tallsuk
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Post by tallsuk on Jan 2, 2022 17:28:58 GMT
I am new to P2P but I have been gambling a long time and I think the principals are very similar. Everything is about value, risk and reward that can be worked out in very similar ways. I have bet on many different things but my key area is politics and economics and I do quite well. Unlike the big markets, football, racing, golf etc I tend to find these markets can be quite soft as they are not quite big enough to attract the big boys who know exactly what they are doing.
I don’t know if anyone is interested, or if here is the right place, but every so often I find a market that I think can be classified as an investment opportunity. Importantly, they are often around important political events that many people here discuss and therefore might be interesting even for people who have no interest in gambling.
Currently the betting market thinks that there is only a 70% chance that Joe Biden will see out his first term. If he dies, then the market is void. I think this hugely undervalues the actual chances. To not finish his term he will have to either be impeached, resign or fall seriously ill.
Impeachment requires a two thirds majority in the Senate and therefore is almost impossible. Voluntary resignation from a career politician who has spent his who life wanting this job is unlikely and involuntary resignation would require the sort of scandal that a politician like him has been avoiding his whole career.
This means that the mostly likely reason he would not finish his term is illness. This is the biggest worry as he is 79. At that age, when working in an incredibly difficult job, the risk of serious and incapacitating illness must be well above average. However, as President of a country where the rich get the very best medical treatment in the world and who I suspect undergoes very regular medical examinations with no expense spared.
If you think the chances of him reaching 2025 still employed are greater than 75%, then this is a good bet. The biggest issue is that it will take 3 years for the pay off and the amount available is limited and if it goes wrong, you lose all your capital, but gambling winnings are tax free. So is a 43% return for tying up capital justify the risk? I am interested to hear what P2Pers think??
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adrianc
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Post by adrianc on Jan 2, 2022 17:49:44 GMT
Currently the betting market thinks that there is only a 70% chance that Joe Biden will see out his first term. If he dies, then the market is void. I think this hugely undervalues the actual chances. To not finish his term he will have to either be impeached, resign or fall seriously ill. ... This means that the mostly likely reason he would not finish his term is illness. This is the biggest worry as he is 79. At that age, when working in an incredibly difficult job, the risk of serious and incapacitating illness must be well above average. However, as President of a country where the rich get the very best medical treatment in the world and who I suspect undergoes very regular medical examinations with no expense spared. You're forgetting one factor. The market is not devoid of sentiment. Now think back a year - Trump's claims that Biden was too old (despite being only two years younger himself), was already suffering from dementia, etc etc - and how loyal the Trump fans are. Are they a demographic likely to bet? YES! The counter to that is that the UK market and the US market are not the same. But, of course, the internet means that somebody who thinks they've found a sure thing and wants the best odds can use either market.
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tallsuk
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Post by tallsuk on Jan 2, 2022 18:11:24 GMT
I think market sentiment explains the current price but it should not actually feature into the valuation. The fact that it does means that it is a far better value bet than I think it should be.
My guess is that doctors and actuaries are the people who would know about the detail in this sort of thing.
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iRobot
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Post by iRobot on Jan 2, 2022 21:35:33 GMT
<snip> So is a 43% return for tying up capital justify the risk? I am interested to hear what P2Pers think?? I think the OP pretty well outlines how P2P'ers should approach Development loans - the downside risk of 100% capital loss is absolutely clear and the upside rewards will only be realised if a series of well-defined outcomes are positively aligned at a given point in the future. Thinking about it, this is on paper a much better proposition than a P2P Dev loan; with Dev loans you're likely to only get your upside: IF the Borrower is both competent and well intentioned andIF the Platform is both competent and well intentioned andIF the Development completes on time and on budget andIF the Housing / Commercial / Student Accom Market doesn't move against you -- that is an awful lot of IFs and whilst the P2P gambler investor might reasonably expect to be able to be assured of of these in at least in the majority of cases, time and again this has proven not to be the case in P2P-land. And the potential reward to the Dev-loan P2P-er? Maybe 6 or 7% pa at current rates? Even compounded at 7% that's only around 23% over the three years; and that's before tax (assuming that's clear profit and isn't being used to offset losses in other Dev loans). I'm thinking 43% looks pretty tasty in comparison if all it takes is for one not-ridiculously-old-and-extremely-well-taken-care-of chap to keep on breathing for another thousand days or so!
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Post by wiseclerk on Jan 2, 2022 22:11:54 GMT
@talluk
Well if you take that bet, then you might couple it with a bet that Joe Biden will win the presidential elections in 2024. Because if he is still in office there is a very high chance that he will get nominated by the Democrats to run for a second term. So it's just the question if he can win against the Republican candidate in 2024. The return for that bet is currently 499% on the market you used for the original example.
