Bankroll Management

One of the most important things about investing, gambling, or playing poker is proper bankroll management, it can often make the difference between success and failure.

What is your bankroll? It is the amount of margin (money) that you currently have in your account. This is the amount of margin that you have personally set aside to invest on Intrade. And managing it correctly is the key to success.

For example, recently I made a prediction about Swine Flu and I was wrong. But this loss did not bother me. Why? Because the amount that I wagered, was an amount that I was comfortable with losing. Now of course it is preferable to not lose any money at all, but we can't win every bet all the time. Everyone loses eventually. The best we can do is to try and make sure that the amount of our losses is less than the amount of our winnings.

The amount that you bet should depend on two things. The size of the bet in proportion to your entire bankroll and the confidence that you have when making the bet. I would recommend not betting more then 10% of your bankroll on any one contract. If you feel very confident about the bet you are making and want to bet more, then feel free to do so, but do so cautiously. If you want to bet everything on one contract, you better be damn sure you'll win.

The loss that I had on Swine Flu represents 1/4 of the amount that I wagered on Transformers. This is because I put a lot more thought and effort into my bet on Transformers then I did for Swine Flu. As a result I was a lot more confident and the winnings from Transformers are more then going to make up for the losses of my bet on Swine Flu. Overall, I am winning more then I am losing and I am happy.

Proper bankroll management will also allow you to make more wagers. If you win more often then you lose, then the more wagers the better. More wagers allow for less risk, more opportunities, less frustration and worry.

Losing can sometimes affect your judgement when making other bets and this is another reason why bankroll management is so important. One day you might make a bet that you didn't put the correct amount of time into. But if you use correct bankroll management then the loss itself will be manageable. You may lose some money, but you are still playing the game. Which is the most important part. Eventually you will find the contract where you are right and others are wrong. The point of bankroll management is to make sure that when that happens, you have the margin available to take advantage.

Transformers: Revenge of the Fallen

Transformers 2 is coming out at Midnight and it is going to be HUGE!

The theater count for this weekend will be 4,269 with 169 IMAX theaters which charge more. Transformers 2 has been trending high on Twitter all day and there have already been over 1,000 sold out performances and around half of those are for midnight tonight.

Reviews have not been stellar but I doubt that will have a big impact on a movie of this magnitude and because it is a sequel to a successful popular movie. People want action and that is exactly what they are going to get with thismovie. This movie will probably get $10 Million+ for the midnight showings alone. This doesn't necessarily mean that this movie will do really good on the Weekend once word of mouth spreads but it is certainly a good sign.

Currently, I have Contracts going Long on TRANSFORMERS.+$95.0M for 65, TRANSFORMERS.+$100.0M for 50, and TRANSFORMERS.+$110.0M for 33. I find the best thing to do betting on any movie is to spread the risk as much and as cheaply as possible. Right now, I think 110 Million is definately within sight for the weekend. But if it doesn't do as well as I hope I still have 100 Million and 95 Million to fall back on.

Right now, the biggest thing that scares me is that Word of Mouth will be terrible and it kills the weekend even though the movie has a very successful start. The run time of the movie is also not helpful to producing a big a box office at around 2.5 Hours, but that didn't stop The Dark Knight from the biggest opening weekend of all time.

The Data Feeds on the right will update as the week goes along and the one with the release date will keep a running total of it's entire Box Office Gross.

[Update:10:50 AM Wed]

Fandango: 2,000 midnight shows of TFRM2 sold out; 94% of ticket sales on Fandango
-- secretstalker, Jun 24, 9:54

No hard numbers yet, but it looks like we might be looking at 12-14 Million dollars for the midnight opening alone.

[Update: 2:20 PM Wed]

Transformers 2' Midnights Make $16 Mil

[Update: 1:44AM Thurs]

$55 Million for Opening Day! Analysis of this tomorrow.

[Update: 1:15PM Thurs]

$55 Million is apperently not good enough. $60.6 Million is the new Opening Day number.

To show how big that is let's show that compared to other big movies that opened on a Wedensday around the Summer.

Harry Potter and The Order of the Phoenix made
Wed: 44.2
Thurs: 18.3
Fri: 25.8
Sat: 28.9
Sun: 22.3
OW - 77.0 ; 5 Day Total - 139.7

Spider-Man 2 made
Wed: 40.4
Thurs: 28.8
Fri: 32.4
Sat: 33.7
Sun: 21.9
OW - 88.0 ; 5 Day Total -152.4

War of the Worlds made
Wed: 21.2
Thurs: 14.4
Fri: 21.9
Sat: 23.1
Sun: 19.7
OW - 64.7 ; 5-Day Total - 100.5

If we adjust them proportionately with Transformer's latest number for Wed, we get with

Harry Potter Adjustment
Wed: 60.6
Thurs: 25.1
Fri: 35.4
Sat: 39.6
Sun: 30.5
OW - 105.5 ; 5 Day Total - 191.2

Spider-Man 2 Adjustment
Wed: 60.6
Thurs: 43.2
Fri: 48.6
Sat: 50.6
Sun: 32.9
OW - 132.0 ; 5 Day Total -235.8

War of the Worlds Adjustment
Wed: 60.6
Thurs: 41.2
Fri: 62.6
Sat: 66.1
Sun: 56.3
OW - 185.0 ; 5-Day Total - 286.8

The War of the Worlds adjustment isn't very useful. I don't think anyone is expecting numbers like that. The market just isn't big enough to have those type of numbers. But the Spider-Man 2 and Harry Potter Adjustments show that $100 Million for the weekend looks good and seems secure. What isn't sure is whether or not Transformers can get a weekend with better multiplier than Harry Potter. Harry Potter had a lot of fans rush to the theaters that wanted to see it as soon as posible. The result being it is more front loaded.

