Walking
2.0 mph – 91
2.5 mph – 87
3.0 mph – 85
3.5 mph – 83
4.0 mph – 91
4.5 mph – 102
5.0 mph – 116
Running
5.0 mph – 116
6.0 mph – 121
7.0 mph – 119
8.0 mph – 123
9.0 mph – 121
It’s November 3rd, 2012, the Presidential election has almost come to a close, and the popular vote is at a tie, 50% Obama to 50% Romney, and I’ve made a decent (for me) financial bet on the election outcome.
How does it make sense to make a large bet on coin-flip odds? Because the electorate odds aren’t 50/50. They’re closer to 85% Obama to 15% Romney, and therein lies an opportunity to make money!
Eight weeks before the election, I calculated the true electorate odds were 75-85% Obama. I wrote an article explaining how to use a program to do this.
Now, 3 days before the Presidential election, the odds are even higher. The New York Time’s baseball-Moneyball-wonderboy-turned-political-junkie Nate Silver predicts that Obama’s odds are 84%. The Princeton Election Consortium, which has called every election nearly perfectly since 2004, estimates Obama’s odds at 98%. The ElectionProjection.com, one of the web’s most reputable prognostication, says Obama will win and is now competing with everyone else to call the margin. And it’s noteworthy that, across the world, odds makers from Vegas to London are putting Obama’s odds above 80-85%.
Now that horse is dead, let’s get into the sexier discussion of how to convert that knowledge into money. If the odds-makers are all settings the odds 80-90% in Obama’s favor, how can one make any extra money betting he will win?
Enter Intrade.com. This betting site lets users, instead of professionals, set the odds. When it comes to politics and betting, can people let their emotions run high and cloud their rationality? All the time. Despite nearly every professional stating 85-98+% odds, enough Romney supporters are betting against Obama on Intrade that Obama is a favorite by only 65%! Everywhere in the world, betting on Obama costs $85-90, but only at Intrade you can buy a bet on Obama for $65. It’s like shopping at a huge sale! It’s an awesome opportunity of a huge increase on your money with the SAME odds.
Let’s see the difference in how money increases on Intrade vs every other betting site in the world:
Intrade. Buying a $65 bet on Obama which increases to $100 if Obama wins ($100/$65) = 54% increase
Everywhere else in world. Buying a bet on Obama at $85 which increases to $100 if Obama wins ($100/$85) = 17% increase
Intrade allows you to make 217% more money (54%/17%) than all other betting sites for the exact same odds.
By making this bet, you have true odds of 85-90% of increasing your money 54% in 3 days and are buying at a huge discount to true odds. You can’t get that in the stock market or a casino.
Some risk remains. There is probably a less than 5-15% chance Romney could win, and if that happens, I’ll lose my entire bet. But I’ll take 85-90% odds of a 54% return on my money in 3 days any day of the week.
The bet has been made, now I can only sit back and let it play itself out.
* * *
November 5th, day before election: Odds have increased to 86%-98.5%. Payoff: 52% in a single day. Famed political predictor Larry Sabato calls Obama victory. While the WSJ frames it as one of the “tightest races in history,” I am unaware of a single professional prognostication who calls for a Romney victory. Poor guy. Everyone is competing only to predict Obama’s margin of victory. I would humbly offer that this is the difference between listening to the media reports, and reading the data yourself.
* * *
Arbitrage: After reading this article, my cousin, Troy Fielding, made an interesting inquiry. Is there a way to exploit different market spreads and make money no matter what happens? I researched it, and there is. Buy Obama on Intrade.com at $65 and buy Romney on Bet365.com at $28.6. If you add those together, you get $93.6. When either of them win, you’ll get $100, which means a guaranteed profit spread of 6.4% ($100-$93.6) regardless of who wins! Using large numbers, this could be thousands of dollars of guaranteed profit. This is also a strategy to make the same profit, with zero risk, by simply betting 8.5x more money. For example, bet $1,000 on Intrade for Obama (like outlined above), you’ll make $540. If you bet $8,450 at 6.4% using market arbitrage, you’d make $540, but without any risk of losing! It requires more capital, but it reduces the risk to literally 0%.
* * *
Election Date Update: I made $5475 on this bet.