But nobody knows the future.
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Post by mfaxford on Jan 3, 2022 11:15:27 GMT
Impeachment requires a two thirds majority in the Senate and therefore is almost impossible. Voluntary resignation from a career politician who has spent his who life wanting this job is unlikely and involuntary resignation would require the sort of scandal that a politician like him has been avoiding his whole career. I wonder if there might also be a case for a tactical resignation. If he's not going to go for a second term and If Kamala Harris is going to be the 2024 Presidential candidate then I wonder if there might be a tactical advantage in Biden stepping back so that she goes into the elections as a sitting President. (obviously I don't know if that might also be a disadvantage - Would that limit her to a single full term, what happens about appointing a replacement VP etc.)
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adrianc
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Post by adrianc on Jan 3, 2022 11:25:40 GMT
... If Kamala Harris is going to be the 2024 Presidential candidate then I wonder if there might be a tactical advantage in Biden stepping back so that she goes into the elections as a sitting President. (obviously I don't know if that might also be a disadvantage - Would that limit her to a single full term Not so long as she served <24mo of the term before the election. When LBJ took over from JFK, he chose not to nominate one until the next election. When Ford took over from Nixon, he waited a few weeks, then nominated one - who had to go through confirmation hearings before being appointed.
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tallsuk
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Post by tallsuk on Jan 3, 2022 12:59:30 GMT
iRobot I do think there are a lot of strong comparisons between development loans and this sort of bet and I call these bets investment grade. There are a very small number of variables and the returns are very good for the level of risk. wiseclerk When you start looking at the bigger picture, there are far more variables to consider. I do follow markets like the new president very carefully but I actually think the 500% return on Biden being reelected is actually only fair and even a little low. We dont know if Biden wants to run, then the part bigwigs have to back him and then the electorate have to back him. On top of this there are also lots of unknown events that could happen between now and then that could change everything. For the intial bet to win, all he really has to do is stay healthy. Dont get me wrong, I love betting on these markets and I am happy to discuss them in far greater detail but I consider these to be far more traditional gambling and not investments. mfaxford Things like tactical resignations are really important in UK politics and are a huge consideration in next PM markets but it is not the same in the US. VPs are choosen for the voter base and is is not uncommon for the president and VP not to get along that well. Biden and Harrris are a great example, rich old white man and a young woman of colour appeal to differnt groups. Nixon was the only one who resigned and he went because he was going to be sacked.
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Mike
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Post by Mike on Jan 3, 2022 18:53:03 GMT
I think market sentiment explains the current price but it should not actually feature into the valuation. The fact that it does means that it is a far better value bet than I think it should be. My guess is that doctors and actuaries are the people who would know about the detail in this sort of thing. In general, the market dictates the price rather than any expert on a given event. There are a few exceptions, but you're usually not betting against the bookmakers expertise but rather against others staking bets in (often indirectly) opposite directions. The bookie adjusts odds to keep themselves unexposed to the actual outcome, and mostly make money from spread. So the odds (market-dictated value) need not represent reality at all, just as in any financial market (GME being an extreme example)
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Greenwood2
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Post by Greenwood2 on Jan 3, 2022 20:31:04 GMT
I am new to P2P but I have been gambling a long time and I think the principals are very similar. Everything is about value, risk and reward that can be worked out in very similar ways. I have bet on many different things but my key area is politics and economics and I do quite well. Unlike the big markets, football, racing, golf etc I tend to find these markets can be quite soft as they are not quite big enough to attract the big boys who know exactly what they are doing. I don’t know if anyone is interested, or if here is the right place, but every so often I find a market that I think can be classified as an investment opportunity. Importantly, they are often around important political events that many people here discuss and therefore might be interesting even for people who have no interest in gambling. Currently the betting market thinks that there is only a 70% chance that Joe Biden will see out his first term. If he dies, then the market is void. I think this hugely undervalues the actual chances. To not finish his term he will have to either be impeached, resign or fall seriously ill. Impeachment requires a two thirds majority in the Senate and therefore is almost impossible. Voluntary resignation from a career politician who has spent his who life wanting this job is unlikely and involuntary resignation would require the sort of scandal that a politician like him has been avoiding his whole career. This means that the mostly likely reason he would not finish his term is illness. This is the biggest worry as he is 79. At that age, when working in an incredibly difficult job, the risk of serious and incapacitating illness must be well above average. However, as President of a country where the rich get the very best medical treatment in the world and who I suspect undergoes very regular medical examinations with no expense spared. If you think the chances of him reaching 2025 still employed are greater than 75%, then this is a good bet. The biggest issue is that it will take 3 years for the pay off and the amount available is limited and if it goes wrong, you lose all your capital, but gambling winnings are tax free. So is a 43% return for tying up capital justify the risk? I am interested to hear what P2Pers think?? After the election there seemed to be some thoughts that the black female vice president was the preferred candidate, but unelectable. So Biden would be president for a while and then resign in her favour, I never went with this but see the possibility, and maybe the continual thing that Biden is mentally incompetent and needs to be replaced.