Contrast that with Transformers and Spider-Man, which I think can appeal to a wider audience. I think we could be looking at a higher than $115 Million dollar weekend. Last night after seeing the $55 Million number for Opening day I acquired some more contracts at $105 Million going long. I'm pretty comfortable with what I have so far and for now I just want to see how this plays out.

[Update: 8:00AM Fri]

$28 Million for Thursday. As you can see, it is following the Harry Potter adjustment closer than the Spider-Man 2 adjustment. Nikki's estimate right now is probably a little conservative and we could be looking at a $30 Million+ Thursday when we get the actuals. $40 Million for Friday is definitely in play.

[Update: 3:00 AM Sat]

$35 Million for Sat, $115 Million seems out of play, I went short. $110 Million seems in Jeopardy, I sold what I had for a profit. Nikki's estimates can be a little conservative, so I'm not going to go crazy shorting it. Whomever, left those bids up is getting creamed.

[Update: 7:44 AM Sat]

I'm going to be busy today so no updates when the actuals come in. Nikki Finke is probably right but she has been off by a couple million in the past. So since I will be without internet access all day I got out of shorting $115 Million. If $35 Million is an accurate number for Friday, then this was probably a foolish decision, but I won't have access for most of the day and I can't risk it.

I'm still going long on $105 Million though.

[Update: 12:48 PM Sat]

I wasn't expecting to get the internet at my current location but Transformers is just to important haha. Box Office Mojo is saying a number a little higher than Nikki Finke's (Not Surprised). $36.7 Million for Fri is pretty good and now $105 looks pretty good. I'm seeing estimates all over the place. Ranging from $100 Million to $115 Million. No one seems to know what to expect and everyone is running around with there heads cut off. Comparing Transformers to Harry Potter, we look to be headed right for $110 Million. Right now, the prices on Intrade look spot on considering the information available. Transformers looks to make $200 Million in 5 days and the only movie that beats that 5-day record is The Dark Knight.

[Update: 2:42 AM Sunday EST]

Nikki is saying $39.5M for the moment. Her early estimates are almost an exact match with my Harry Potter adjustment. But it could be studio execs giving her numbers that are more conservative. We could probably see $40M-$41M Studio Estimate for Saturday tomorrow. Who knows?

36.7M + 40.5M = $77.2M

For $105 Million we only need $27.8M which seems more then possible considering Transformers has equaled or slightly outperformed the HP adjustment.

For $110 Million, we need $32.8M which is definitely possible on Sunday.

We are going to have to wait for Studio Estimates tomorrow, to know whether or not this is going over $110M. Under $115M does seem pretty safe but I don't think it's worth the risk to short a price of 6!

[Update: 12:06PM Sun]

Box Office Mojo is saying $112 Million for the weekend. Looks like I should have kept going long on $110 Million but oh well. Still a good Weekend for me overall.

[Update:4:30 PM Mon]

Well that was one hell of a weekend. I'm a little mad at myself for not shorting $110 Million when people were paying 95 for it but I'm glad that I wasn't going long on it either. Next week we have Public Enemies and Ice Age 3 so things should get interesting.

Intrade had over 4,000 Contracts traded this weekend and it was definitely their biggest weekend for the Box Office that I have seen. More then making up for the fact that only a single contract was traded for My Sister's Keeper.

Swine Flu

I have not been involved in the Swine Flu contracts in a while because I wasn't keeping up with all the updates, but I recently saw a forum post which got my attention and I decided to do a little analysis. Below is the post that user "Howard" wrote in the Intrade forums quoted for all of you. The part in quotations is another person's post that he is replying to.

"diseases tend to spread faster than linearly, which would indicate the next increase is going to be significantly greater than 3,600. b) Even if the increase only barely matched last week’s … total would still be more than 25,000."

Tend to spread faster than linearly? Really? Even after the spread has peaked? The last 4 Friday totals are: 8500, 13,217, 17,855, and 21,449. Those increases are: 4717, 4638, and 3594. The rate is SLOWING. If the trend continues, we will be adding approximately 3200 new cases by this Friday. The new AND FINAL total would thus be approx 24,650. Good luck buying those 73s!

I decided to take a look at the numbers myself and even though he was right about the last three Friday updates. He was incorrect about the amount of cases on May 29, which he says was 8,500 but was 8,975. You can check past official Swine Flu updates for yourself here.

Below is the date of every friday update and I have put the number of cases and the percentage it increased from the last friday update.

4/24/09 - 7 Cases
5/01/09 - 149 Cases - 1,914% Increase
5/08/09 - 1,639 Cases - 1,062% Increase
5/15/09 - 4,017 Cases - 145% Increase
5/22/09 - 6,552 Cases - 63.1% Increase
5/29/09 - 8,975 Cases - 36.98% Increase
6/05/09 - 13,217 Cases - 47.2% Increase
6/12/09 - 17,855 Cases - 35.09% Increase
6/19/09 - 21,449 Cases - 20.13% Increase
6/26/09 - 24,571 Cases - 14.5% Increase (Projection)

As you can see, the percentage increase has decreased quite steadily for every friday update except the 6/5/09 update. I figure that the best way to anticipate how the next update will go, will depend on how much the percentage increase, decreases or increases. For the last 5 updates, the percentage increase has gone down on average by 27.1%. That gives us an expected percentage increase of 14.5% for the last update before expiry and that puts the expected total number of cases at 24,571 with 3,122 new cases.

Because of that, I am giving the SWINE.FLU.US.JUN09.25000+ contract a Sell recommendation and I have Sold 10 Contracts at 76. The only reason I don't like selling this contract more is because we only need to see a higher then 16.55% increase in cases to see more then 25,000 cases and that would still make it the lowest percentage increase for a friday in the history of these Swine Flu Contracts. But as you can see the percentage increase has decreased almost every single time and I would rather bet with the trend then against it. For a price of 76 I think selling this contract is a good deal.

[Update] Box Office Returns - Weekend 6/19/09 - 6/21/09

You will find a couple of new data feeds in the side bar, a weekend chart, a daily chart, and release dates of the more anticipated movies this year.

For the Box Office Mojo - Weekend - Top 5 chart, which appears to update along with their website. Updates go like this. On Saturday around Noon EST, BOM has their Early Weekend Estimates. These numbers are pretty good and usually give you a good idea where exactly the movie is headed. You'll know for most of your contracts whether or not you have won or lost at this point. On Sunday around 1PM- 3PM EST we get Studio Weekend Estimates, and these are even more accurate and fine tuned. Because these changes can sometimes occur close to where some contracts have there strike points, some more contracts can be traded. Sometimes numbers can change more then expected and you might not know whether you have won or loss until Monday in the Afternoon, when we usually get the Weekend Actuals.

As of this writing Box Office Actuals are not in but I am hoping that it will automatically update in the Box Office Mojo Top 5 Chart in the sidebar. Doubtful that Intrade will expire Box Office Contracts today.

[Update: 5:12PM EST]

The Actuals are out and you can see them for yourself on the right. "Year One" opened great and then dropped like a rock, not even passing 20 Million which looked safe for a while. "The Proposal" is Sandra Bullock's biggest weekend, so I don't feel bad having underestimated it. I had a measly two contracts going long on "The Proposal" and I should have been a little more aggressive going long but the reviews were not as good as I thought they were and didn't feel that it had the potential to break $30 Million.

I lost my shorts on YEAR.ONE.+$17.5M but I had sold some contracts on YEAR.ONE.+$20.0M right before the weekend had started. On Saturday morning, it looked like I had lost those too but the Sunday Studio Estimates showed a big drop on Saturday and the estimate fell to $20.2 Million. I grabbed the 10 Contracts at 20 Million going long for 82 and hoped Sunday would have a bigger drop then the 20% they were anticipating. Sure enough it did and now my weekend got a lot better.

Apparently, word of mouth can really spread quickly among the young demographics thanks to technology and I think it killed the Opening Weekend for" Year One." Father's Day certainly didn't help. Not going over $20 Million was certainly a surprise for "Year One" considering it opened on Friday for $8.4 Million, the same as "The Hangover" which made $27 Million. It was never expected to have the same Saturday and Sunday but a $7 Million difference over 2 days is huge when two movies open for the same amount.

This weekend we have "Transformers 2" and I currently have contracts going long on TRANSFORMERS.+$100.0M for 50 and TRANSFORMERS.+$110.0M for 33. Transformers 2 is definitely going to be big, the only question is by how much? Will it break $100 Million for the weekend? I think so and maybe $110 Million for the Weekend, but I think that is more of a stretch. It opens on Tuesday Night at Midnight and we should know how big the weekend should be around by Thursday.

Saturday - Iran and Box Office

A bomb has gone off in Tehran according to the State Media there. This is BIG news if true. The whole situation will have changed instantly.

@cnnbrk Two people hurt in blast at mausoleum of Imam Khomeini in southern Tehran, Iran's state-run Press TV reports.28 minutes ago from CNN

[Update:10:00 Am]

I wouldn't doubt that this blast was planned by the government, but no doubt the government will use this to crack down on the protests. If so this might be a really smart move on the part of the Ayatollah. Completely unexpected.

[Update:10:55 AM]

Violent Clashes in today in Tehran. Here is a video of 5 minutes of heavy confrontation and lots of shooting. It seems to be new and have come from BBC Persia according to this tweet below.

@jimsciuttoABC: #iranelection BBC Persian video claiming to be of today clashes http://tinyurl.com/m4om8a

[Update: 11:12AM EST - 7:42PM Iran]

I think it's interesting that the supposed bomb site (no pictures or video yet) is right next to two Universities. I guess it's supposed to send an even clearer signal that this was done by Mousavi supporters.


View Larger Map

I find it very suspicious that there is no video of the bombing yet. I'm not sure I even believe it right now.

[Box Office - Update: 11:48AM]

The Proposal looks poised to beat $30 Million maybe $32.5 Million and and Year One looks like it is going to squeak by 20 Million.

[Update: 1:49PM EST]

Girl Dying on Camera (Warning: Extremely Graphic!) (Link Has been Updated)

People are going to get angry.

[Update: 4:00PM EST]

Appears the bomb was a complete hoax and the most they showed on the State Media was a broken window. I doubt anyone died or was injured. The State Media is very unreliable, they have even photoshopped the crowds supporting Ahmedinejad to make them look bigger.

It is now night in Tehran and the shouts and chants at night have gotten even louder. The situation seems to have escalated and the people are not giving up. The crowds are simply too big despite the heavy police presence. The good thing is the military does not seem to have gotten involved on the side of the State. The Ayatollah is only using what appears to be the police and Basjj Militia to put down the protests.

The videos coming out of Iran will not let these killings go unnoticed. Watching that Iranian girl die was one of the hardest things I have ever seen. The Iranian people continue to protest despite the killings. The situation is just getting a lot messier. Where this will go, I think nobody knows. Everyone should be proud of the Iranian people to standing up against Tyranny. Today will be a day for the history books that is for sure.

A Fork In The Road

We are now at the point of no return for Mousavi and his Green Revolution. Ayatollah Khamanei has declared an end to the street protests and says that the people have gotten what they want through the ballot box. Meanwhile, Mousavi appears to have been silenced and his spokesman at the Guardian has asked to have supporters go to the streets even though Mousavi will not be there to lead them.

Here is the transcript from the Ayotollah's speech today. I found some interesting quotes.

[02:13] (A. K.) I have known Rafsanjani for a long time
[02:13] (A. K.) he is one of the most prominent members of this revolution
[02:13] (A. K.) he was one of the major fighters before the revolution
[02:13] (A. K.) after the victory,
[02:13] (A. K.) he was one the most influential members of the Islamic state
[02:13] (A. K.) still is

[02:24] (A. K.) Today,
[02:24] (A. K.) If the laws are broken today,
[02:24] (A. K.) No election will be immune in the future
[02:25] (A. K.) in every election,
[02:25] (A. K.) there are losers and winners
[02:25] (A. K.) no other election will ever be trusted if you take other avenues.
[02:25] (A. K.) thus, all legal procedures should be observed
[02:25] (A. K.) If there are any doubts, the issue should be followed by legal procedures
[02:25] (A. K.) we have laws

[02:35] (A. K.) I want both sides to put an end to this
[02:36] (A. K.) then the responsibility of the consequences should be shouldered by those who aren’t putting an end to it.
[02:36] (A. K.) by thinking that by turning out onto the streets that you can pressure the officials your demands is wrong.
[02:37] (A. K.) first of all.
[02:37] (A. K.) it will not be acceptable to submit to illegal demands
[02:37] (A. K.) this would be the start of dictatorship.
[02:37] (A. K.) This is a miscalculation,
[02:38] (A. K.) If there are any consequences, they would directly affect the leaders behind the scene
[02:38] (A. K.) the people would know them in due time as well.
[02:38] (A. K.) I call on all these dear friends, brothers and sister to observe the law
[02:38] (A. K.) to follow the legal code
[02:38] (A. K.) the law welcomes you
[02:38] (A. K.) legal channels are there for you
[02:39] (A. K.) i hope that almighty god will help us all to follow the legal channels.
[02:39] (A. K.) don’t allow the enemies to destroy and ruin the celebration of our elections.
[02:39] (A. K.) If there are people who choose other paths, I will come and talk to people even more exclusively.

The Ayatollah is clearly stating that the protests will not affect the election result. He is putting his foot down on this and he is explicitly stating that the people in the street want to subvert the Iranian Constitution. This he will not allow.

But Mousavi and his backers are not standing down. Their spokesman has stated that the protest tomorrow is on. His supporters are spreading the word. From one Twitter account in Iran that appears to be the official Mousavi English Twitter account.

@mousavi1388 Please join Mousavi, Khatami and Karoubi Sat 4pm Enghelab Sq. to Azadi Sq. Tehran for a crucial green protest #IranElection RT

The text system was also back up and my guess is that the Ayatollah is trying to reach out to the protesters. He is trying to appear as democratic as possible while stealing the election for Ahmedinejad. Pretending to follow the laws and constitution of Iran while he lets Ahmedinejad manipulate the system anyway he can to retain power. But the spokesman for the Mousavi camp has made it clear that these protests will continue.

Some suggest the protests will fade because nobody is leading them. All those close to Mousavi have been arrested, and his contact with the outside world has been restricted. People rely on word of mouth, because their mobile phones and the internet have been closed down. That they continue to gather shows they want something more than an election. They want freedom, and if they are not granted it we will be faced with another revolution.

Mousavi is going to continue his protests Ghandi style and will not accept the current election outcome. This is seen by the opposition as a coup d'eta and therefore unconstitutional. Both sides claim to be on the side of democracy.

Tomorrow, we will see a continuation of protests. It is up to the Ayatollah what will happen next. Right now, I have no idea what is going to happen and I would not be suprised to see a much more harsher and extensive crackdown on the protests. The military could potentially be involved. But who knows, maybe the Ayatollah is hoping that his recent speech will quell the protests and does not realize the severity of the situation, that the current election has been declared void by the people.

I took a small position going short now because I don't think Ahmedinejad has an 85% chance of being sworn in but I still think he has the advantage. The Ayatollah does not want to back down and he may see this as a threat to the ideals of the Iranian Revolution that he was such an influential part of. He doesn't want to use violence but he may feel he has been backed into a corner from which violence on the part of the State is the only answer. Even then, we could see the opposition come out on top and Ahmedinejad may not be sworn in. So it is not all up to the Ayatollah for Ahmedinejad to be sworn in. But I don't think the opposition will be able to survive a violent crack down Tienanmen style.

Box Office Returns - Weekend 6/19/09 - 6/21/09

Very, very, slow week for Entertainment contracts this week. This has got to be the least traded Weekend Box Office in a couple of months. The only reason I can think of for this, is that Intrade didn't put any Box Office Contracts on its homepage.

This week we have "The Proposal" and "Year One."

Box Office Comparisons - "The Proposal"

He's Just not that into You - $27,785,487
Bride Wars - $21,058,173
What Happens in Vegas - $20,172,474
Failure to Launch - $24,411,322
Definitely Maybe - $9,764,270

For The Proposal, I am thinking it will do around $27 Million for the weekend.

Box Office Comparison - "Year One"

Observe and Report - $11,017,334
Harold and Kumar Escape from Guantanamo Bay - $14,908,404
Nacho Libre - $28,309,599
I Love You Man - $17,810,270
Superbad - $33,052,411
Adventureland - $5,722,039

For Year One, 17.7 Million for the weekend seems doable.

Here are the scores that Rotten Tomatoes and Metacritic currently have for "The Proposal and "Year One."

