Florida Just Gave Us a $16 Million Warning

I went 26–2 last night.

Twenty-eight prediction market positions across the primaries, 26 wins and two losses. And unlike last week, when Francesca Hong managed to take what should have been a very nice night and turn it into something I never want to discuss again, this one actually felt good at the end. We had three all-in positions, hit all three, found some really nice value in the secondary markets, and generally avoided doing anything catastrophically stupid. That’s pretty much the dream.

But the most interesting race of the night wasn’t one of the obvious ones. It was the Democratic Senate primary in Florida between Alexander Vindman and Angie Nixon. Vindman was the recognizable name, the establishment candidate, the guy who became famous during Trump’s first impeachment and then spent years as something of a celebrity on the left. Democrats wanted him in the race against Ashley Moody. They moved him into Florida and through a ton of money at him… more than $16 million. By contrast, Nixon didn’t even raise $1 million. She had almost no statewide profile and was running as a socialist in a state that has spent the last several years getting redder.

Then, somehow… she won.

There’s also a prediction market lesson in what happened, and this one cost me a little money before it made me money. Vindman came into the night as a huge favorite, but as the votes started coming in, his price collapsed. At around 15 cents, I looked at the outstanding vote, saw that the Panhandle hadn’t even closed yet, and thought there might be an opportunity. I wasn’t necessarily thinking that Vindman would come all the way back and win. I thought, however, there was a reasonable chance the race would tighten enough that his shares could move from 15 cents back toward 30, 40 or maybe 50, and I could take the profit.

So I bought a small position.

Then I kept watching the results. More information came in. Vindman kept falling, and eventually I reached the point where I couldn’t come up with a believable scenario in which he was going to recover. That’s a dangerous moment in prediction markets because you’ve already made the decision. You’ve done the analysis, bought the shares… it’s incredibly easy to start looking for reasons why the original position is still going to work, instead of asking the much more important question: If I had no money in this market right now, would I still make this trade?

My answer was a resounding no. So I sold the Vindman shares at a loss and went the other way.

And with that, we officially have the 18th Amendment to the Predictable Constitution:

Don’t fall in love with your own trades.

It’s something I need to remind myself of because I think there’s a natural tendency to become overly loyal to your own analysis. After you’ve done all this legwork and emotionally committed to the position, facts on the ground start moving against you and suddenly you’re negotiating with reality.

The market doesn’t care how much you liked the trade when you made it. When the information changes, you have to be willing to change with it.

The rest of the night went considerably more smoothly. I break it all down on the show tonight and take a look at how Fishback gave us another way to attack the same race. Instead of just asking whether he would win, we went into the vote-percentage markets. I also debuted a new segment today that I apparently needed in my life: Insta Sell.

This one came courtesy of the South Carolina Senate race and a very, very unfortunate Darlene Graham soundbite. In politics, you never know when that Howard Dean scream moment is going to sneak up and destroy a candidate. That’s exactly what happened to Graham when she was asked a seemingly simple foreign policy question. Her atrocious answer moved me into Insta Sell territory.

We’re now 76 days from the midterm elections, and early voting starts much sooner than that. If you’ve been watching all of this and thinking you want to get involved but don’t really know where to start, we’ve put together Predictable 101: Seven Steps to a Smarter Position. It’s a free guide that walks through the basics, from setting up an account and placing a position to understanding what you’re looking at in the markets and some of the things I think about before putting money down.

You can get it free at PredictableShow.com. There’s still plenty of time to learn this stuff before November, and there are four more primary dates left for us to practice on before the big one.

And hopefully, we can go another week without hearing from Francesca Hong.

Watch tonight’s show on YouTube here: