking if you should buy more or sell or dump or whatever.  People tend to make worse decisions when they haven’t done any preparations (or at least I do).

So here’s a very non-exhaustive list of things you should think about:

  • For the election contract I’m trading in, are there other results that will influence its pricing before the actual votes are counted?  (i.e. If Braun is beating Donnelly, what happens to prices in McCaskill?)
  • Where are the votes coming from?  For most states, rural counties report before urban ones, tending to favor Republicans in the early going of election-day vote.  If you really want to prepare, have some county-specific benchmarks going in.
  • Does the race have early vote and election-day vote?  What fraction of total turnout will be in EV vs ED?
  • If you’re playing in the high-volume Seats markets (GOPHOUSE, DEMHOUSE, GOPSEN), do you have a solid handle of what districts and races are left to report results that could actually flip the current bracket?  (Hint: use The Spreadsheet as a starting point).

Tweets

(New to tweet markets?  Read my guides starting here.)

RDT | PT | VPT | WHT

It’s almost a full week of campaigning for Donny and Mike.  (And will be through the midterms).  Our President has been in the mood to tweet quite a bit but he keeps getting thwarted by tragedies that require him to exercise restraint and “tone it down”.  Not that that stopped him from offering up some baseball commentary two days ago, but there you go.  We have a schedule-less Monday for him right now and so far only three tweets to show for it.  The day is young of course but I think things are shaping up for a pretty standard middle-bracket war on Wednesday.

The rest of them are all going to do their best to clear the rather low B1 hurdles in front of them, but I won’t be shocked if one or two fail in that endeavor.  I’m rooting for a big surprise (as always) but feeling like it’s going to largely be a slow week in tweets.

Polls

(New to polling markets?  Read my guides starting here.)

538 TA | 538 Ballot | RCP TA | RCP Ballot | RCP EoM TA

With the final days of October upon us, we should expect a final round of pre-election polls from most of the big players (that said, it looks like Q is doing state polling).  A couple of the networks might sit it out or wait til early next week but I hope most will squeeze something out.  The new RCP ballot market interests me a lot as the numbers that get posted there this week start to actually matter for final resolution.  RCP October TA is probably cooked but let’s see what the Harvard-Harris fairy brings.

 

 

Disclaimer: I probably have positions or intend to take positions in just about all the markets I discuss herein.  You should always do your own research prior to making any investment decision. You should consider my advice and knowledge I share to be fundamentally biased in its presentation and selection by my own financial incentives.  While I do not knowingly lie I certainly do knowingly omit information that I think gives me an edge.

A Rough Preview of Election Night 2018

Folks, we are under two weeks to go! How soon can we know on election night whether things are going well for Democrats or Republicans?  I have a lot of (incomplete) thoughts on this as I’ve been mentally preparing for election night, so here we go.

The Needle

The Needle is Master.  All praise be unto The Needle and to its Holy Wiggliness.

Yes, the NYT Needle is coming back.  In markets where we’ve had Needles, this tends to be the dominant signal for traders.  It’s free.  It’s easy to understand, and it directly translates to market prices.  When we have a very complicated 435-part jigsaw puzzle to put together, having a model do some of the work in real-time makes things a lot more straightforward.  You don’t have to do any hard thinking yourself about what the results so far in KY-06 mean for districts with similar demographics if the model is doing it for you.  That said, it’s not clear The Needle will be predicting number of seat pick-ups or just odds of one party controlling each House, so it’s worth plotting out other bits of data to pay attention to.  (I also wouldn’t be surprised if we get Needles for each individual race, which would really make them all-important).

Election Night: The Early Going

Speaking of Kentucky, the first states to report are Kentucky and Indiana, which means the first results bettors (and pundits) will be eagerly dissecting come from KY-06 and IN-SEN.  Geoffrey Skelley went back and watched 2016 over again and found that only 7% of the vote in KY came in by 7 pm, though this increased to 50% by 8pm.  Still, these will be the only data* we have in the pre-7 pm hour and I expect jumpy traders to make moves on it.  A lot rides on McGrath and Barr!  Similarly, if Donnelly is leading early, I expect two or three brackets in GOPSEN to finally die right then and there (there is no path to 56+ that doesn’t include Donnelly’s seat).  If it’s Braun, those same brackets might giddily head moonward (at the same time, D’s chances of holding the Senate will crash from wherever they start the night at – which might not be that far).

*(Except for the Early Vote stats, and maybe exit polls, etc.)