RT
The Proposal - 39%
Year One - 21%

MC
The Proposal - 49%
Year One - 41%

Chick Flicks don't really have a history of passing $30 Million and "The Proposal" isn't getting good reviews either so I don't expect to pass $30 Million like tracking is suggesting. "Year One" is getting really bad reviews and I just don't think it has the buzz to pass $20 Million.

I have very few contracts for this weekend. I didn't see any prices that I liked but I was able to to go long on "The Proposal" at 22.5 Million and short on "Year One" at 17.5 Million. It may seem contradictory to bet against one's own prediction but what matters in Box Office Contracts is getting good odds. I may think "Year One" is going to pass 17.5 Million but I don't think it has 75% chance.

Next week we have Transformers: Revenge of the Fallen, so we should get some more action but there has not been a lot of interest so far by people wanting to go short, so I'm glad I was able to get some contracts a week ago.

Twitter: The Poor Man's News-Wire

You know, the first time I had heard of Twitter, I thought it was just a useless website. A website that was just a ripoff of Facebook's status tool where you say exactly what you are doing.

I now know that Twitter has become something it was never intended for, it has become an instant news communication tool. It has given people from around the world, a new revolutionary tool to communicate that is faster then you can say "Ahmedinejad." The fact that I can receive a text message to my phone from an Iranian protesting in Iran is simply incredible. CNN, along with the main stream media, now finds itself competing with real people on the ground. You are getting your news from the people most directly affected, most knowledgeable of what is going on, unfiltered and uncensored.

Is it any wonder why the newspapers are dying? Who wants to read the news from yesterday, when you can get it now, and for free? Who wants to watch CNN or Fox News when people can read about the topic they specifically want to hear, from a blog written by someone who actually cares and really understands the subject they are writing about? Very rarely, will you ever hear a story about Intrade in the Mainstream Media, and if you do, rarely will you see any significant analysis of the prices available or how you might take advantage of such prices. This is the advantage web 2.0.

Blogs, Twitter, and Youtube are now truly revolutionary, oppressive leaders around the world can no longer silence the people and stop the flow of information. Hugo Chavez, would do well to pay attention if he tries to silence Globovision (the only significant opposition news on TV) in Venezuela. All he will accomplish by doing such a thing is to make his opposition's communication more underground, online, uncontrollable, and hidden from his view.

I also use Twitter to try gauge how a movie might do by using it to give me an idea of how the public thinks about a movie. A movie isn't going to do well because you think it's good or you think it deserves it. A movie does well because of good buzz and good word of mouth. And now a days, word of mouth is practically instant. As soon as you watch a movie, you text your friends and tell them how good you thought the movie was. You post on Facebook your personal review and your opinion on a movie probably means a lot more to your friends then what some reviewer; whom they've never met, thinks about the same movie. When you see a bunch of bad reviews and unfavorable tweets, don't bet on the movie doing well.

Twitter is a tool and like any other tool, it depends on how you use it. You still have to figure out what to search and which users have the most reliable information. What you get out of Twitter depends on the level of work you put into it. Most of the stuff that comes out of Twitter, Blogs, and Youtube is crap and you can waste a lot of time filtering out the junk. But every so often, you'll find a nugget of gold, and that makes it all worth it.

[Update] Box Office Returns - Weekend 6/12/09-6/14/09

Thanks goes to an acute, vocal, observer on Intrade's forum for bringing this to my attention. Apparently, there is a big new player in the entertainment markets. According to "MoneyMetalBets" he has up to $13,000 in Margin just in bids for Transformers right now.

There have been some users who made lines in previous Box Office Contracts but nothing of this magnitude. The only user I know of who could do this is Jesse Livermore over at WiserThantheCrowd but he doesn't like to mess with Entertainment contracts usually.

We should get Weekend Actuals for the movies this weekend in a couple of hours. Stay tuned for weekend analysis and a preview for next week.

[Update: 5:01PM]

Actuals are in.

"Pelham 1,2,3" made $23,373,102, which is even lower then what I thought the movie could make but it was very in line with what other Denzel Washington movies have made. John Travolta wasn't able to give it the bounce that I had anticipated earlier but this is a good thing considering I had decided to go short.

"Imagine That" made $5,503,519. Another bomb for Eddie Murphy, he has to be very careful what type of movie he makes next.

This week we will have "The Proposal", a chick flick which looks to be out "Year One." Here is where current tracking has these movies headed. RS has been pretty off in the past couple weeks. So don't take this information as written in stone. If tracking was right then predicting movies wouldn't be so damn hard.

RS
The Proposal: Between 26-29
Year One: Between 16-19

MTC
The Proposal: 30
Year One: 21

I don't have access to tracking directly so this might not even be true but I know that the source that releases them on the web has been correctly reporting one tracking service. It stands to reason that he would be honest about the other one.

Situation in Iran

[Update: 8:50PM EST]

U.S rejects victory claim by Iran's Ahmedinejad

----------------------------------------------------------------------------------

It seems the Iranian people are not buying the election results because of all the irregularities. The government has shut down facebook, text network, and the websites of the opposition. Riots in the street have gone all throughout the night. Rumors are flying that Moussavi might be under house arrest as well as other opposition members.

Looks like Moussavi's press conference where he announced he was the winner might be paying off. He is being very defiant and this gives his supporters something to rally around.

Here are two sources that are keeping up to date with the situation.

Huffington Post

Andrew Sullivan

Considering that the Iranian Election Contracts do not expire until Ahmedinejad is sworn in again, and that is two months from now, I have closed out of my position. I don't want to wait and considering that news out of Iran is not reliable, it is hard to tell what could actually happen.