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adrianc
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Post by adrianc on Jan 4, 2022 8:28:57 GMT
...and maybe the continual thing that Biden is mentally incompetent... Compared to his predecessor...?
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Greenwood2
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Post by Greenwood2 on Jan 4, 2022 9:51:13 GMT
...and maybe the continual thing that Biden is mentally incompetent... Compared to his predecessor...? I would say Trump was/is nuts rather than mentally incompetent, although he did repeat himself a lot! Biden does seem a bit confused sometimes, but so do I these days. I also remember the trio of presidents referred to by some wit as: the one who couldn't tell the truth, the one that couldn't tell a lie, and the one that couldn't tell the difference. Nixon, Carter and Reagan?
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jo
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Post by jo on Jan 4, 2022 16:37:17 GMT
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tallsuk
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Post by tallsuk on Jan 4, 2022 20:56:18 GMT
I think market sentiment explains the current price but it should not actually feature into the valuation. The fact that it does means that it is a far better value bet than I think it should be. My guess is that doctors and actuaries are the people who would know about the detail in this sort of thing. In general, the market dictates the price rather than any expert on a given event. There are a few exceptions, but you're usually not betting against the bookmakers expertise but rather against others staking bets in (often indirectly) opposite directions. The bookie adjusts odds to keep themselves unexposed to the actual outcome, and mostly make money from spread. So the odds (market-dictated value) need not represent reality at all, just as in any financial market (GME being an extreme example) Sorry about that, I described it very badly and you are right. I meant the voter sentiment that may then influence market sentiment. I completely agree that the markets are frequently wrong, even if just for a short space of time and that is what value gamblers and investor look for. Voter sentiment is huge in political betting and I think it is the reason that markets are often mispriced.
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tallsuk
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Posts: 142
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Post by tallsuk on Jan 4, 2022 21:07:59 GMT
I am new to P2P but I have been gambling a long time and I think the principals are very similar. Everything is about value, risk and reward that can be worked out in very similar ways. I have bet on many different things but my key area is politics and economics and I do quite well. Unlike the big markets, football, racing, golf etc I tend to find these markets can be quite soft as they are not quite big enough to attract the big boys who know exactly what they are doing. I don’t know if anyone is interested, or if here is the right place, but every so often I find a market that I think can be classified as an investment opportunity. Importantly, they are often around important political events that many people here discuss and therefore might be interesting even for people who have no interest in gambling. Currently the betting market thinks that there is only a 70% chance that Joe Biden will see out his first term. If he dies, then the market is void. I think this hugely undervalues the actual chances. To not finish his term he will have to either be impeached, resign or fall seriously ill. Impeachment requires a two thirds majority in the Senate and therefore is almost impossible. Voluntary resignation from a career politician who has spent his who life wanting this job is unlikely and involuntary resignation would require the sort of scandal that a politician like him has been avoiding his whole career. This means that the mostly likely reason he would not finish his term is illness. This is the biggest worry as he is 79. At that age, when working in an incredibly difficult job, the risk of serious and incapacitating illness must be well above average. However, as President of a country where the rich get the very best medical treatment in the world and who I suspect undergoes very regular medical examinations with no expense spared. If you think the chances of him reaching 2025 still employed are greater than 75%, then this is a good bet. The biggest issue is that it will take 3 years for the pay off and the amount available is limited and if it goes wrong, you lose all your capital, but gambling winnings are tax free. So is a 43% return for tying up capital justify the risk? I am interested to hear what P2Pers think?? After the election there seemed to be some thoughts that the black female vice president was the preferred candidate, but unelectable. So Biden would be president for a while and then resign in her favour, I never went with this but see the possibility, and maybe the continual thing that Biden is mentally incompetent and needs to be replaced. I cant remeber exactly but was it not the situation that after the first few deocratic primaries the three mainstream candidates were not doing wonderfully and Bernie Saunders was considered to be a credible threat. Harris and Buttigieg dropped out to support Biden and it was thought deals were done at that stage. Trump goes after opponents by finding a weak spot and then going on about it constantly. With Biden it was 'Sleepy Joe' saying he is to old and is not mentally fit enough to be a president. He is still going an about it.
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