California’s Dumb Election System Did It Again

It is corrupt and pathetic - but there is still opportunity.

Last night on Predictable, we went through the latest twists in California, looked back at some positions that have already paid off, and laid out several opportunities ahead of tonight’s primary coverage.

Election season rolls on, and tonight we’re back at it with another livestream as results come in from Maine, South Carolina, Nevada, North Dakota, and several other races. But before we get there, I wanted to go back through some of what happened last night and explain a few things.

First of all, what we’re seeing right now is weird. It’s not normal that California takes forever to count ballots. It shouldn’t be accepted and it shouldn’t be defended. California is an outlier not just in America, but in the world. Nobody should think it’s reasonable that races are still changing weeks after Election Day. But while you can’t fix California’s rules in real time, you can price them in. That’s what prediction markets allow you to do.

The Nithya Raman Position

If you watched the show before the election, you know I talked about Nithya Raman when she was trading around nine cents.

I went into that position expecting I might lose. That’s part of this. Value doesn’t mean certainty. It means the market is pricing something lower than you think it should.

My thought was pretty simple. A lot of Los Angeles voters would never vote for Spencer Pratt under any circumstances. They may not have loved Raman, but they weren’t going to vote Republican either. At nine cents, I thought there was value.

Turns out there was.

I talked to one viewer who bought around that same level and entered yesterday up more than 300%. I love hearing stories like that. Ironically, I sold my Raman position for a profit on election night because I thought Pratt had done enough to hold second place. I rolled those gains into Pratt No because I figured I had two ways to win. In hindsight, I would have made more money staying with Raman. That’s okay. I’m not going to sit here and pretend I hit everything. If I get something wrong, I’ll tell you. That’s part of the process.

Remove Emotion

One of the hardest things to do in prediction markets is separate your rooting interests from your investments. I wanted Spencer Pratt to win. I think Los Angeles is heading in the wrong direction, and I don’t think Nithya Raman would be an improvement. But that’s different from asking what is likely to happen.

Sometimes I actually prefer being in positions where I’m rooting against myself politically because it gives me confidence that I’m following the data instead of my emotions. If I’m going to suffer through bad political outcomes, I’d at least like to get paid for my pain.

The Platner Play

Another opportunity we discussed involved Graham Platner in Maine. The headlines surrounding him have been nonstop, but my argument was pretty straightforward. Janet Mills had already suspended her campaign. Roughly a third of the vote had already been cast before the latest accusations surfaced. And most importantly, I actually read the contract rules.

That’s always important.

The market only cares about who wins Tuesday’s primary. It doesn’t care what happens afterward. When I wrote about this opportunity last week at PredictableShow.com, Platner was trading around 95.5 cents.

That might not sound exciting, but a 4.7% return in a few days is a strong return if you can repeat it over and over again. I also took a smaller, more aggressive position on Platner winning by more than 50 points. That position has already moved significantly.

Maybe I should listen to myself more often.

Building Toward November

One thing I want to stress is that what we’ve done so far this election season is not normal. I can’t promise 1,000% winners every week. The Paxton margin market was incredible. Raman has worked out beautifully. But the goal isn’t to chase miracles every Tuesday.

The goal is to stack gains.

Five percent here. Eight percent there. A longshot that occasionally pops. Build the bankroll and be ready when November arrives. That’s what we’re trying to do.

Tonight’s Livestream

Tonight we’ll be live again as the results come in. We’ll go through Maine, South Carolina, and the other races, talk through positions in real time, and hopefully find some opportunities while the market is still moving.

So join us tonight on YouTube and at PredictableShow.com. Subscribe, turn on notifications, and come build this thing with us. We’re still early, and we’re just getting started.

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