Introduction
Imagine if you could run analysis of the odds of which Presidential candidate was likely to win like the pro’s. Without a pencil sharpener or even a calculator.
Thought Experiment…
First off, let’s understand how the election is won. It’s not won on popular vote, it’s won on the electorate college count. If you win a state, even by a hair, you get ALL of the states electorate college votes. Despite there being 50 states in the US, only 7-10 states determine the election. That’s because the other 40+ lean so far Republican or Democrat that their outcome is known well in advance. California will vote democrat, Texas will vote Republican.
So if there are only 10 states, couldn’t we see who’s ahead in those states and reasonably guess who’s likely to win? Yes, but let’s start on a more simple level.
Imagine the whole election hinged on one swing state, Nevada, and polling shows both the Republican candidate and Democratic candidate in a tie. What are the possible outcomes? It could go R or could go D. Easy. Two possibilities.
Now imagine there are two swing states. Possible outcomes: RR, RD, DR, DD. Not too hard. It’s like math problem from middle school.
Three swing states grows 8 possible outcomes. At then states, there are 1024 possible outcomes.
Figuring out all the outcomes gets a bit hairier when each state has a different value of electorate votes (Florida is 29, New Hampshire is 4), you’re trying to reach the finish line of 270 electorate votes and one candidate is already starting ahead of the other, and there is a different likelihood of your favorite candidate winning some of these swing states. Meh. That’s a mathematical story problem that sounds more fun to just take a -1 red check mark on your homework and skip.
The Solution…
Enter, Christian Anderson, a Harvard post-doc. I proposed a problem to him:
“There are 10 swing states left. I want to know how many different pathways Obama/Romney could win. Ideally, I’d like to be able to assign probabilities (ie, Michigan has an 85% of going to Obama, North Carolina has a 75% chance of going to Romney) to more accurately help determine each candidate’s probability of winning.”
He is a brilliant solver of mental problems. He made me a computer program that answers both questions. I’m making it publically available for politicos to download who want to figure out the chances of their own candidate winning while the computer does the heavy mental lifting.
Here’s how…
- Download the main program, R, which is math calculating freeware, available here from UC Berkley. Install the program.
- Right click this link and select Save Link As. Download the political calculator data file “2012ElectionAnalysis” (recommend saving to desktop to make it easy to find).
- Go to desktop, and double click “2012ElectionAnalysis”. It will load the program interface.
- Type: z and the program will show you the list of swing states and the current probabilities assigned to each (.50 probability each)
- Copy and paste: elect(c(Dem=221,Rep=191)) and the program will now show you the probability for the democrat, Obama, winning; and the probabilitiy for the Republican, Romney, winning assuming 50/50 odds for each swing state left.
Walah! You effortlessly calculated the statistical odds for the election, given each swing state has equal odds of going to Romney or Obama. Now you can see the math, it’s an interesting outcome, eh? But swing states aren’t equal…
If you are feeling curious and want to adjust the odds – say you think North Carolina is more likely to go to Romney, or New Hampshire and Michigan are more likely to go Obama, what would the odds be then?
Copy and paste: “>z<-edit(z) This will allow you to easily edit the data.
The far left column is the state, the next column is the number of electorate votes it carries. The far right column are the odds. .5 is 50/50 odds. .6 means 60/40 odds for Obama, .9 means 90/10 odds for Obama. .4 means 40/60 odds against Obama or said differently, 60/40 odds for Romney. .1 means 10/90 odds against Obama, or 90/10 odds for Romney.
Enter your predictions. Close the window. Re-run the elect formula, elect(c(Dem=221,Rep=191)), and now you can instantly see what the odds are of your candidate winning given your new assumptions.
You can find some good “odds” information at the New York Time’s 538 blog, on the right hand side, under State By State Probabilities.
My favorite is to see how the odds change from the original 50/50 for all swing states, to giving Obama Ohio, which he currently leads.
Conclusion
I’ve run this with a variety of different scenarios that I think are pro-Romney, neutral, and Pro-Obama to get a feel of the reasonable odds of either candidate winning. It’s quite illuminating and definitely not 50/50.
If you do this, private message me what you think the odds will be and what your assumptions where (copy and paste the values from z to me). We are also doing a small group beting on the election outcomes. If you’d like to play, let me know. 🙂
Special thanks for Christian for making this possible.
