Why didn’t you bet with the crowd, then? You could have made a killing at the time when Joe Biden was under 50.

Posted on August 25, 2008 by Chris F. Masse

About Chris F. Masse

Founder and President of Midas Oracle
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7 Responses to Why didn’t you bet with the crowd, then? You could have made a killing at the time when Joe Biden was under 50.

  1. Caveat Bettor says:
    August 25, 2008 at 11:27 AM

    Joe Biden is not very bright, has some well known skeletons in his closet, puts his foot in his mouth more than any other senator, and is not from a critical state.

    I don’t think your strategy of buying contract over 50% is going to make you much money.

    I’ve made one deposit and more than one withdrawal in Tradesports/Intrade, and continue to have positive returns despite the fees, inflation, and lack of interest payments.

    I estimate that less than 25% of traders can say that.

  2. Chris F. Masse says:
    August 25, 2008 at 11:34 AM

    I respectfully disagree with you. If you have “faith” in prediction markets, then that means you believe that the market has more predictive power than one individual over the long term.
    Happy to hear that you’re winning this game.

  3. Caveat Bettor says:
    August 25, 2008 at 3:31 PM

    Chris, I think we are agreeing. Of course I believe a liquid market with small fees will have more predictive power than one individual. Are you saying that, as an individual trading in a market, I am contradicting this belief?

  4. Chris F. Masse says:
    August 25, 2008 at 4:00 PM

    Cav, it’s more complicated than I thought. Jason Ruspini was kind enough to educate me by e-mail. I asked him whether he will comment here or post or whatever. Stay tuned.

  5. Jason Ruspini says:
    August 25, 2008 at 7:16 PM

    It’s just that referring to the markets for a best guess and trading them profitably are different things.  If you believe in the markets and their calibration and always buy the favorite, your long-run expected profit will be zero minus commissions.. it doesn’t make a difference if the favorite is above or below 50%.  However, since it appears that longshots are usually over-bought, I would guess that buying the favorite according to a range of trading systems would be profitable.. before commissions, at least.  The infrequency of these kinds of markets makes evaluation of such rules very hard though.

  6. Caveat Bettor says:
    August 25, 2008 at 9:23 PM

    I agree Jason.  Spoken like a trader.

    Unlike my “real job”, I don’t have an information or Sharpe ratio cooked up for my 3 or 4 years of Intrade/Tradesports trading.  But I do know, from talking to the frequent traders at TS, that most are not profitable.

  7. Pingback: Since the crowd is so wise, would one make money by betting systematically on the InTrade favorites (say, once they reach 50)? | Midas Oracle .ORG

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