Where does the value lie in the Primary betting?

January 2, 2008

Why John Edwards and John McCain represent value bets


After looking at the polls I have decided that John McCain should be the Republican frontrunner. All the other Republican candidates have major flaws and I am beginning to get the feeling that people are starting to coalesce around McCain as a candidate who can unite the Republican party – and possibly even America as well. The only question that remains is whether McCain can do well enough in Iowa to give him a strong shot at New Hampshire, which is a must-win state for him. Although his mini-surge in the polls has raised the bar for him (with a finish in double digits ahead of Paul and Giuliani an absolute minimum) I believe that he can pull this off. My guess is that McCain’s chance of winning the nomination is at the very least 35%, while intrade.com has him at 23.1-23.6.

On the Democratic side I believe that John Edwards is a value bet. My reasoning is that a large proportion of Democrats distrust Hillary Clinton, or believe that ultimately she is too divisive. At the same time it is blindingly obvious that Barack Obama is too inexperienced, too immature and that he will be eaten alive by the Republicans. Despite doing the best to run his campaign in the ground he represents an effective ‘none of the above’ option, as well as the memory of a smart, charismatic Senator who was hawkish and managed to mix populism with a upbeat centrist message as late as 2004 (which helps him attract centrist voters). I believe that Edwards has at least a 1 in 3 shot at Iowa and that if he wins he can go toe to toe with either Obama or Clinton. My prediction is that he has at least a 20% chance of winning the nomination while Intrade has him at only 7.0-7.8.

Neither of these bets are ‘sure things’ (and indeed I guess that the probability of neither of those bets coming off is more than the 50% a probability tree would imply since Edwards might bleed some support from McCain in New Hampshire). However, if you believe in value betting they are very good bets. The only other bet that might be useful is putting some money down on Fred Thompson at 2.4-2.9 just in case he comes back from the dead.


One comment

  1. […] thepoliticaltipster put an intriguing blog post on Where does the value lie in the Primary betting?Here’s a quick excerpt […]

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