The Right Coast

November 03, 2004
Tradesports Revisited
By Gail Heriot

Tom, your statement that “[a]fter a panic brought on by the leaked exit polls, tradesports settled down and became a valuable guide for the night” is kinder than I would have been. I don’t usually find myself in the position of pooh-poohing markets, but tradesports didn’t exactly cover itself in glory yesterday. From about 11:00 a.m. to about 5:00 p.m., it showed Kerry as the 2 to 1 and sometimes nearly 3 to 1 favorite. If Dan Rather had been calling Kerry the 2 to 1 favorite all afternoon on CBS, we’d be calling him an idiot now. I therefore think it’s fair to say that at least from 11:00 a.m. to 5:00 p.m., the market in presidential politics was an ass and an idiot too; participants gave far too much credence to early exit poll results that were really no different from the early exit poll results back in 2000. They goofed. It may be that these markets are usually pretty accurate, but you sure can’t prove it by yesterday.