I decided to put my money where my prognosticating mouth is and plunked $4,000 on predictit.org to use my political junkie skills for monetary gain.
First, an explanation: A share price represents the market’s assessment of the probability an event will occur; for example, $0.50 means there is a 50% chance it will occur.
Here is what I predicted yesterday:
I bet $849.60 that Biden loses, paying an average share price of $0.45. Max payout: $1,784.16.
I bet $849.64 that the Democrats do not win the presidency, paying an average share price of $0.44. Max payout: $1,822.86.
I bet $423.20 that the Democrats retain the House and that the Republicans retain the Senate (50 Republicans + Pence counts as a win), paying an average share price of $0.40. Max payout: $994.52.
The Democrats now have 232 of the 431 non-vacant seats in the House. This corresponds to an equivalent of 234 of 435. They need 218 to retain their majority. I bet $1,093.65 that the Democrats win 218 to 237 seats. This market is the most mis-priced, I think, because folks are underestimating Trump’s coattails. There is a consensus that the House will enlarge their majority, and I just don’t think that’s the case. However, Trump will almost certainly continue to have difficulty in passing his agenda, except for the judiciary, which does not involve the House in the process of confirmation.
I think Ohio is a slam dunk for Trump–even if Trump loses, he’ll win Ohio. It was underpriced at $0.65, so I snatched up $312.65 of it. Max payout: $464.17.
TX-22 and TX-24 are solidly Republican. The shares were trading too low at $0.54, so I bought $465.76 total Rep yes and Dem no in both for a max payout of $832.28.
I really will be surprised if I’m wrong on any of this. As long as I’m right about Trump beating Biden, the rest is a freeroll.
What do you think?