When I was 19 I found out I knew 3 wealthy millionaires. I learned something interesting about how the rich roll: Not one of them drove a car worth more than $7,000.
Vehicles are horrible places to put a lot of money.
The wealthy are smart with money.
THE OTHER END OF THE SPECTRUM:
I recently had a friend tell me about a guy at a party telling others about his gorgeous new Tundra truck.
My friend tried to tell him he was throwing his money away. He argued that “It fits my style and I can afford the monthly payments.”
Fair enough. Everyone has different values in life. I decided to run the numbers and see the full cost of style and his monthly payments (the email I wrote her):
I just did the true cost to own (clickable link) on that $50,000 Tundra. It’ll have a resale value of $19,500 in 5 years. Given that purchase price, he’ll lose $30,500 (in depreciation/taxes/fees/etc). If he has a good credit score and put 10% down (generous assumptions), he’ll lose approximately $7,200 in interest payment.
Total 5 year net worth loss: -$37,500
That’s an average loss of $7,500 a year (37500/5).
He’s actually having to earn $10,000 a year in wages to have $7500 after taxes just to cover just the loss in depreciation/interest (not repairs/gas/insurance). Said differently: $833 a month of his monthly wages go to pay for waste on his truck.
HOW DO YOU ROLL?
I took my rich friend’s advice to heart and got reasonably good at car bargain shopping and made a system out of it.
1. Start with Consumer Reports. Figure out which vehicles are most reliable, then pick one from that group. This drastically increases the odds of the car lasting twice as long as a less reliable vehicle. The best cars for reliability are Toyotas or Hondas, Consumer Reports studies show. There are other vehicles too. Consult their buyer’s guide. Study it and really learn what options are reliable bets. To get a good deal it’s helpful to be open to more than just one type of car.
2. Do the math on the “non-price” factors. This is possibly even more important. Smart shoppers focus on price and reliability. The next level is paying attention to depreciation and gas mileage. Most people aren’t aware depreciation is the greatest expense in owning a car.
Look at the deprecation for a Toyota Avalon, owned for 5 years.
|
Year of Car |
Depreciation Loss after 5 Years |
|
2011 |
17900 |
|
2009 |
11200 |
|
2005 |
6700 |
Compare that getting a car with much better gas mileage (ie, 50% better mileage — going from 20 to 30 miles per gallon):
|
Mileage |
Gas Cost/Yr |
5 Year Cost |
Savings |
|
20 |
1800 |
9000 |
|
|
30 |
1200 |
6000 |
3000 |
What these two tables mean is it’s important to pay attention to gas mileage and usually much more important to pay attention to depreciation. They’re significant expenses/savings that most people don’t think of — it’s not posted on the price on the car. It has to be researched and calculated. It’s worth the effort! It only takes 10 minutes of research and you can save thousands and thousands of dollars.
3. Buy older cars with low miles. A cars age should be mostly measured by how much it’s been used (ie, how many miles it has), but the vehicle blue books value the year it was built. A lot. An older car with the exact same number of miles can be more than 20% less expensive.
4. Expand your search. Craigslist, dealerships, autotrader.com, and even eBay.com. To find the older car model with super low miles I wanted, there wasn’t a single car in my state I could find that wasn’t selling at a premium. I finally got it on eBay and 4 years later, it still drives like a dream. I paid 11k (with shipping) instead of 18-19k for the newer year car with the same miles. I would have paid 8k (70%) more in the car price and $700 just in sales tax. A lot of savings!
5. If you shop online, increase your due diligence. The greater unknowns require more due diligence. Spend the $10 to pull a carfax report on the vehicle before bidding. If using eBay, only buy from someone with 100% feedback. Consider having a mechanic inspect if it’s a long ways away. Even then, you just have to be willing to accept the risk. If not, don’t play.
6. Stay focused on the full cost picture. If you have to drive to get it or have it shipped from somewhere, factor in transportation costs. Calculate sales tax. Figure out what it will cost to get the car here in your name. Figure in tires if it will need new tires soon, or a battery, or any other misc repairs. See the total price picture.
