So this is like fantasy league for politics?
Who gives a rat's?
I’ve been going back & forth with John Valentine over this market thingie and he called me a liar. I will be copying some of the posts over to this thread and post responses here because this is the right place to have the discussion.
http://www.freerepublic.com/focus/news/1926425/posts?page=151
To: John Valentine
Kevmo: All you are saying is that his contracts are valued low
JV: Au Contraire, mon amie. I am saying that his (Hunters) contracts are valued (i.e. priced) too HIGH.
***You say oranges are bright orange, I say apples are not colored orange. It is 2 different things. You ARE saying that Hunters contract is valued (priced) low. Then you say its priced too high, which is simply another way of saying that its valued (priced) low.
You are really in need of some basic education in economics, markets and so on.
***If you honestly think that is true then you will not mind that I copy this response over on my original thread and continue the dialog there. Readers who are interested can go over there if theyre curious about how this turns out, and we will no longer be distracting freepers from the original intent of the thread, which was that Thompson Argues Polls Will Change.
Maybe youre good at figuring poker odds, and that may be a skill you can use. But, you have got a view of market operation that is so ass backwards that it is amusing in one sense and tragic in another.
***Which is why this needs to be stated on the Intrade thread. If what you say is true, theyll be all over me for it. Hint: Theyre not. And since you have so much trouble with my theory we should be having this discussion on that thread.
My theory was that a person could put $100 down on Hunter today and if his Intrade #s started tracking the polling data (Ron Paul and Huckabee the 2 most recent examples), the guy would get 40X return on investment..
Well, that isnt really a theory, its more of an observation that if somebody owns an asset at a $1 buy in price and the asset goes to $40, the holder has made a 40X return on investment. Sort of trivial, in fact.
***Its not a theory, its a trivial observation? Then how can you argue against it. Your obvious problem is with the hypothetical: if his Intrade #s started tracking the polling data (Ron Paul and Huckabee the 2 most recent examples)
The issue in fact isnt that at all, it is whether the price of a proposition on Intrade such as Duncan Hunter to be the Republican Nominee for President would or should be linked to the standing in the popularity polls. Clearly there is no direct link.
***Obviously, or I wouldnt even be able to put forth this strategy in the first place. Duh. But there is a correlation, which is something that the Intraders acknowledge. It is difficult to quantify that correlation, but there does appear to be one, and my two recent cited examples are cases for it. Im sure there are others.
It is very easy to imagine a time when the field has winnowed and there are only two candidates left, one with say 70% popularity and the other with 30%. I would expect the prices on Intrade to be more like $95 for the 70% guy and $5 for the 30% guy. Why? Because these contracts do not measure percent popularity.
***I agree with this. Whats your problem? This happens inexorably as the election day draws closer. You can see it in the Intrade graphs. And one shining example of how this is correct is that Intrade showed Thompson declining rapidly, trading at ~8% when his polls showed him in the 20% range or so. Im not sure of the exact figures, but it was telling that the Intrade numbers were leading indicators and the poll numbers were the laggers.
Is there a chance that Duncan Hunter contracts could come off the 10 cent price? Sure. I wouldnt hold my breath.
But again thats not what you have been arguing.
***That is precisely what Ive been arguing. The fact that you tell me that it is not what Ive been arguing shows that YOU did not understand, and that you have been engaging in straw argumentation. In another post I put the chances of Hunters contracts going to 4% at about 2 to 1, and it is an opportunity to go for a 40 to 1 contract. Maybe the chances are 3 to 1, maybe theyre 100 to 1, I dont see that quantified anywhere. But he made it to 4%, getting to 5% is an incremental effort, not a quantum one.
In fact Duncan Hunter contracts are too expensive, and thats why there are no buyers. If they were cheaper, maybe buyers would come to the party, but we cant find out because the next tick down is zero. Theres your liquidity issue explained for you again.
***The Duncan Hunter contracts are valued at 0.1. Thats their price. You cannot argue that it is not their price. Someone is asking to sell them at 0.1 so that is their value because you could buy them at 0.1. To argue that they are too expensive is such an overbloated argument that it is useless, and furthermore calling me a liar over this semantic issue is despicable. Who cares if the next tick down is zero? You focus on arguing back & forth over this issue and yet you overlook the fact that Hunter contracts are a bargain. You went out of your way to get onto this ridiculous issue so that you could show Hunters contracts in the most negative light possible, that somehow the market considers them worthless. But here I am pointing out that theres an entirely untapped market of buyers for these contracts: Hunter supporters. So by trying to attract and inject a whole new group of Intraders there would be buyers for those contracts, and they could get the ball rolling. Yes, they could. Your argument is that the existing players havent rolled the ball. My argument is that a bunch of Hunter supporters could roll this ball and make some money. It is not a lie, and by calling me a liar you have shown yourself to be pathetic.
One final point: There is some dead certain money to be made on the Intrade exchange, and that is in shorting Ron Paul. The profit will be small, but is a dead certain lock.
***I agree. If there were any group I would suspect of trying to manipulate the market, it would be the Paulestinians, and that is what I suspected when the price for Paul was 9 freeping dollars when he was still sort of an asterisk in the polls. But then he made $4M in one day and the whole episode was greeted with a yawn at Intrade. So it probably was not a market manipulation.
I will be copying this post and others onto the Duncan Hunter Smart Money thread, and my future responses to this thread over these topics will be over at that other thread.
153 posted on 11/16/2007 10:05:09 PM PST by Kevmo (We should withdraw from Iraq via Tehran. And Duncan Hunter is just the man to get that job done.)
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So this is like fantasy league for politics? Who gives a rat’s?
***You didn’t even read the thread. Educate yourself. Start here.
The Efficacy Of Prediction Markets The Liberty Papers ^ | November 8, 2007 | Brad Warbiany http://www.freerepublic.com/focus/f-news/1922961/posts
Posted on 11/08/2007 12:21:43 PM PST by E. Pluribus Unum