Lion of the Blogosphere

Ted Cruz 2020

I was able to obtain 247 shares of Ted Cruz winning the Republican nomination for only one cent per share!

I don’t know why anyone would sell it to me for that price. Even if you think it’s a guaranteed* way to make a penny, you’d be tying up the money for nearly a year and you’d lose out on not getting any interest on it. A much safer way to make a small (but more than twice as large as 1%/year) amount of money on a large investment is to invest in a short-term-maturity bond ETF like NEAR, MINT, or ICSH.

*It’s definitely not guaranteed. Ted Cruz was second place in 2016 behind Trump. The House is currently holding impeachment proceedings against Trump. Even if that fails, someone Trump’s age statistically has more than a 1% chance of dying or having a major health problem before the Republican nominating convention.

* * *

UPDATE: I was informed by a commenter that I may misunderstand how Predict it treats “no” purchases. Allegedly, purchasing multiple “nos” don’t all reduce your account’s purchasing power because the system understands that only one “no” bet can be lost.

Written by Lion of the Blogosphere

October 25, 2019 at 12:47 PM

Posted in Politics

13 Responses

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  1. If you have a No contract on another candidate, hedging with a No on Cruz reduces your risk and you basically get paid when you purchase the contract as a result. That is your literal answer for why someone would buy a No at 99 cents (to offset your 1 cent yes) when they could earn the same or better in a savings account.

    Jonah Macpherson

    October 25, 2019 at 12:58 PM

    • I agree that if interest rates were 0 percent, then theoretically there’s an arbitrage opportunity by buying every No contract.

      But you can get 2.5% interest with an ETF.

      Lion of the Blogosphere

      October 25, 2019 at 1:25 PM

      • It’s not so much arbitrage as liquidity. If, say, you have Pence NO at 88 cents, that’s a $1 return 88 cents in approximately a year, or 13.6%. If you then buy Cruz NO at 99 cents, you pay nothing but instead get paid 1 cent because at least one of the two contracts will resolve as NO no matter what. So now you have the same potential for a $1 return but you also have 1 cent cash on hand that you can bet on a 50/50 tweet market (basically a gamble) with high return. Multiply this by hundreds of shares and it can be a convenient way to grab some cash quickly to make another bet.

        Purchasing an ETF reduces your cash on hand, to say nothing about the hassle of moving money in/out of your PredictIt account.

        FWIW I don’t think NO shares are all they are cracked up to be. The reduced or even negative risk they can generate is kind of neat at first but YES shares are more flexible and where the real money is at.

        Jokah Macpherson

        October 25, 2019 at 3:07 PM

  2. Request for advice:

    The Lion’s past college advice was very right. I tried to use a college coaching service for my wife’s younger brother (hence forward referred to as “the boy”). The boy didn’t really want to put in effort to follow the advice. However, before we canceled the service, we forced the boy to join National Honor Society.

    The only reason to join National Honor Society is to try to get into college. Since all the other kids in National Honor Society were trying to get into college, the boy started conforming to the peer pressure and trying to compete with his school mates for who could rack up the most hours volunteering. He also started joining other extracurricular college application padding activities, because that’s what the other kids were doing.

    This was all predicted by the article the Lion wrote about why students who get accepted to high ranking schools but go to lower ranking schools are at a higher risk for dropping out. I have no doubt that the positive peer pressure effect works way better on the boy that it works on most other students. It certainly seems the most effective way to get him to do anything.

    Right now our biggest problem is letters of recommendation. I’ll explain why. When I was 9 years old, I was reading at a college level. I read philosophy books at home. I hated going to school and being forced to read children’s books. I didn’t get along with teachers, but the one who hated me most was my 4th grade reading teacher.

    When I was an adult, my father had a foreign exchange student live in his house for a year. We anglicized Édouard’s name to Eddie. Eddie was born in France, and had lived there all his life. Eddie’s father was a medical doctor in a picturesque town near Paris.

