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Forecasting with Markets · 2005-09-19

What does it take to forecast an election outcome? Well, a internet trading platform and a thousand guys, who like to burn money. This is pretty cheap, given the costs, other methods inflict. Here are the results of wahlstreet.de:

PartyForecastShareDifference
SPD33.1%34.3%-1.2%
CDU40.0%35.2%+4.8%
FDP9.7%9.8%-0.1%
Die Gruenen7.8%8.1%-0.3%
Linkspartei.7.7% 8.7%-1.0%
Others2.9% 3.8%-0.9%

Given the costs this is quite a good forecast. To be perfectly fair, the market was open up to 5.55pm. There are people, who had access to survey figures at arround 4.30pm on sunday already. If you have a look at the charts you will see, that there was increased market activity sunday afternoon. Still, the big surprise, the result of the FDP was already forecasted saturday evening. This is very likely caused by Stefan Raabs awful saturday evening test election show, where the FDP made it well over 10%. The other big surprise, the results of the CDU on the other hand was not predicted at all. This does not support the proposed 'insider trading'. One could have made a fortune, if one only had known.

Update: I just added up the values of my shares. I put 20 bucks on the table four weeks ago and ended up with 20.47 bucks. This gives a yield return of 47cent or 2.35%


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