Editor’s Note: Since November 2018, Joe has been publishing picks here and back at All Things NIT, our former site. Overall, the results have been mixed, with an average return on investment, per pick, of –2% when weighting by confidence (1 for low, 2 for medium, 3 for high) across 7,555 published picks, not including pending futures; and an average return on investment, per pick, of +2% across 2,268 completed high and medium-confidence picks. The low confidence picks are the problem. Most of our picks are in the low confidence category.
Use these picks at your own risk. Only you are responsible for any money you lose, and you should not bet more than you can afford to lose. If you’re afraid you might have a gambling problem, seek help.
Odds for these come from the better option between Bovada and BetOnline. We used to use the Vegas Consensus, but it’s no longer consistently available in an accurate form online. We rely heavily on FanGraphs for all our MLB action. We rely heavily on Nate Silver’s presidential election model for our election futures.
Active markets today: MLB moneylines, MLB futures, and our first election bets of the 2024 cycle.
Single-day MLB bets: Last year, we finished the season up about 8%, betting strictly moneylines. We’ve tried a similar approach this year. We’re 83–74 so far, down 6.14 units. It seems we did not, in fact, find something that worked. We keep trying, though. And we’re up 2.32 units this week so far.
MLB futures: We have a great history with these, though the last two years we’ve only made small profits. In both 2019 and 2021, I believe we recorded better than a 50% ROI. In 2020, we lost about 25% of our portfolio. We began this season with 750 units in our portfolio, with the intent being to spend 500 of those over the regular season and keep 250 in reserve for the postseason and/or hedging & arbitrage opportunities. We place two medium-confidence bets most weekdays until sometime in September when the scenarios become more specific.
Election futures: These have been our best market historically, with a 17% overall ROI and significant profits both times we’ve done them—in 2020 and 2022. We’re putting 1,000 units into our portfolio this year, but we’ll be betting it as a series of mini-portfolios, each leveraged against itself. 20 times between now and Election Day, we’ll bet 50 units on a batch of futures. Today marks the first batch. The second is tentatively scheduled for Saturday.
Texas @ Baltimore
Jon Gray’s got great numbers, but his exit velocities, xERA, and xFIP all indicate he should be giving up more home runs. What do the Orioles do more than anyone? Hit home runs.
Pick: Baltimore to win –188. Low confidence. (Gray and Burnes must start.)
NLCS
We’re doubling up on these guys again, for the same reason as usual: There’s positive value available at these odds and the team is currently an unprofitable scenario for us in this market.
Pick: Philadelphia to win +290. Medium confidence. x2
2024 United States Presidential Election
Nate Silver launched his election model yesterday, and we love that thing. It’s made us a lot of money over the years. On that topic: These bets are not about what we want to happen or how we’ll be voting. They’re about maximizing value while minimizing risk. They are as objective as we can be.
The way we’re handling this portfolio, as I mentioned above, is as a series of miniature portfolios. Mostly. We’ll be keeping an eye on previous batches of bets, trying to diversify and cover gaps and all those other good things. But for the most part, each set of 50 units will be leveraged against itself. The beautiful thing about election markets is that they’re so inefficient that beyond the outright arbitrage they offer, you can also put yourself in places where you’re fine if either party dramatically outperforms the polls.
We’ll explain the bets piece by piece below, but at a high level, our 50 units spread across eight bets today shake out as follows:
- Their collective eROI is 15%. This is a little lower than we’d hoped—we want about a 30% return on the portfolio as a whole—but…
- If all bets go to the current favorite in Silver’s model, the return on these 50 units would be 15.44 units, or 31%. Our modal outcome is a 31% profit. Our mean outcome is a 15% profit. I haven’t figured out the median, and I’m not sure I can in the absence of an obscene quantity of data from Silver’s outputs, but my impression is that it’s closer to the 31% number.
- Despite this skew, we aren’t exposed to much downside. In the event the Republicans win huge, we’ll make an 8% profit on these 50 units. In the event the Democrats win huge, we’ll make a 31% profit. Our only exposure here is scenarios where the Democrats win medium. In the worst of those scenarios, we lose 53% on these units. This is an area where we’ll seek to protect ourselves in future batches of bets.
For the bets themselves…
We start with the high level. We’re only putting two units on it, because we can get better value on strongly correlated things elsewhere, but we do think markets are undervaluing the GOP’s chances here. Interestingly, this price is the same as the best price available on Donald Trump to win the presidential election. We choose the wider net because, well, it’s wider. Even if there is a 0.0001% chance of an official Republican candidate not named Donald Trump winning this election, that’s a little extra on top of Trump’s probability of winning.
Pick: Republican Candidate to win presidential election –150. Medium confidence.
Here’s something markets are vastly underrating. It’s for a good reason—the electoral college has favored Republicans the last two elections, and it favored them in at least two of the three before that, and it does still favor them—but it’s miscalibrated. Trump’s gains among Hispanic voters were real in 2020, and it’s likelier they stay than that they vanish. I also think he does better among Black voters than Mitt Romney did, but I’m not 100% positive about that, so I’m going to half-say it. Either way, this is a great price. Only two units, because it’s still less than 50% likely, but it’s close to 50%.
Pick: Donald Trump to win popular vote +250. Medium confidence.
Here’s another solid one, and another where we’re only putting two units down. The swing states—especially the Rust Belt swing states—are so correlated that the distribution of Trump’s possible outcomes makes it something like 2-in-3 likely that if Trump wins, he also clears 311.5 electoral votes.
Pick: Republican Candidate to win 312 or more electoral votes +155. Medium confidence.
These are the big two. High expected value, not so expensive as to be insignificant. These aren’t as good of value as the popular value bet, but they’re better than the other two, and while markets have Biden favored in Pennsylvania, Silver’s model does not. 22 combined units.
Pick: Republican Candidate to win Arizona –165. Medium confidence. x6
Pick: Republican Candidate to win Pennsylvania –110. Medium confidence. x5
So, that leaves us with 28 units down on good outcomes for Republicans. In a situation in which reality likely leans more towards the GOP than markets do, that’s a fine balance. What we want to do now is find opportunities to counterbalance it—situations where there’s value available on the Democrats, so that if Trump does underperform expectations, we’ll have a backstop.
It’s hard to find these, but it’s not impossible. Both Virginia and New Jersey are likelier to stay blue than red, and by a wider margin than markets currently appreciate. If they don’t, we’re fine—that’s a good scenario for these bets—but in the likeliest scenario, they do even if all those other bets hit. 20 combined units on this pair.
Pick: Democratic Candidate to win Virginia –390. Medium confidence. x5
Pick: Democratic Candidate to win New Jersey –850. Medium confidence. x5
For our last two units, we have to take this longshot. The value is great, and that’s coming to us from a model that I personally think—if I can have one qualm—slightly underrates the possibility of a health concern or legal concern derailing the 78-year-old convicted felon facing a litany of other charges. Markets are underestimating the uncertainty here. We’ll leave the door open to the Democratic nominee winning big, and we’ll look for opportunities Saturday to cover our backs in a medium-blue scenario.
Pick: Democratic Candidate to win 350 or more electoral votes +2000. Medium confidence.