    Eddie was well liked by most teachers and students at our local American high school. There was however, one subject which Eddie was in danger or failing. If you guessed that the subject was French, you guessed right. Eddie used to correct the teacher for mispronouncing words. The mutual animosity between them quickly grew, and made the other students in the class uncomfortable.

    This brings us back to the subject of the boy and letters of recommendation. The boy is extraordinarily gifted in one subject. Much like Neo from The Matrix could move like an agent, I’ve only seen one other person who gave the appearance of being as talented as the boy is in his best subject. That guy was the head of the department which taught that subject at my college.

    Last night I was a little surprised to learn how disruptive the boy is in the class that he has the highest average in. The teacher asked if there was any way we could make the boy just 3% more mature. Based on my experience, the answer is no.

    The good news is that there are two teachers who have absolutely nothing against the boy. Better yet, one of those teachers is in STEM, and the other in humanities. If I were giving advice to a mature adult I would explain how to lightly butter up those two teachers, thus obtaining future letters of recommendation.

    The bad news is that I’m not dealing with a mature adult. I’m dealing with my wife’s younger brother. I need advice on how to get the boy to raise his hand and answer some questions in those two classes, smile at the teacher, look the teacher in the eye, and call the teacher by name. How do I facilitate this? Please help.

    MoreSigmasThanYou

    October 25, 2019 at 3:06 PM

    • ” I need advice on how to get the boy to raise his hand and answer some questions in those two classes, smile at the teacher, look the teacher in the eye, and call the teacher by name. How do I facilitate this? Please help.”

      Good question. I guess peer pressure, and seeing the benefits of doing that.

      Lion of the Blogosphere

      October 25, 2019 at 4:00 PM

      • If that worked, he’d already be doing it. Seeing the benefits is maybe better. I’m thinking of offering a bribe. I’ve been stringing out the idea of buying him a laptop.

        MoreSigmasThanYou

        October 25, 2019 at 5:13 PM

  3. Looks like you benevolent-censored my request for advice due to oversharing personal information. Would you mind responding to my real e-mail address, not the one I use to post here?

    MoreSigmasThanYou

    October 25, 2019 at 3:14 PM

    • I did not censor it. You didn’t use any real names so I don’t see the problem.

      Lion of the Blogosphere

      October 25, 2019 at 4:02 PM

      • My bad. It was just a glitch in wordpress where I didn’t see it awaiting arbitration, and thought it was gone. Should have waited longer.

        MoreSigmasThanYou

        October 25, 2019 at 5:12 PM

  4. You’re not quite understanding how the system works. Predictit only charges you your maximum risk in the worst case scenario. If you already own No shares on another candidate, buying no shares on a new candidate can only make your maximum risk lower. I.e., buying no shares on cruz if you already have no shares on pence will actually result in a credit to your account.

    This is a pretty good way to make money from the generally overinflated yes prices on predictit (particularly for longshots). For example, if you buy no on every candidate in dem nom and president winner, you’ll get about $20-$40 in instant risk free profit because the yes prices add up to 1.16. There’s no issues with interest rates or whatever, because if you make money in every possible scenario, you don’t even have to wait to get paid (you will be instantly credited).

    Sic Drag

    October 25, 2019 at 3:34 PM

    • “If you already own No shares on another candidate, buying no shares on a new candidate can only make your maximum risk lower. I.e., buying no shares on cruz if you already have no shares on pence will actually result in a credit to your account.”

      Hmmm, I didn’t realize that. Maybe I should read the rules.

      Lion of the Blogosphere

      October 25, 2019 at 4:03 PM

  5. Ted Cruz was born in Canada. His success in 2016 was largely just his reluctance to pick a fight with Trump.

    Roger

    October 25, 2019 at 4:44 PM

    • You know, I never understood how Cruz could go through an entire Presidential campaign without it being pointed out that he was never qualified to be President. It’s mind boggling to me. My guess is the Democrats were just going to sit on it and if Cruz won the nomination, immediately file a lawsuit to have Cruz’s name removed from the ballot. But I don’t get why the Republicans never mentioned it.

      Mike Street Station

      October 27, 2019 at 1:00 PM


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