I've been having lots of fun playing around with RealClearPolitics'
play-money '08 market powered by Intrade. It's a chance to put your money where your mouth is. Though it's not quite real money, the prestige of showing up on the leaderboard should help drive some rational economic decisionmaking. I intend to play around with this pretty often as a gut check on where I stand analytically on '08.
Here's where my portfolio stands right now:
- Following Rudy's enormously successful MoveOn offensive, followed by his unconventional, statesmanlike London visit, I've bought a hefty chunk of Giuliani nomination stock. I have also bought some Giuliani-to-be-President shares under the assumption that his emergence from a close, contested primary will also improve the likelihood of the GOP nominee beating Hillary, amplifying the gain. We won't see this borne out until February though.
- I've also bought some Fred Thompson nomination shares under the theory that should Romney fade a bit, Fred is the most obvious beneficiary.
- Both of these are medium-term holdings as hopefully the top tier will start clarifying a bit in the fall. I'm looking for Rudy to break into the 40s and Thompson into the mid-30s relatively soon. At that point, I'll probably reallocate, though I will want to stay with what I consider to be the winning horse (the leaders have a tendency to go up the closer it gets to election time, the thinking being there's less and less time for stuff to go wrong).
- I bought and sold a small contingent of Romney nomination stock, for a loss. His national numbers are backtracking and it's starting to show in New Hampshire. How long till he takes on water in Iowa?
- My Giuliani-to-win-NH futures are doing quite well.
- I'm regretting my Romney-wins-Iowa not because I don't think he'll win, but that at 70%, they may be overpriced. If his national numbers sag, even with no change in his Iowa numbers, I'll expect the price to dip into the 50s. At that point I may consider buying.
- The Hillary-nomination futures likewise looked like a safe investment at 68, but they stink over the medium term so I've held off. Yes, she's like buying IBM. This contract will pay in the end. But what's the process for getting there? 68 is a high number that's unlikely to grow much until the actual voting starts. And I'd look for a (false) Obama boomlet to make this a bit more of a bargain. Bottom line: I'll buy Hillary when placing my final bets. Overall the GOP market is where there's money to be made.
- Finally, as an alternative to cash, I've shorted Gingrich-to-run and Gore-to-run contracts, which requires me to set aside the full-payout value of the contracts for a potential gain of 25% and 17% respectively. That's pretty good for a near-certainty, though I'm obviously out considerably if something radically unexpected occurs (this is probably the only thing I wouldn't have done with real money).
What's in
your portfolio?