Final US Election Portfolio

Final US Election Portfolio

Where on earth to start after the most incredible political event most of us can ever remember? I’ve just returned to the UK and will be writing more over the weekend but for this first piece, I’ll simply settle up the portfolio ahead of wider explanation and analysis.

Obviously, Trump becoming president was a catastrophe – easily my worst ever political betting outcome – although it could have been a lot worse. As advised on Twitter whilst the drama was unfolding, I managed to cover some of my losses, but by no means all.

All things added up, it amounted to a 358 unit loss on the published portfolio in Betfair’s Next President market.

Set against 87 units profit made on the Republican Nomination, 54 profit on the VP Nominee markets, plus various primary and state bets, the US Election cycle cost me 194 units.

It wipes out the 170 units profit made on Brexit and the 22 units from Jeremy Corbyn’s re-election. I’ve still made some small money from politics this year – from a couple of bets not listed in those portfolios (an early sell of Jeb Bush plus a Brexit spread bet) and the Tory leadership but I won’t pretend this isn’t a seriously disappointing result!

Particularly because I played the market unprofessionally, not taking the advice I’d given others about covers. Hedging my position either going into the final day or after the first results would have been easy. Back Trump at big odds to win Florida, Pennsylvania and Michigan at big odds in the knowledge that one from three would yield a profit, while all three would yield a big win and enable the sort of covers that I placed in-running on the main result.

I paid a price for getting greedy. I never thought Trump had a prayer and, on reflection, perhaps became obsessive about never wavering whilst other prediction models constantly hedged. Gambling, rather than trading.

A stupid exercise in vanity and lack of self-discipline. You don’t spend 15 years as a professional gambler (after ten as a semi-pro) without knowing these are fundamental mistakes. There are no certainties in betting and one should never leave massive risk open when the option to at least cheaply remove most of it exists.

England’s historic win in the 1994 Barbados Test Match was the last time I can recall beating myself up so badly. Nevertheless, I know how to take a hit and move forward. That won’t be a problem.


8 responses to “Final US Election Portfolio”

  1. Interesting what you write … I had the same experience over Corbyn’s first election. Just refused to believe it. Eventually hedged and reduced losses by 55% but still took a huge loss. What you say about getting greedy, refusing to contemplate I might be wrong etc are all actions I recognise in my own failure. But the experience is seared into my mind and has stood me in good stead since.

    To be human is to err, all we can do it to learn.

  2. I read your posts throughout. Never felt that you really had a handle of what was REALLY happening here in the USA, even though Brexit should have warned you about the way Americans and voters in general are feeling about The Elite and The Establishment. Nigel Farage had it right about The Brits, and Trump had it right about Americans. Many, especially voters in what Michael Moore described as the Brexit states, WI,MI,OH,PA—those in rust belt—felt abandoned, forgotten, angry, distressed. On Election day that all came home to roost.

    In July of 2015 when I saw Trump rising, I went to Bovada.com and placed a wager for $125 on Trump to win POTUS—the odds then were 33/1. I ended up winning $4,250.00. It’s good to be good, it’s better to lucky. Gracious in victory, Gracious in defeat.

  3. Hi Paul, thanks for the coverage over this election. What a surprise result it was, I made the mistake of overexposing myself – hard learnt lesson. As an inexperienced trader I am going to have to claw my way back somehow. Will you be posting analysis on any upcoming events?

  4. I was a HUGE winner on the outcome. I freely admit I was gambling, not trading – just a gut feeling I had early in the year that Trump had the formula to pulling this off.

    I read your articles this year and listened to many of your interviews. With respect, I think you may have let yourself get emotionally invested in having a reputation as a political pundit/predictor

  5. In your defense, it is hard for non-Americans to imagine just how biased (and nowadays despised and distrusted) the corrupt US mainstream media is. Many, if not most, of the criticisms they made of Trump were either taken so badly out of context as to be false or were outrageous lies, such as him mocking a disabled reporter for being disabled, his intending his comment about Megyn Kelly to refer to bodily fluids, or that he thinks all Mexicans are rapists. This observation doesn’t necessarily imply that he’s a saint himself.

    I remember dropping several hints in your comments section, hoping you might look into these discrepancies. In any event, I had a few sources inside the campaign and I made more money in an evening than I’d ever made in a month before.

  6. Hi Paul,

    I have just returned from an overseas trip and have read your last comment. A very honest appraisal of the situation regarding your review of your position. I have always maintained that Trump would win, I have won $40,000 and I would have put more on if only I would have had bigger kahoonas and was able to ignore the biased media…

    Chin up mate, we all take a flogging once in a while. Please stay in touch as as promised in our earlier emails, please look me up for a beer when you are in Melbourne next.

    Kind regards,

    Nick
    +61 (0) 403 877 206

  7. Haha, some funny comments above. Fair bit of after timing going on, but that’s often the way.

    I’m a political trading newbie but trade full time for a living. I found your information in the lead up and during brilliant and very often correct with the market reacting how you suggested often. Because of this you absolutely let yourself down by not finding hedge spots as there would have been many times the market moved heavily in your favour.

    Your honest assessment of becoming blinded and too attached to the position rings true to me, as all of my money was made while counting was in play. Although it always seems easier now, really the affect FL was having on the market as Trump came storming back to level up and then lead that state was very clear. I feel if you werent so adamant and a little more fluid you could have hedged up and gone back in again on Clinton or flipped book to Trump at different points.

    It’s also refreshing to know (for me, not for you haha) that these over exposure type simple mistakes can still hit even some of the most experienced traders. It’s refreshing to know as I shouldn’t beat myself up over it too much but I guess a little annoying that maybe once in a while it’s going to happen and it’s going to annoy me that it happened haha.

    Head up Paul, great insight all the way through, a little more liquid in your thoughts and this election could well have been huge for you. Best of luck in the future.

    Luke MacDonald
    @lukeamac

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