Monday, January 05, 2009

Buy!/Sell! #5: 2008 Annual Report

Happy 2009! This January will bring you a number of really ugly annual reports. I suggest that you don't read them.

However, here's a fun one: the annual report on my Buy!/Sell! model portfolios to date.
The idea is to see which of my prediction-market bets were right, or at least more likely to be right now than when I made them (=in the money in derivatives-speak) or not (=underwater).

As I mentioned at the outset of this project, prediction markets are thin (=not many transactions) yet, so most of my bets couldn't be made or priced on an actual prediction market. The only thing they were focused on this year was the Presidential election. Thus, my bets were "model" bets, the same riskless cheat used by hedge funds, economists, investment advisors and analysts to show how smart they are without actually putting their money where their mouths are. So, I'll also steal another cheat from the financial industry. I'll plead helplessness on marking these bets to market. No market means no market price, means no marking-to-market to quantify the Dollar gains/losses.

All the same, I can at least compare the predictions I made to the events which actually transpired to see if someone woulda made or lost money on my model portfolios.

So here goes:

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