Will the government crack down on the protests Chinese style or are the Iranians on the verge of a whole new revolution? Who knows? I think the Iranian government is going to stick to the results and crack down HARD, but I'd rather just cash out now and not wait.

[Update] Box Office Returns - Weekend 6/12/09-6/14/09

[Update: 1:40PM EST]

BoxOffceMojo has there Friday Estimates out.

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[Update: 12:00PM EST]

ERC Boxoffice has there Box Office Estimates for the weekend out.



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According to my sources, (sorry no link this time) "The Hangover" is going to be #1 this weekend again. It probably will pass $30 million.

As for "Pelham 1,2,3" , the initial bettors were wrong at first but now the odds are in line with expectations and the movie looks like it will pass $22.5 Million but probably not $27.5 Million. Looks like this movie will fall in line with all the other Denzel Washington movies.

"Imagine That" is a complete flop and is definitely not passing $10 Million, probably not even $7.5 Million. $5 Million for the moment looks safe. Whatever happened to Eddie Murphy's star power?

It is just Friday and the estimates can change depending on word of mouth and such but at this point, once they know what a movie has made on Friday, they usually know what it will make for the weekend. I will have more updates as the weekend progresses.

Overall, this a really good weekend.

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With regards to the Iranian Election Contracts, it looks like because of the wording of the contract, we will not have an expiry until after Ahmedinejad is sworn in as President again. This does not happen until Early August (if the past swearing in ceremonies are any judge).

Iranian Election Update

[Update 7:11 PM EST] Looks like Ahmadinejad has won this thing by a landslide. It doesn't even look like their will be a run off election.

According to Al Jazeera,

"According to Kamran Daneshjoo, chairman of the electoral commission at the interior ministry, after 21 million ballots were counted and 47.3 per cent of ballot boxes, Ahmadinejad had received 15,251,781 votes.

That compared to 4,628,912 for Mousavi, Daneshjoo said.

The figures from the interior ministry so far give Ahmadinejad 66 per cent of the vote and Mousavi with 31 per cent.

According to the interior ministry figures, the elections two other candidates Mohsen Rezai, a former commander of Iran's Revolutionary Guards and Mehdi Karroubi, an ex-parliament speaker - came distant third and fourth with 259,456 votes and 132,935 votes respectively."

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[Update: 11:07] One of the saddest things I have ever read, an Iranian girl writes about how she is a pretend supporter of Moussavi just so the "posh" guys will notice her. I don't think this says a lot in favor of Ahmedinjed but I think it provides a lot more insight into the what the average Iranian thinks then some of the news reports out there.

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The Polls in Iran are now officially closed at 10:30 EST. They were extended by one hour because of the massive turnout. We should know the results Saturday.

Reasons that Ahmadinejad looks good despite some of the media reports are these.

1.) Text Messaging in the country was down for most of the day, no doubt this hurt the communication of the opposition and the youth vote.

2.) Octavia Nasr of CNN reports on Twitter "Turnout in Iranian villages is as high as 90% says Al-Arabiya analyst. That's good news for President Ahmadinejad. Democracy at its best!"

3.) There was another rumor on Twitter about Chinese pens with invisible ink "Reports about Chinese pens whose ink turns invisible after a while is true. Take your own pen for election"

4.) An anecdotal report from From Saeed Kamali Dehghan reported in the Guardian newspaper.

"There is a lot of concern among Mousavi supporters about the polling centres in Iran's embassy in the United Arab Emirates (home to half a million Iranians), where there are no reformist representatives to monitor voting.

The interior ministry had also increased the numbers of mobile voting booths - which collect votes from small villages, hospitals and other hard-to-reach places - to 14,000, 10 times more than in the last elections.

Many analysts fear the lack of monitoring of mobile polls might also lead to widespread vote-rigging. Pejman Semnani, an 20-year-old Iranian university student I met in a Tehran polling booth, expressed his fears about mobile polls: "Mobile polls are able to change the results, everybody is concerned about the increase in the number of mobile polls, which reformist newspapers say is neither reasonable nor necessary."

Do not be alarmed by reports of high turnout. Many also believed that a high turnout would help Kerry in 04 and that turned out not to be the case. If reports of turnout in the rural countryside are true, then they are voting in even higher numbers then their urban counterparts. And clearly from the quote above, we can see how the Government is being used to help the incumbent.

People are betting big on Moussivi on Intrade and he even reached 80% last night. I got some more contracts going long on Ahmadinejad with an Avg of 25. Combined with my earlier contracts I had acquired I am basically betting at 2-1 odds that Ahmadinejed will win.

Box Office Returns - Weekend 6/12/09-6/14/09

Predicting the Opening Weekend Box Office is by no means easy but the wide variety of opinions of how a movie will do can lead to prices which can be taken advantage of.

When considering how good a movie can do, it is best to compare that movie to similar movies and see how they did. In the case of “The Taking of Pelham 1,2,3” we can compare this movie with previous Denzel Washington movies. All of these movies had around 3,000 theaters.

$20,018,620 - The Manchurian Candidate
$43,565,115 - American Gangster
$20,574,802 - Déjà vu
$22,751,490 - Man on Fire
$28,954,945 - Inside Man

John Travolta hasn’t been part of an action movie in a while but we do have some movies to compare for him.

$18,145,632 – Swordfish
$11,511,960 – Basic

Needless to say, John Travolta isn’t the star he used to be but I bet he can add a couple million to Pelham 1,2,3

The Taking of Pelham 1,2,3 is going against some fierce competition with “The Hangover” and the Pixar movie “Up” and both of these movies look like they could pass 30 Million again. Reviews for Pelham 1,2,3 have also been very mixed and they probably won’t do the movie any help with a 43% Rotten Score on Rotten Tomatoes and 55% on Metacritic.