Other Early Indicators

Let’s not forget that there are plenty of other House districts that will be reporting results in IN and KY while our attention is focused on KY-06 and Donnelly.  Here the issue is not so much who will win (all of them are Safe seats), but by how much.  One thing I will be doing is running a script that compares the election results from each House district to what the forecasted margin for that district was (using 538’s and CNN’s models).  How close is it to the median forecasted margin?  The high?  The low?  The reliability here will be a bit suspect with how few votes will be counted in the early going (and given that they may be lopsidedly from urban or rural areas) so I intend to be cautious with it, but I do still think it’s worth paying attention to.

What if PredictIt Slows to a Crawl and Trades Get Backlogged?

Now, I’ve written to PredictIt several times over the past two years.  I’ve spoken in person with folks there about how important it is to have excess bandwidth or technical capacity for election night.  They know it could be an issue and they desperately want to avoid it.  But we also can’t ignore that for election night 2016, the website was basically unusable from 8:30 onward.  Similarly, for Jones v Moore in the Alabama Special last December, trading became impossible around 9:30.  During Kavanaugh, trading functioned normally and smoothly, but other site features (like notifications, and the page updating your shares and offers without refreshing) were delayed sometimes by hours (I’m okay with this, so long as trades work).

If this happens again – which it could – you’re basically going to be stuck riding your positions or hoping your queued trades go through before the price changes too much.  It is an incredibly frustrating feeling.  So be ready for it.  If I’m unsure how things are going in the House by 8:30 pm, I plan to be out of all but my “safe” positions.

The Madness

If trading is active, the time period from 8:00 to 11:00 will be shear mayhem.  Florida, Georgia, Ohio, Virginia, North Carolina, West Virginia, Missouri… the list goes on and on (and I’ll have a spreadsheet for you all later, don’t worry).  Governor’s races.  Senate races.  House races.  House control.  How many seats Ds or Rs will hold.  Everything will be going nuts.  If House control is going to break for Dems, it will be clear by around 9-9:30 (perhaps earlier if VA and FL are counting fast).  If it’s going to be an all-night slug-fest, that too will be clear then.  If the servers don’t overload my brain surely will trying to keep up with all the markets in play.

The Western Front

From 9:00 onward (yes this overlaps with The Madness), attention turns to the Western states.  Texas, Arizona, North Dakota, South Dakota, Nevada, Kansas, Montana, etc.  Things should be calmer by now.  The House control picture will be coming into focus at this point.  Senate control meanwhile might still depend on these states (along with Balance of Power).  Either way the number of seats markets (DEMHOUSE, GOPHOUSE, and GOPSEN) will be the main attraction during this period.  (And don’t forget: we will likely get MoV markets for many of the Senate races that will still be ongoing).

The Point of Thorough Exhaustion

As we get to midnight and beyond, there will be only a handful of still active markets (MoVs, maybe GOPSEN, maybe OR-GOV, and many of the CA House markets).  Drink your favorite energy beverage and keep going, my friends.  (If PredictIt does get stuffed up, this is around when it would start coming back).

Oh and Don’t Forget the Niche Markets

How many women will be in the House?  The Senate?  Governor’s mansions?

How much turnover will there be in the House?

How many seats change hands in the Senate?

I intend to keep checking in on these since I’ve done the prep work for them enough to keep track of which districts and races matter and so forth.  For those that haven’t yet, you can read my (early) takes on these markets here and here.

The Aftermath

It’s quite conceivable that a few MoV markets and the fate of several House seats in CA/WA won’t be known on election night.  Instead, we’ll have to wait for additional mail-in ballots to arrive and be tabulated over the coming weeks.  Hopefully we’ll get at least one or two great markets out of these that will be a lot higher volume than normal as new traders look to spend their winnings.  (Reminder that in 2016, Darrell Issa went to 97c on election night only to fall to 70c as additional mail-in ballots showed his lead narrowing and narrowing – he ended up hanging on in the end of course).