7. Take the car to a mechanic. For $50-$100, a mechanic can run a battery of tests. This includes a compression test which is a much better indicator of a vehicles “age” (based on how hard it was driven). They can also spot hidden damage, or covered damage — only a pro with 20 years might see the signs. Eliminating the lemons from the pool of choices is critical. It’s annoying to spend the money, but worth it. Avoid buying cars with anything but minor damage.
Lastly, a note on keeping your eye on the big numbers
Buying a new car to improve gas mileage 50% from 20 MPG to 30 MPG saves $3,000 over 5 years.
Buying an older car 6 years older may save $11,200 (depends on which car/year you buy). Saving that depreciation is the same as 18.6 years worth of gas savings!
Some well intentioned buyers purchase a newer car because it has “much better gas mileage.” While true, the depreciation will eat more than the gas savings – frequently much more (even for a new Prius depreciation is still much more than gas mileage savings).
I use the NADA “True Cost of Ownership” website to find depreciation.
To calculate average gas cost per year, take a calculator and punch in 12,000 divided by the gas mileage (MPG) times the current cost of a gallon of gas.
These are my favorite sources for political insight and projecting likely outcomes.
http://www.realclearpolitics.com/ This site has slowly become the mecca for data for many others’ analysis. It is considered the gold standard for poll averaging in Generic Congressional Vote, Presidential Job Approval Ratings, Senate Mapping, and House Mapping. It’s also a fairly balanced collection of news from liberal and conservative sources.
http://fivethirtyeight.blogs.nytimes.com/ – Blog written by a former baseball stat guru turned political junkie, this website has some of the sharpest, clearest analysis from a numbers-based angle. This is the only other site I check daily. Incredibly insightful analysis that is often just a little ahead of everyone else. If you like numbers, this is heaven.
http://www.centerforpolitics.org/crystalball/ This is the guy who writes the crystal ball reports that I’ve been getting for 6+ years. He’s ridiculous at calling election outcomes (regardless of which party wins- he has a long record of predicting). I highly recommend following his reports (free email subscription). His analysis is some of the cleanest in the nation for data-based predicting. It’s free. It’s like learning about political analysis not from a conservative or liberal- but someone hell bent on predicting the right outcome.
http://www.electionprojection.com/index.php The guy who writes this is a nobody – a guy on the internet who built his reputation just predicting what he thought would happen and being right. I found him back in 2004 when he started and found his analysis compelling (and it turned out, right). I pay for his “premium content” but it’s not necessary since the free version gives you all the same conclusions. He lets you decide what you want to pay him — it’s hard to argue against giving a guy like that an extra $1-$10 to hear his thought process. You can see his track record for 2004, (almost perfect), 2006, 2008.
http://cookpolitical.com/ – Charlie Cook is probably the best known US political prognostication. His report is considered the gold standard by which others are measured against.
A comment on Twitter
While the 2000’s were about websites, it’s my opinion that the 2010’s will be about Twitter. Instead of seeing one long post once a day or maybe once a week, twitter allows you to see the thoughts and data the smartest people in the field think is the most interesting, in real time. It’s an amazing education.
Recommended Twitter Feed:
https://twitter.com/#!/jaredfielding/politicos – My political twitter feed that includes everyone below and many more
https://twitter.com/fivethirtyeight – Nate Silver’s FiveThirtyEight feed. Gold.
https://twitter.com/LarrySabato – Crystal Ball’s author
https://twitter.com/POLITICO2012 –
https://twitter.com/pollster
* * *
That’s it. I don’t feel the need for a ton of sources. A couple accurate ones are enough for me.Final Comment About This Blog: The intent of these isn’t to discuss about how one party is better than another. It’s to see the political landscape clearly to predict the outcomes of elections before they happen. And not just predict who wins, but also the margins of victory. In 2008, I correctly called how 48 out of 50 states voted for the Presidential Election. I’m sometimes wrong, but even that’s good: I get to see my errors so the next time I’m more accurate. I treat it as a game, and it’s one I enjoy thoroughly.
That’s it. I don’t feel the need for a ton of sources. A couple accurate ones are enough for me.Final Comment About This Blog: The intent of these isn’t to discuss about how one party is better than another. It’s to see the political landscape clearly to predict the outcomes of elections before they happen. And not just predict who wins, but also the margins of victory. In 2008, I correctly called how 48 out of 50 states voted for the Presidential Election. I’m sometimes wrong, but even that’s good: I get to see my errors so the next time I’m more accurate. I treat it as a game, and it’s one I enjoy thoroughly.
Top jailbreak apps in order that I recommend installing them:
BiteSMS ($10) – One touch access to favorites from any screen or app. Also allows receiving and replying to SMS messages within an app without having to leave it. Probably my most used/favorite app.
IntelliScreen ($10) – Put about anything on your lockscreen – emails, text messages, blogs, calendar, weather, etc. Customize the information and the layout to include Twitter, Facebook, and your RSS feed. One of my favorite apps.MCleaner & iBlacklist: ($12) Filter calls or text messages (white and blacklists).
MyWi ($20) – Turn your phone into a Wi-Fi hotspot with the click of a button. Use judiciously since it’s “technically” prohibited by AT&T.
My3G – Tricks your phone into thinking it’s on a wi-fi network even when it’s on a 3g/4g cellular network which allows for FaceTime, higher quality youtube videos, and large downloads.
Winterboard (Cydia, free): Customize your iPhone with custom ringtones, wallpapers, sliders, etc
Tap To Unlock Sliders: Replaces traditional slider with a tap button. Activate inside of the Winterboard app.
SBSettings (Cydia, free): Swipe titlebar for instant access to settings from inside any app. Also hide unused apps, turn on numeric battery, show date on status bar and other options.
Snappy (Cydia, $2) – Takes pictures in a second.
iBlank: Blank spaces to put apps exactly where you want
MIM: Personalize your carrier
Activator: Reprogram different swipes, and buttons to launch custom applications. Access to the app is in Settings. This is a great, no-brainer app. How Apple has released 6 iPhones and not included this feature is beyond me. Given the iPhone’s limited number of buttons, there’s basically one quick-launch shortcut (double-tap home to launch the phone.app). Launching the other common apps can involve an amazing number of clicks and taps. This allows you to activate any app through a huge variety of shortcuts (ie, volume up/down, volume down/up, press-n-hold home, double press sleep button, swipe from bottom, swipe from bottom-left, etc etc). Some are more prone than others to get in the way of normal use, but it’s really convenient to quick launch apps. Free.
Imagine a new couch is purchased for $1,000 (not an amazing couch, just an ok one).
This is how a person normally looks at it:
$1,000 Couch
How else is there to look at it?
There’s the money that had to be earned in taxes just to have the $1,000 to spend (assuming a 25% tax bracket is $1,000/.75=$334 more)
Cost of $1,000 Couch
$1,000 Couch
$ 334 Extra money earned for fed taxes
Then there’s sale tax that goes with the $1,000 purchase (10% in WA).
Cost of $1,000 Couch
$1,000 Couch
$ 334 Extra money earned for fed taxes
$ 100 Sales tax
In total, the $1,000 couch actually cost $1434. That’s 43% more than the price tag you see! Everytime! Everything personally purchased comes with a tax makimg it 43% more expensive.
That’s not the half of it. How much is that couch worth? If you were forced to sell it used, 6 months to a year later, in great condition, it would be worth about less than half, usually 1/3 of what was paid for it. Meaning the $1,000 couch is worth $334. A loss of $665. (By the way, if you doubt it, try buying something used in the Nickel or Craigslist.)
The poor and middle class come from a perspective that they own a $1,000 couch. Instead, they have a $334 couch for which they spent $1434 (4x more money!).
That’s the same as a financial planner guarenteeing a 75% loss on all money invested with him — and the average person just keeps on spending/investing this same way each year.
I don’t advocate foresaking everything material and subsisting on rice and more rice (which one friend took as the point). The point is to ask yourself, how can I do better for myself so I have more money left over: to invest in a Roth, play, not have to work so I can spend extra time with my fam — anything other than lose it as such.
What I currently do (as of 12/25/11): Creatine monohydrate, 5g twice a day, once with whey protein and 200mg of ALA, and once with whey protein, creatine, dextose and 200mg of ALA. I take it for approximately 2-3 months on, and approximately 3-4 weeks off.
Results: Muscle strength has substantially increased (Bench 185×5 to 235×5, Pull-ups 25×5 to 60×5). Endurance has substantially increased (running from nothing to 16 miles in 7 weeks).
