EMERGENCY INVESTORS CALL: Bernie is on a Rampage and I’m Getting Scalped
Animals,
First, here is a video I made to summarize where we are in Bernie Sanders’ absolute rampage through the polls since Thanksgiving. It is brought to you by Terminator 2: Judgement Day, which we can all agree is one of the top 10 films ever made.
[wpvideo wXQN3k1E]
Bernie Sanders has finally caught-up with Joe Biden for frontrunner status.
The Fake News Media (FNM) has totally fallen for Bernie as the flavor-of-the-month and his polling numbers and PredictIt prices have been shooting-up more than Keith Richards in the ’70s. I have been telling you for the weeks that this would be the trend and that the best thing to do is bet on a reversal — to take short positions on Bernie and wait for the next big event on the campaign — to push your bets into the black. This might happen if Bernie blows an early primary, muffs a debate, or one of Elizabeth Warren’s fake news stories about him catches on. So far this has not happened, which is why my portfolio is getting absolutely nuked while Bernie climbs higher and higher. He has been notching first-place polls in Iowa, New Hampshire, California, Nevada, and New Hampshire. To get an idea about what this has done to prices, I am going to cut and paste a table from The Political Alert Engine, which all of you should bookmark.
For me this is a decision point. As I said in my past posts, I have opened short positions in IA, NH, SC, AR, TX, IL and CA against Bernie. Needless to say, all of these bets are throwing off serious cash right now. It has been absolutely brutal and my bank account is getting it worse than my liver does after watching hockey fights with a case of Bush Light.
So the question is– do I: (1) take advantage of even cheaper NOs, and double down; (2) sell and cut my losses; or (3) Hold.
To make that call, I made the below spreadsheet that can tell me how hot Bernie really is. I pulled all the 2020 polls on FiveThirtyEight for a few key states and checked which ones Bernie is actually winning versus which ones have him within the margin of error of the 2nd and/or 3rd place Dem. Basically, this would help identify if Bernie’s lead is for real or if the Fake News Media is just polishing his knob. I color coded the table from the perspective of someone shorting Bernie so….
Green = Polls where Bernie is losing outright
Yellow = Polls where Bernie is #1, but #2 is within the margin for error
Red = Polls where Bernie is #1 and outside the margin for error
Here’s the doc:
[googleapps domain=”docs” dir=”spreadsheets/d/e/2PACX-1vSYjR3JrtX506rpDkE630yjsi3VwTWLMyJOeyg_Uj-6_YEx72tp-qVvOGuHDlWVsLrXvnu36DuJG2mq/pubhtml” query=”widget=true&headers=false” /]
As you can see, Bernie Sanders has led in 13 of the last 21 early state polls. But in 8 out of those 13 polls, the #2 candidate is within the margin of error. So if you are a real hardo, you’ll notice that Bernie only lead outright in 5 of the last 21 early states polls… and four of those are in one state: New Hampshire. This basically tells me that we don’t know jack about what’s going on. Now let me remind you of this:
Do you see something weird? Because these prices are so insane that they should be forced to live in a cave. Joe Biden and Bernie Sanders are basically running neck-and-neck in every state but New Hampshire and South Carolina, and yet Bernie’s prices are at least twice Biden’s. Clearly the press is polishing Bernie’s knob way more than he deserves. I will write another post about the politics of the Bernie question, but as far as the numbers go, I would have an easier time justifying buying tickets to a Skrillex show than buying Bernie shares at these valuations. With that info, I have increased and averaged down my NO bets on Bernie as well as made some YES bets on Joe Biden. My portfolio now looks like this:
[googleapps domain=”docs” dir=”spreadsheets/d/e/2PACX-1vQqN7s9jW1K3wO4o5AOMoNW0YDgNyfhq53vgnJya-FhWVOCkw6mBXr-eDHxBXTJuqXb_guCZ7Byl7B8/pubhtml” query=”widget=true&headers=false” /]
And feels like this, at least for now:
TRUTH–
I am betting a serious amount of money that Bernie doesn’t dominate the Dem primary the way that some psychos think he will. Doing this is risky and 100 percent a test of your testicular fortitude. The best time to buy is when the market is totally against you. But for reasons I will describe later, I just don’t think that the politics support Bernie Sanders dominating these primaries the way that the price action on PredictIt does. I am pretty sure I will lose some of these bets but I think I can win enough to come out on top, especially since pricing is so out of whack and the rewards for Bernie shorts are nearing 2X. We’ll see if I am right. But we definitely won’t see if I am wrong, because then I will have to cancel this blog, hock my computer, and go back to selling bootleg cigarettes with my cousin Josh in San Bernardino to pay off my bookie.
gl.
KEEDNAWG.
I agree Bernie’s shares are ridiculously overvalued. That being said, he has a 1/3 chance if winning Iowa, which is a bit higher than Trump’s chances of winning were in 2016 (1/4). I’ve got bets against Bernie, but not more money than I can afford to lose.
In addition, I have bets against Biden in some states as a hedge against a Bernie victory in Iowa and New Hampshire. I’m really only screwed if Sanders wins IA and NH, but Biden wins SC. There should be knock-on effects where a candidate’s early victories increase chances of winning in subsequent states.
It all feels like it’s spinning out of control. Nobody knows anything!
Very good column.
I find it impossible to believe that Bernie can win the nom.
I am short him also, and down, now, and debating what to do.
They can knock on all the doors in Iowa, but, people still use their impressions of the candidates as to how to vote.
Bernie is awful. He IS a marxist…..he’s a relic from a past age of Bolshevism
Butt is ridiculous.
Warren is a liar and a con woman.
Biden is corrupt, and not very bright, but, probably the nominee.
Klobuchar is the best they have, but she should serve as VP under Biden, first.
Many pundits have recognized Klobuchar as the best.
The impeachment has thrown the spitfire off of Iowa.
Spotlite, not spitfire, sheesh, autospell.
Dan, I am feeling like you are not a likely Democratic voter! We’ll see how this one goes…
I think you are on the wrong side of this and are going to get whacked. There’s no catalyst for Bernie shares to go lower in the ST unless he loses Iowa – and he has the best organisation in Iowa.
Going to post about this in a little bit. You’re right — it’s a much more binary game now. No longer a time to trade for marginal game.