Now, I’m betting that Pelham 1,2,3 could have done around 20-30 Million with just Denzel Washington. Add in John Travolta and 25 Million is looking like a pretty good floor. But 30 Million is not at all a sure thing and 35 Million is not looking good.

I was able to short the PELHAM.123.+$35.0M contract for 50 very early in the week and it surprisingly stayed around 40-50 for a while. Considering that tracking and most predictions out there have it around 30 or below, Under 35 Million seems pretty safe this week and the price has taken quite a tumble.



I haven’t done much research for “Imagine That” the Disney movie with Eddie Murphy but Tracking had it around 8 Million this week and most predictions have it in the low teens. Look for it to make around 12.5 Million but I haven’t gone either way with this movie because I think there is a lot of uncertainty with how it will do.

Thanks

A big thanks goes out to Wiser Than the Crowd and Midas Oracle for welcoming me into the blog community.  

The Iranian Presidential Election

Reading about the Iranian Election, I am reminded of one of Hugo Chavez’s presidential re-elections in Venezuela. In 2006, Chavez had to face off against Manuel Rosales, an opposition candidate who managed to unite the opposition and rally against Chavez. Hugo Chavez managed to win his re-election with many of the same advantages that Ahmadinejad has now.

Chavez had advantages thanks to being the leader of the government and used this to his advantage much like Ahmadinejad has done also. According to the Christian Science Monitor “Toppling Ahmadinejad, who has been in perpetual campaign mode for four years, visiting every province at least twice and spreading cash and favors to the millions of Iranians who have written letters to him, was never going to be easy.” Much like Chavez, Ahmadinejad has been spreading good will to his supporters and the people by spreading the oil wealth around. This is an advantage that can not be ignored, for years now Ahmadinejad has been buying the goodwill of his people and his base with straight cash. His supporters know this and to continue getting this cash, his supporters will come out and vote for him much like Chavez's supporters did for him.

Ahmadinejad’s base is the poor and rural vote, which may help to explain why some of the polls that have come out of Iran favor Mousavi and not Ahmadinejad. Many of those polls show Mousavi in the lead but many of these polls are conducted via telephone and one has to wonder how whether or not they are truly random samples of the population of Iran? How many of the poor and rural population have regular access to telephones?

The structure of this election is also different from the way American elections are held in that there will probably be a runoff election if no candidate has a clear majority. There are two reform candidates and two conservative candidates. No doubt, Mousavi and Ahmadinejad will get to the runoff. If the 2nd Conservative candidate’s vote is bigger then the 2nd Reform candidate vote, then Ahmadinejad could be well placed to win in the runoff.

Media coverage of the election seems to be very hopeful that Ahmadinejad will lose and that this will support the theory of the “Obama effect.” For the media to think that Obama has had a huge change in Middle East elections when he has been in office for less then 200 days is a little naïve to say the least. The fact is, the global economic recession has had an impact everywhere around the world and has helped the opposition win in many countries. With the economy being the number #1 issue in Iran, as it is everywhere else in the world, I think the “Obama Effect” is just wishful thinking.

Finally, there is a big question as to how fair and free this election truly is. The President of Iran is not the top guy in charge and the Ayatollahs of Iran retain ultimate political power. One thing we will probably never know is how much power they have over the election and whether or not they can manipulate the vote. According to NPR “Some prominent reformists believe it will take an additional 5 million votes to compensate for improprieties.” And according to the same Christian Science Monitor article linked earlier “Ahmadinejad has received frequent support from Iran's supreme religious leader, Ayatollah Sayed Ali Khamenei.” Also, no President in Iran since the Iranian revolution who has run for re-election has ever lost. All these factors have me in favor of Ahmadinejad winning this election and I hope to god that I’m wrong.

An Intro to Intrade; Written by 64Push

Intrade is pretty much the leading prediction market on the internet. By prediction market I mean that basically users are predicting whether or not events will happen on a scale of probabilities: from 0% to 100%. You can bet on politics, weather, reality shows, the Oscars, potential wars, CEOs being fired, companies going bankrupt (GM is 63% likely to go bankrupt this year) among many, many, other things (but no sports, for that, there's Betfair.com). Intrade provides useful estimates of the probability of real events occurring. The reason why the estimates are fairly accurate is because money is on the line. If, for example, somebody is putting up money saying that for example John McCain is going to win the election with probability 55%, this bet will surely be taken by somebody who realized that Obama was way ahead. This will force the price/probability down to the true value. I'll explain in greater detail:

Contracts

People are trading contracts on this site. Let's look at our example from before. Suppose Alice wants to wager 5 contracts that McCain will win the election with probability 55%. Contracts are valued at 1/10th of the probability - so she's saying that she wants to pay 55/10 =$5.50 per contract. Contracts will expire at either 100% or 0% once the event takes place (in this case, when election results come in).This means that each contract will either be worth $10 if McCain wins, or 0$ if Obama wins. So if McCain wins, Alice would earn $10 - (amount paid) = $10 - $5.50 = $4.50 per contract. And if McCain loses, her contracts are worthless, they expire at $0, and she lost the $5.50 per contract that she bought them for. Now we understand the bet Alice was trying to make: She wanted to wager 5x$5.50 = $27.5 on McCain to potentially win 5x ($10-$5.50) = $22.50 in profits.

Exchange Based Trading

Intrade is an exchange based site - it sets up a marketplace where people are able to place and take bets. Nobody on the site is betting against Intrade, people are being paired up and are betting against other users. In the above example, Alice would post a bid for 5contracts of McCain at 55% a piece. She now needs to wait for somebody else, say Bob, to take her offer to fill the other side of the contract. That is, Bob needs to see her bid, and accept the bet by putting up the other side (100% - 55% = 45%, or $4.50 per contract).So Bob is actually betting on McCain to lose. He would get Alice's$27.5 if McCain lost, and he would lose his $22.50 if McCain wins (which is then paid to Alice).

