Polls & Opinions VS. The Odds

If presidential polls are to be believed, it would be President Hillary Clinton preparing for the next election and not President Trump.

The polls before the 2016 election all pointed to a Hillary landslide, but things didn’t exactly turn out that way.

Back in November of 2016, right before the election, the New York Times predicted Hillary Clinton had an 85% chance of winning the presidential election. They weren’t the only ones. Nearly every other news outlet reported 3 to 4 point leads in battleground states favoring Hillary Clinton.

THEY WERE ALL WRONG!

Clinton was so confident in the polls that she famously skipped campaigning in Wisconsin, a key battleground state, in the waning days of her campaign. She didn’t even have a concession speech prepared – only a victory one.

After the election, Clinton and the media outlets went into damage control – blaming her loss on any of several excuses including the polling methodology, silent majority, Russia collusion, etc.

So what’s happening this year?

According to the New York Times, Joe Biden leads by 10 percentage points!

It’s not just left-leaning outlets showing favorable numbers for Biden. In swing states, right-leaning Fox News shows Biden leading by 10 points in Arizona and 4 points in North Carolina. Rasmussen Reports has a 4 point lead for Biden in Ohio. Monmouth University polling shows the tightest race with Biden leading by only 2 points.

One of the few polling firms showing a lead for Trump was WeAskAmerica that found a 5 point spread in Missouri in favor of the incumbent.

Looking back from August 5th up until today, the polls have overwhelmingly favored Joe Biden. By all accounts, it looks like Joe Biden has the election in the bag, but do voters think that?

Probably not, except for maybe Biden himself – considering not much is coming out of his camp. Nobody should rely on the polls – least of all Biden. Not after 2016.

If we’ve learned anything from 2016, it’s that the polls are unreliableThe problem is bias. The news outlets – right and left – are not impartial no matter how much they claim to be.

It’s no surprise that now more than ever, the general public is skeptical of the objectivity of mainstream media outlets. I would even go so far as to say that finding reliable reporting is harder to come by these days. Stories can take on wildly different interpretations depending on the outlet.

When did news become pure opinion?

If we can’t trust polls and popular opinion, who can we trust? Las Vegas.

WHAT?!

Don’t ask what the polls are saying. Instead, look at the odds.

What is Las Vegas saying and why do we care?

Because it’s in their financial interest to be objective. Otherwise, if they let their personal biases come into play, they can stand to lose a substantial amount of money.

Thank goodness for Las Vegas – a town where a person puts their money where their mouth is. Nothing biased about betting when a person puts a hard-earned week’s wages or more on the line.

No ideology. No feelings. Just a desire to win.

And like anything else in Las Vegas, there are bets placed on who will be the next President of the United States. And by all accounts, Vegas is putting even odds on either Biden or President Trump winning the election.

Betting sites like Bovada have Joe Biden and Donald Trump in a dead heat according to the odds.

Don’t believe the polls. Look at the ODDS.

Why?

You only have to look at the science of bookmaking to understand why the odds are a better gauge of the outcome of the upcoming election than the polls.

The bottom line is people on average will put money with the team or candidate that will give them the best chance of making money.

Of course, there are the kooky outliers that will put bets on Michelle Obama and Kanye West winning the election even if the odds are astronomical. Those bets are sure losers, but it won’t stop some people from making them – on the outside chance of winning and collecting a huge payout.

To understand the role and reliability of Las Vegas odds, let’s talk about how to read betting charts, also known as American Odds.

Positive odds represent the profit a bettor will receive if they bet $100. If the odds of Michelle Obama winning is set at 1,000:1, a $100 bet on a Michelle Obama victory will return $100,000. Fewer people are betting on those odds (because it’s a long shot.)

Negative odds numerically represent what a bettor would need to bet to win a $100. So if the NYT wanted to put its money where its mouth is betting Joe Biden will win, they would have to bet $120 to make a profit of $100 – meaning a lot of people are betting he’s going to win.

And right now with even odds, people think Donald Trump is just as likely to win them a little extra money on November 3rd.

Why don’t polls work?

Polls don’t work because of bias and because there is no science or math behind how questions are asked or interpreted. 

In other words, there’s too much room for emotion to come into the equation. Betting takes the emotion out of decision making. When money’s on the line, people truly vote with their pocketbooks.

When people take surveys, not much is on the line and there’s no way of knowing how their answers are going to be interpreted by the outlet taking the poll. The New York Times could ask, “Are you satisfied with the current direction of the economy?” and take a negative response as a vote for Biden.

Another reason for not trusting the polls is that I don’t think that people trust the media and are leery of revealing how they’ll vote to a random person over the phone. I personally do not like talking to pollsters. In this case, the silent majority theory for Trump’s 2016 doesn’t seem so farfetched.

Compare polling methodology to betting. With betting, there’s no grey area when people are putting money on the line for what they think is going to happen. There’s A and then there’s B. There’s no in-between.

So why am I talking about polling vs. odds?

Because the world of investing is very similar to the world of polling and odds. On the one hand, you have biased news outlets, pundits, and talking heads touting this and that company or stock and the mainstream investors who gobble this stuff up and invest more often with their emotions than with their heads.

Just look at the stock market since the beginning of the COVID-19 outbreak in March when it lost nearly a third of its value and then has ping-ponged almost all its way back to its pre-COVID levels.

How is can this be with unemployment still high with GDP consistently declining? Yet, stocks are trading like gangbusters.

The stock market is demonstrating that investors aren’t investing with their heads.

It’s easy to bounce from one investment to another with instant liquidity and for many new investors, with only a few hundred dollars. There are no real financial consequences on the line.

With no real consequences to suffer, mainstream investors are investing with their emotions and not with their heads and that’s why you shouldn’t trust Wall Street to tell you what to do with your money any more than you should trust the polls to tell you who your next President will be.

Instead of following Wall Street pundits or what the crowd is doing, who can you rely on to tell you where to put your money?

Just like with Vegas odds, follow the smart money.

The smart money deals with real-world financial stakes because they’re not putting hundreds of dollars on the line like the day traders, they’re putting tens, even hundreds of thousands of dollars on the line. And the types of assets they’re committing to, they’re often doing it for the long haul.

With lock-up periods of a minimum of five years, these investors are confident about their chances when they commit their capital to a specific opportunity.

So where is the smart money putting their money? REAL ESTATE and CASH.

Cash flowing commercial real estate has historically been a reliable shield against recession and emotional investing that contributes to Wall Street volatility.

While Wall Street investors chase the dog’s tail, the ultra-wealthy invest for the long-haul. Long-term private investments in commercial real estate have long offered passive income, growth, and a buffer against inflation, recession, and volatility through tangible assets.

Besides loading up with commercial real estate, smart investors are also stockpiling cash to go bargain hunting.

Who would you trust?

The day trader with a $200 Robinhood balance or the ultra-wealthy investor who’s so confident in his investment choice, he’s willing to part with tens even hundreds of thousands of dollars for five years plus?

For building wealth, take emotion out of the equation. 

Avoid Wall Street volatility and follow the smart money to cash-flowing commercial real estate.

Like Vegas odds that take emotion and biases out of the election equation, long-term private investments take emotions out of the investing equation by imposing long lockup periods.

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