Downsides: None I’ve experienced. No water retention. When I cycled off, strength did not decrease.
Information
Instead of repeating all the great information out there about creatine, here’s a link to a simple article and great detailed article.
A simple article and a detailed article about using ALA to help with creatine uptake and a study from the NIH on ALA.
—
Jared Fielding
I’m a huge fan of exploring how we make decision and what informs our thinking. The videos below all relate to food and eating. Worth a watch if you think about food at all during the day.
A brilliant video that examines in a creative way, what happens when you take the same people, same food, with 30 seconds difference in times, and only change one thing. the size of their plate. Result: They’re +25% hungrier: http://www.youtube.com/watch?v=Xp5HqJef9YI. Very creative and fun experiment.
Education is essentially worthless: A subsequent study showing tons of education provided to highly intelligent people is meaningless when it comes to their actions. What did matter? The SYSTEM: http://www.youtube.com/watch?v=heFiA1lAhe4
Feed people and tell them it’s Taco Bell vs tell them it’s from a restaurant with “Garden” in the name — how far off are they at estimating how many calories are in the food? http://www.youtube.com/watch?v=u-cA2FKalKc This video is funny and involves a lot of swearing.
There’s a surprisingly small difference between walking and running in terms of calories burned. It’s really about distance more than how that distance is covered that’s most important (75% of the equation is distance, 25% is variance in speed). There’s more information and calculators here. That being said, you do get a 25% bump for running. But staying focused on the big picture of getting stuff done: I couldn’t imagine running 6 miles today after running 8 yesterday; but I had no problem just now walking it. Walking is easier to do emotionally/physically many days when running is not.
The chart below is for a 160lb person (speed vs calories per mile)
—
Jared Fielding
Wonder what it costs to leave a light on all night? How much money is bleeding out of your wallet?
I polled 12 college educated friends. The answers varied widely from $0.10-$5.00/night. The average was $1.17.It’s nice to be educated. The reality is surprising. It costs $.03 to leave a light on all night. Lacking data, best guessers are off by 300%, and most people are unknowingly exaggerating the real cost energy by 3900%. That’s a problem because it causes people to focus their time trying to save money when they’re really saving pennies instead of dollars.
Here is a very easy to use energy calculator for a variety of home appliances. In Benton County, WArates are $.0649 (plug into the calculator).
Interesting data that puts expenses in perspective. How much electricity does it cost to:
Leave a 60W light on all night? $0.03/night
Run a dryer, full load, on high? $0.19/load
Leave a 32” TV on all night? $0.14
–etc–
Bottom-line: electricity is cheap. Really cheap. Much cheaper than people think. It’s a human tendency to focus on expenses you can see, but ignore the “unseen” expenses. Things that people see (the hallway light left on at night while they’re lying in bed) “seem” expensive. For example, leave a light on every night for a year (and it’s unlikely a light will be left of 365 days in a row) will cost $11. However, most people don’t know what they pay each year for house insurance. A little shopping around on house insurance could save you $150, or $250 on car insurance. Another example of a killer unseen expense: Depreciation. Buy a new car and depreciation could be an average of -$2,400 a year for the first 5 years. Make that mistake and you might as well leave 20 lights on 24 hours a day for 18 years. My house barely has more than 20 60watt candecent lights!
Do a little research and make sure you are making data-based decisions. Over a long period of time it will make a huge financial difference.
Stepping up the electricity awareness another notch:
In some areas, power companies charge up to 4 times more for electricity at different times of the day. It’s called peak vs non-peak hours. For example, my friend Janalyne is moving to Las Vegas, Nevada. Vegas peak time (1pm-7pm) during summer is 4 times more expensive than non-peak times. (Source) This means you’re much less expensive to cool off the house at noonthan at 1pm or to dry all the clothes at 7:01pm
Benton County, WA doesn’t have peak rates. If you live in another county, to find the cost of electricity, simply call the utility company on your electric bill and ask, “What does electricity cost per kilowatt hours?” Also ask, “Is there a peak rate? If so, when are the dates/times peak rates are in effect?” You now know more real life data about electricity costs than 90% of the population – now you can make decisions on reality instead of an mis-leading sense. Easy.
Jared Fielding 