Update 2017.08.15: I’ve added an image of the webpage where I placed the bet, which obviously doesn’t perfectly reflect the way it looked when I wrote this post.
In 2012 I wrote a post in which I suggested betting against people who believed that the world was coming to an end. Unfortunately I didn’t know how to find such people.
I recently discovered that you can currently go onto betting sites and get ~3:1 odds on a bet that Trump will be the Republican nominee (so if he’s the nominee, you get $3; if he isn’t, you lose $1). I bet some money on PredictIt.org on December 16 (about a week ago) at 3:1 odds that he’d do it, not because I’m totally convinced that he will, but because:
- Regardless of who the candidate is, those odds seem suspicious to me for someone who appears to be so far ahead in the polls,
- I don’t find it that hard to believe that the party that had Sarah Palin on the ticket as the VP nominee might nominate Trump for President,
- I find it harder to believe that Republican delegates would vote against Trump even if he won their state and was leading in the national polls,
- The betting market for this election appears to be relatively small compared to the financial markets and so it seems there’s more likely to be exploitable inefficiencies in the way people are making bets,
- The media has been repeatedly wrong about predicting Trump’s fall in the polls,
- I’ve read that many successful investors / entrepreneurs got experience picking stocks / making bets when they were younger, and I’m trying to copy the habits of successful people, and
- I have an interest in finance / trading / value investing but have avoided dabbling in the financial markets because there’s so much competition that I doubt I would have a competitive advantage, and smaller betting markets seem like a way to get experience in a less-competitive environment.
So I’m treating this primarily as a learning experience.
How I could be wrong
- A persuasive counter-argument I’ve heard is that it’s still early enough that anything could happen. I agree with that. I just don’t think that the odds should be 3:1 against someone with the kind of lead Trump appears to have.
- Another point I’ve heard is that Trump’s support is largely among people who have been less likely to vote in past elections, and that this low turnout is likely continue into this election.
- Another point I’ve heard is that Trump’s get-out-the-vote efforts are weaker than those of his opponents, and that this could lead to a difference between his polling numbers and the actual vote tallies.
- I think a danger for Trump that the media doesn’t seem to be talking about is character assassination; Trump seems to be filling the role of the “straight-talking, no-nonsense” candidate that Chris Christie was supposed to be playing in this election, until Chris Christie’s reputation was severely damaged by the George Washington Bridge lane closure scandal (“Bridgegate”). It seems plausible that what happened to Christie could happen to Trump.
- The problem with waiting for a Trump-character-assassination before the Republican nomination is that:
- Democrats don’t seem to feel an incentive to use character assassination at the moment because they have reason to believe that they’ll have an easier time winning the general election if Trump wins the Republican nomination.
- The other Republican candidates seem to not want to risk being associated with going after Trump because they’re worried about ending up on the bad side of Trump’s supporters.
- I think the best way for other Republican candidates to go after Trump would be to paint him as a liar. They could find people from Trump’s past to tell Trump’s supporters that Trump has historically loved to make promises that he can’t–and has no intention to–deliver. This way the other Republican candidates can avoid criticizing the controversial proposals that Trump’s supporters seem to love. However, to execute this strategy would require the candidates to be very aggressive about researching Trump’s past in a very short amount of time.
- The problem with waiting for a Trump-character-assassination before the Republican nomination is that:
Ultimately I don’t like this way of placing bets; I’d much rather be Ed Thorp with his mathematically-proven blackjack system than someone who bets off a hunch. But this exercise is turning out to be a very useful way to motivate myself to get more practice at evaluating bets; I’m already thinking about using web-scrapers and machine learning to get an edge that I could be more confident about.
I’m keeping more-detailed notes here.
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