h1

The Tory leadership – a gambler’s tale

November 28th, 2005

    Only nine days to go before the pay-out

Whatever your personal view of the Tories or David Cameron we hope that all those who have been tempted to bet will have had a profitable leadership election. The changing implied probabilities Cameron based on best betting odds are illustrated in our chart. From a best price of 10/1 his price has tightened even further overnight to 0.03/1.

After going strongly for him on July 3rd and then on August 1st I lost my nerve in the week before the Tory conference in Blackpool and on September 29th switched to Ken Clarke. This proved very costly because it meant closing down a spread on Cameron at the 10 level – which was 14 less than I had bought him at. The following week, after being impressed by his campaign launch, it was back into Cameron again – this time at the 9 level.

    The mythology has developed that Cameron’s success is all down to one speech. But Davis was still a strong odds-on favourite when he walked onto the Blackpool stage. To my mind, and this can be seen in market reactions, the biggest boost Cameron got was the Frank Luntz “focus group” on Newsnight at the start of the conference which set the scene for the big speech.

There was a loss of nerve again a week after the conference when all the talk was of some sensational revelations in the Sunday papers on Cameron. The day before the spread bet was closed down at 49 – a nice profit – but would have been a 100 times my stake level on December 6th.

By November 1st the only real issue was the size of Cameron’s victory. Although the Tory member polls were pointing to a 76:24 margin I went for the 3-1 that was then available on Cameron getting less than 66%. This bet had the beauty of providing some cover if, by any chance, Davis managed to do it.

There’s also been the minor market of how old the winner will be when the sell spread level was 49 and the only options were 39 and 56 years old. On top of all this betting I made a fair bit going into Ken Clarke immediately after the French referendum in May and then coming out a few days later after reading the negative comments from PB.C’s Tory community.

Looking back at my Betfair account my most profitable punts were not on Cameron at all. I began laying (betting against) David Davis heavily from June onwards when he was odds on because I simply could not see him as party leader.

So a nice profit awaits on December 6th – one that will be even bigger if Cameron comes in below 66%. But it would have been a lot more if I had kept my nerve.

Mike Smithson






Comments are closed.