Last night, I went 27-2.
Should’ve been one of my best election nights so far. On any other night it would’ve been. But not last night. Nope, instead, I got Hong’d.
I HELD MY HONG TOO LONG
Yes, we’re doing this.
Francesca Hong walked into election night at roughly 95% to win the Democratic nomination for governor in Wisconsin. Neither the prediction markets nor the polling were even remotely close. Poll after poll had her up by 20 points or more. David Crowley had literally dropped out of the race before getting back in.
But from the moment the votes started coming in, the markets immediately started to panic. And after that, a massive roller coaster ensued. Hong fell. Crowley surged. Hong came back. Crowley came back. At various points, these contracts were flying from the 20s into the 70s and back again. One subscriber in the Predictable community told us he made almost 1,700% trading Hong and Crowley through the madness.
Me? I bought Hong at an average of 77 cents.
And I rode that position all the way to zero.
I'M STILL ANNOYED
Getting a race wrong is going to happen. Prediction markets would be pretty easy if we could just be right every time.
What bothers me is that the market gave me opportunity after opportunity to limit the damage. Hong recovered into the 70s. I stayed in. She dropped again. Then recovered again. I stayed in.
Meanwhile, I was having a fantastic night almost everywhere else. Michelle Tafoya. Minnesota. Connecticut. South Carolina. Wisconsin. I went 27-2 across my election-night positions.
But I let one oversized position wipe out a huge chunk of the profit from everything else.
So on tonight’s show we’re going through exactly what happened in Wisconsin, including one of the more remarkable polling misses I’ve seen and a prediction market that basically went from a sure thing to a wild ride in just minutes.
Oh and one more thing: we’re amending the Constitution of Predictable.
AMENDMENT XVII: A SMALLER LOSS IS A WIN
Sometimes the smartest trade isn’t squeezing every last penny out of a position. Sometimes the facts change. Sometimes the market is telling you something. And sometimes the right move is admitting that your original thesis might be wrong, taking the smaller loss and living to fight another day.
Apparently, I needed Francesca Hong to teach me that.
On today’s Predictable w/Stu, I’ll show you every position I had on election night, what I got right, where I screwed up and just how crazy the Hong/Crowley market became.
We also calculated what would have happened if you had somehow traded every single major Hong/Crowley swing perfectly throughout the night.
Start with $100. End with roughly $2.5 million! All you needed to do was perfectly time 11 consecutive trades. If only it were that easy.
Watch today’s show above, or on YouTube here:
And join us at predictableshow.com!
Premium Member Livestream: Includes Q&A
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