Wednesday 29 April 2015

Can we make money if the polls are right?

There is a website which I peruse regularly called The folk there seem to make a nice turn on betting on all sorts of elections. A very insightful bunch they all are and I wish them well.

The challenge though is that going to a bookie to place a bet is not a fair game. The bookie can refuse large bets and indeed, refuse to take the bets. As such I think to make an decent money a lot of money has to be sunk into the game a long way ahead of time.

Where investment is unlimited is in the equity and and forex markets. Here you can invest what you like in split seconds and trade out seconds later too.

The recent polls point to a very hung Parliament. In fact, Election Forecast appears to have it that no Government will  be formed at all. The Tories on 280 and Labour on 260 mean the SNP can prevent any Government being formed.

My take on this is thus:

- The Pound will weaken 2-3% on this news as it emerges at the end of next week. The Pound has been rising the past month, so for once I can't see that Government instability it priced in. 

- Similarly the UK markets, up at all time highs when the chances are a very left wing socialist coalition will get into power or alternatively that no Government will be formed.

The markets tend to look at past performance and the UK has not had Government formation problems for some time. I am not suggesting there will be a crash, but a couple of hundred points off the FTSE and a small decline in the Pound throws up some interesting potential.

I am on a long dollar/ short pound ETF for starters. Just thinking about which sector will do the worst, likely energy utilities and banks I would imagine?

Anyone interested in following this strategy?


Blue Eyes said...

International removals firms are likely to do well!

Anonymous said...

I'm betting that Labour will get in, abolish austerity as they did with "boom and bust" and the construction industry will get some large orders.

The latest Pesto comment on the economy that construction had an unexplained "fall in the pace of economic output in construction" is a natural one for Labour to respond to / intervene on.

Or I could just be hoping my pension which relies on my ex-company fully funding it, will be able to do so in the next five years.

Demetrius said...

I put a bet on with the lady that I would be wrong about the election. This is a win win bet.

CityUnslicker said...

curse of the commentator - post this and take a position and the US economy tanks....ffs.

James Higham said...

The problem is that the polls are slanted to one party or the other. Fool's game betting on this one.

Budgie said...

Since the Greens will apparently "phase out fossil fuel based power generation and nuclear power" we better invest in chicken shit. At least with a few chickens you could have a meal and have the methane to cook it with. Or will chickens be banned too?

Steven_L said...

I think to make an decent money a lot of money has to be sunk into the game a long way ahead of time

I did advise taking William Hill's 5/6 on 26 or more SNP seats in your new year predictions. Didn't you listen to me (again)?

The Pound will weaken 2-3% on this news ...

You got suckered shorting sterling too early, when Mickey Mouse (or Telegraph churnalists) is saying sell the pound, buy dollars!

Don't you read my comments? I advised you to go short June UK gilt futures a week or so ago right at the top of their trading range. I'm 238 points up already and the election chaos hasn't even begun.

Steven_L said...

NY prediction and SNP to get 26 seats or more at 5/6 tip

Short June gilt futures tip

I'm even kicking arse on the snooker thanks to Mr Hawkins and Mr Bingham upsetting the betting markets.

I still think Madison Keys has a shout at Wimbledon at 25/1 too.

CityUnslicker said...

SL - I do listen to you btw!

Electro-Kevin said...

I wish I could up-tick some of these comments.

I think UKIP support is well underestimated. I'm astonished at how many people say they intend to vote for them.

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