The Contingent Markets

Election night is a Tuesday, and the Trump tweets market ends Wednesday morning.  How much will he tweet that morning?  How much does that depend on the outcome?  What will the impeachment markets do?  Will anyone resign the morning after, a la 2006?

~~~~~~~~~~~

Okay, that’s your rough overview of election night.  More to come, including a spreadsheet with markets listed by closing time.  While you wait, don’t forget to check out The Spreadsheet for comparison of market prices to what various expert forecasters and modelers are saying.

 

Disclaimer: I probably have positions or intend to take positions in just about all the markets I discuss herein.  You should always do your own research prior to making any investment decision. You should consider my advice and knowledge I share to be fundamentally biased in its presentation and selection by my own financial incentives.  While I do not knowingly lie I certainly do knowingly omit information that I think gives me an edge.

 

 

 

jipkin’s PredictIt Preview – Week of 10/22/2018

Just over two weeks to go!

Midterm spreadsheet | Other midterm resources

If you haven’t yet, it’s time to start getting your preparations in order for the big night.  I’ll have some content for you later this week with some thoughts for what things to watch for to get as early a jump as possible on which way things are breaking.

In the meantime, I’ve updated The Spreadsheet to include several more models on the House and Senate page (538 lite and deluxe and all three for governors, Noah Rudnick’s fundamentals model, and Harry Enten’s CNN models).  With these new data, we have enough to calculate a ‘model consensus’ for each individual race.  For instance, the Senate races look like this:

AZ mispriced.png
To get the ‘model consensus’ I discard the highest and lowest modeled win probabilities and then average the rest.  Then I calculate how different the PredictIt price is from that consensus.

The story here is largely the same as I noted (with fewer data) in my Markets vs Models blog post.  Many individual Senate races are over 15c red-shifted (priced more favorably for Republicans) compared to what the model consensus says.  There are several possible reasons for this.  It could be that these markets are much more sensitive to recency, and are more highly weighting new polls rather than a fuller look including old polls.  It could be that the low-information bettors that tend to be conservative-leaning are more comfortable with these Senate races where they feel like they can sink their teeth into each candidate.  It could be left-over inertia from the Kavanaugh bump with the market correcting only very slowly because of people penny-flipping shares.  Or it could be that PredictIt bettors are just on to something in the Senate!  We will get lots more polling this week (including a rather eye-opening one from CNN in Florida today) and we’ll see if/how markets correct in response.

The Kavanaugh Bump fades

Did you feel it?  Some time around last Tuesday/Wednesday, Democrats started performing better again in district-level polling.  Patrick Ruffini, who’s been modeling this based on the NYT microdata, also notes the shift.  We’re definitely not back at early September numbers for the Dems, but it’s a marked improvement since Kavanaugh reminded Republicans about voting.  In the end, the story I suspect will be as its been for all the primaries and special elections since Trump was elected: Dems are fired up and they’re going to vote in big numbers.  The only question is how many Rs join them.

As always, keep an eye on the NYT polls to see how the winds are blowing.

Tweets

(New to tweet markets?  Read my guides starting here.)

RDT | PT | VPT | WHT

Last week I said that B7 in RDT really wanted to win but would ultimately be denied the rose… and I was wrong!  To my credit, it did die all the way to single digits before an epic Tuesday brought it back to life.  We’re in a quasi-similar spot this week.  Again B7 wants to win.  Again it feels like the tweets might not be there.  Will Donny again rescue it?

PT/WHT and VPT are pricing in a quiet campaign-related week at the moment, with B1 taking comfortable leads in WHT and VPT.  I’ll root for something like last Wednesday’s massacre to happen in WHT but I don’t really expect it.  Pence is known for finding ways to tweet when you don’t expect him to… but he’s starting in a deep hole here.  As for Scavino’s Funhouse of Pain?  In the short term things look good for B1.  But one must always tread cautiously there.

Polls

(New to polling markets?  Read my guides starting here.)

538 TA | 538 Ballot | RCP TA Weekly | RCP TA Monthly

Aside from individual race and Senate polls (hoping for another brace of NBC/Marists this week), it should be an interesting one in the polling markets.  We just got a nice NBC that might spike spiked 538 TA (and has implications for RCP and RCP October).  Fox and CBS just came but I think the usual weeklies will give us enough action anyway.

Brazil Run-Off

Winner | Margin of Victory| Winner vote share over 60%?

Hey this is a thing that’s happening next Sunday!  My limited understanding is that Bolsonaro is an asshole and he’s going to win and that’s about all I know.  Here’s the wiki on it if you want a brief overview.  I’ll do a preview for it later in the week after I do a bit more research.

 

Disclaimer: I probably have positions or intend to take positions in just about all the markets I discuss herein.  You should always do your own research prior to making any investment decision. You should consider my advice and knowledge I share to be fundamentally biased in its presentation and selection by my own financial incentives.  While I do not knowingly lie I certainly do knowingly omit information that I think gives me an edge.