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Now that the primaries are essentially over, I think I can safely post my Intrade experience. I just made a long post on 2+2 that I'll copy here.

[...]I estimate my final primary election wager results at around +10K (on an initial 10K roll on Intrade and another 2K or so in Paul bets). On the one hand, this does represent a nice 250% or so yearly ROI. On the other, I actually thought I could do better.

[...]

Postmortem:

In addition to being very profitable, the first phase of this experiment has definitely taught me some valuable lessons. In fact, the reason I'm writing this post out is to gather my thoughts; although the market between now and November only contains a handful of good opportunities, I want to get some of the more useful information down on paper in order to remind myself of these concepts down the line.

These lessons didn't come cheap. Although, as I said, my yearly ROI is ridiculous, had I done everything right, I think I would have broken twice that. In fact, I missed out on a few hundred dollars last night solely because I didn't follow a very strong read that, in retrospect, is a signal of a wider issue. Rather than elaborate on it here, I'm gonna postpone that for a few paragraphs in order to bring you a more ordered listing of...

The Things I Did Wrong:

1)Did not come into this with a set plan

I was spectacularly right that this market is flawed, but less so in my approach to beating it. Initially, my strategy to beat the system was nothing more than "follow the polls". That, alone, was usually enough to make a solid profit, but it quickly backfired when Obama lost NH despite being ahead. FWIW, in retrospect, the polls were *right* - in my opinion, the missing factor was Hillary's tear ducts, which kicked in at a critical time and duly began the segmenting of the white working class/women voters too late to register. Nevertheless, it's not as if I followed proper bankroll management (or do now), so being down 25% of my total investment on Intrade (even if Paul mostly made up for that in actual $) less than a week after starting kinda sucked. There's no telling how much being unable to leverage that missing 25% cost me, but it's quite a bit.

What I should have done before starting this whole thing was to plan out a strategy based on a combination of bankroll management, the polls, demographic data, and laddering (that is, leveraging continual small profits into each other.) I did get there in the end, but it took me a while, and I don't pretend to be perfect. Regardless of whether I'm decent at this now or not, though, having some idea of what I was going to do for the first two weeks besides "well, Ron Paul is free money to short and I can show up the Internet by doing it, so let's start there" would have been nice.

2)Did not appreciate leveraging enough

Again, I came into this with the basic theory that 'hey, this market is incredibly dumb and so is Ron Paul, so combining the two of them = free money'. That theory was totally true. It was also quite useless in the long run, because Ron Paul didn't finally bottom out until February, while having money tied up in his plunge from 10 to 1 prevented me from using it on the nice MI -> SC -> FL -> etc. free money ladder that would have tripled what I got from him. (When I say "free money", I mean the "Obama isn't on the ballot in MI but is trading at 10. And who thinks he'll lose South Carolina, or that Hillary will lose Florida with no ads allowed?" completely and totally risk-free type of free money.)

Given the sheer amount of such things on Intrade, the only reason to go long on a contract is when it gives you more points than you will get from three or four steps of this type of thing, or, alternatively, when the volume on those steps just isn't there. For example, I was not particularly active in the post-Wisconsin state markets because, had I put in five digits into a given state, I could not have easily turned around and sold it if the polls went the other way. Overall, however, leveraging is by far the better play on a market like this, and I'm saddened that I didn't figure this out until mid-January.

3)Decided to put money on Intrade on 12/24

Had it gotten there before 1/4, maybe the 3K I'd have made off Iowa would have also been lost in NH...or maybe not.

Having said that, The Things I Did Do Right:

1)Laughed at the media

Goddamn, our media is full of milquetoast blather. Why can't all our news channels be International CNN?

I think Olbermann's co-host last night said it best when she described Clinton's campaign as "post-rational". After WI, everything I read in the papers, saw on TV or clicked on online could best be described as "post-rational". I mean, I certainly understand Hillary's motivations for pretending that pledged delegates didn't count, the "uncommitted" supers (read: Obama supporters looking for a way out of declaring it publicly) were actually uncommitted, and somebody somewhere was going to hand her the entire FL/MI delegations if she just spoke about it long enough, but to have this stuff actually repeated over and over as if it had a chance in hell of happening was beginning to depress me. (It hasn't even ended yet; somebody somewhere is already writing the "Hillary's crushing WV comeback proves something" headline.) Wright Part II was certainly a bad thing to hit...the presidential nominee. What, you bought into the idea that 200 out of 300 people were going to take the Democratic nomination away from a black guy who won the agreed-upon nominating process? Really? Next, you'll tell me that Hillary had a chance to win a state where 1/3 of the voters practically unanimously united against her and where she never broke 43%...

2)Listened to specific pollsters/statisticians over others

I'm not gonna lie and say I believed Zogby over SurveyUSA, but I did pay very close attention to everything poblano had to say. (If you don't know who he is, Google him.) Everything I did after 2/5 was either based on his work or fact checked through his website. For example, anyone (except Intraders, apparently) could see Obama would never lose NC, but it took somewhat more than that to get the margin in Indiana - which I never even bothered to predict because I had no clue - that close.

3)Went with base political instincts over 1) and 2)

Media: "John Edwards can play kingmaker through the convention ZOMG!"
Me: "How is a guy with a dying wife who is 0 for the first 25 states supposed to seriously campaign? And wouldn't his dropping
out *now* ensure a better deal for his support [OK, I'm obviously not perfect at this] than if he waits too long?"
Edwards dropped out the day after I matched someone's four digit bet against it.

Pollsters: "Wisconsin is a close race!"
Media: "Wisconsin is a close race!"
Intrade: *prices Clinton at 15 the day before*
Me: "Has Obama ever been within the margin of the margin of error in this thing?"
repeat x 11

Intrade: "Gore has a > 0% chance of being vice president!!!!"
Me: "no"

There's a lot more than that I'm forgetting, so let me cut that short and move to the comedy options:

4)Did not post a single thing on the Intrade forums

Oh god they're a goldmine to lurk on but posting is soooo tempting except it'd cost me money

5)Did post on 2+2 Politics forums

Thanks, guys. You made me 10K and counting, I guess.

6)Did at least short Ron Paul a little

and therefore win an argument on the Internet

7)Did basically prove my point

and therefore win an argument on the Internet


up next for this thread: the glorious dismantling of my hopes and dreams when Obama is revealed to have fathered two black children and Hillary comes back/historic and epic failure in the VP pick sweepstakes. tune in in 2 months!