Instead of posting a price that you want, you can take prices that are currently offered by other people. But somebody has to be the first to offer a price for a contract. People can even sell a contract without already owning one, which works as follows. Say Charlie sees Alice's bid, but I want her to pay a bit more. Charlie can then post an ask, or an offer to sell, McCain contracts at say 60%. Since Charlie is selling the contract, the price he's putting it up at is the price that the buyer would pay. Say Charlie puts up an ask of 5 McCain contracts at 60%. This means he wants somebody to pay 5x60% = 5x$6 =$30 for McCain to win, and he will put up the other side: 5x40% = 5x$4= $20. So Charlie wants to wager $20 against McCain, to potentially win $30. Note that this is a worse deal for Alice than she wanted to get earlier.

Long vs. Short

Taking a position where you want something to happen, like Alice, is called going long. Taking a position where you are betting against something happening, like the Bob or Charlie, is called going short. These terms are also used in the stock market, and refer to basically the same thing. If you are going long, you are betting that a contract will expire at 100%, whereas if you are going short, you are betting it will expire at 0%.

Markets

A market is simply a collection of contracts that are all expired together. In our election market, we would have a contract for McCain winning, another for Obama winning, another for Ron Paul winning, and so on. It may also contain a contract for the field winning, meaning anyone without a specific contract. Typically one contract per market will expire at 100%, and all others expire at 0%. In the election market this makes sense, because only one person will win presidency, and all others lose.

Here's a picture of the American Idol Elimination Market for Apr 01.

Let's see what we have here. Notice the different contracts for each of the contestants. The Bid column shows the current best price that people are willing to pay for one of those contracts, and the B Qty says the number of units available at that price. For example, somebody wants to bet on Joy being eliminated, and wants to pay 65% or $6.50 per contract, and wants to buy 9 contracts. The Ask column is the current best price that someone is willing to sell at. So for the Joy contract, somebody is willing to sell 2 of those contracts at 79.8%. Last is just the last price matched, Vol the total number of those contracts matched, and Chge is the change in price over the last two contracts traded. You can click on any contract to see the whole list of current offers and bids, and not just the best ones (you might be interested in buying more than 2 Joy contracts, for example). You can also see a graph of how the prices have been fluctuating over the past 7 days (or 500 trades, whatever's smallest).

A Note on Going Short

Note that by going short you can actually win in multiple ways. In the example above, Bob wants McCain to lose, so he could win his bet if Obama wins, or even if Ron Paul wins. Consider the American Idol Elimination Market. You can see that if you short a particular contestant, there are many different ways you can win (any one of the other contestants getting eliminated). Thus when you are going short in markets where there are many potential winning contracts you will normally not be getting as good of odds. This is because you are betting that a contract will expire at 0, which will happen to all but one contract in a given market. But if you short 2 different contestants, then you are guaranteed that at least one of your bets are winning, because at most one of the 2 people you shorted can be eliminated (at most one of the 2 contracts can expire at 100%).

Fees

I don't really want to go into fees, there are a lot of subtle rules, and really I don't like the fee format. Basically, you pay $0.05 per contract traded. It's considerably more complicated than that, but its boring stuff that I'm sure nobody cares about, so just trust me on the fee calculations. If anyone is curious, let me know and I'll fill this section in properly.

Deeds wins primary; Intrade gets upset right!

Here are the Election Results

Intrade got it right and McAuliffe never stood a chance.  Good job on the part of Creigh Deeds to hang in there and make a comeback.  America likes a comeback story.  

Interesting Fact: Republicans win the governor's seat everytime after a Democrat is elected President ever since the 1970's.  

Mahmoud Ahmadinejad and Terry McAuliffe

What do they both have in common?  Both Mahmoud Ahmadinejed and Terry McAuliffe have elections soon and both are going to lose according to Intrade.  

Here is Ahmadinejed's Price History at Intrade.  

Ahmedinejad was certainly the favorite trading around 60% steadily and as high as 80% for a little while and the recent shift in prices comes as a big suprise.  According to Intrade the new President is going to be Mir Hussein Moussavi who traded last at 55%.  Ahmedinejad last traded at 40.1%.  

Terry McAuliffe's campaign for governor of Virginia isn't doing any better and it looks like he won't get past the Virgina Primary.  I never thought he really had a chance considering his eccentric personality and his recent failures running the Hillary Clinton Campaign.  McAuliffe has had an even bigger fall then Ahmendinejad and last traded at 10% on Intrade.  

McAuliffe is reliving his past election with Hillary Clinton and is going down when he was considered the favorite for the majority of the campaign.  Hopefully we won't see this guy on TV anymore, but I doubt it.  

The blog www.wiserthanthecrowd.com was all over the McAuliffe meltdown in the polls and had multiple posts on it.  

New Poll in Virginia

More Virginia Polls

Virginia Governor: Deeds running away with it

Anyone paying attention probably bought heavily into Deeds and this led to his incredible rise in price into the 90's but considering this is a primary and polls can be very inaccurate, the contract seems a little overvalued at the moment.  

Election days can get crazy with regards to prices and they can swing in any direction quickly depending on the news coming out.  We could be witnessing the same thing today.  

We have now seen some movement downward but Deeds is still in the high 80's and looks to win this thing.  McAuliffe's only chance now is that the polls are wrong the same way they were for Hillary Clinton in New Hampshire.   I wouldn't bet on it.