Market intelligenceMark Kleiman thinks that the Iowa elections market shows that Bush is even money at reelection. The Iowa market, however, is probably not as accurate as a typical market should be because of two reasons. The market trades shares in pennies, and volume is very low, so one can't exactly make much money playing this market. Also, there are only three markets open to the public: presidential vote share, Democratic primary winner, and a market on interest rates. The existence of a Democratic primary market without one for Republicans may have the effect of increasing the percentage of investors who are Democrats. Given that no real money is at stake, the investors may be more likely to make investments based on their preferences and not their analysis, and since there are more Democrats, this could tilt the numbers against Bush. A market with higher cost and volume might be more accurate. For example, tradesports.com has Bush shares at $64 for a $100 payout. The lowest the stock has been traded for the last 8 months (no available data before that) was $58. Since April, the stock has been holding constant at about the current amount of $64. |
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