Double Blind

The Canadian election is over. I doubt there will be another election until at least the fall of 2007 (the next focus of my electoral research will be on select states in the 2006 USA midterm elections for the US Senate and Governorships). In terms of how I predicted, I am quite happy with my projection models. There were significant deficiencies in my models in terms of how the candidates performed in Quebec (I obviously, along with the rest of the country, thought the Bloc would do better at the expense of the actual Conservative performance). I also thought the Liberals would fare worse in British Columbia and Quebec.

That said, my Conservative seat projection (123) was very close to the actual result (124), while the Liberal result was off by 11 (103 actual vs. 92 predicted). The BQ was off by 9 and the NDP was off by 3. My provincial predictions were pretty much correct except for BC (where the Liberals got more seats where I had previously predicted NDP/Conservative pickups) and Quebec (where the Conservatives surprised). I nailed Ontario and the rest of the country, plus or minus a few seats (Reg Alcock losing by 100 votes in Winnipeg was certainly not on my radar).

The prediction puts me ranked 4th in terms of the pundits out there (summarized on the UBC ESM webpage) as my absolute error in seat count was 24. Milton Chan of Election Prediction did one hell of a job calling this election with an absolute error of 12 seats – I’m sure we are all looking at the Quebec numbers and asking ourselves how we could have missed it. I saw the 32% polling numbers outside of Montreal and just assumed that these would be sucked up from the Liberal and Bloc candidates, but the Bloc candidates would still be getting narrow victories in most of the seats, so I just credited the Conservatives with two extra seats. Not so.

In terms of my provincial predictions in BC, I got 28 out of 36 seats correct, which was a woefully inadequate performance. Considering I live in this province and also that I consider my projections of the 2005 provincial election a failure, I’ll have to re-examine my numbers and hopefully come with a more accurate projection in the next election.

In terms of the money game, I am very happy with my performance. I don’t think this could have gone much better than it has. I recall that six months ago, when people were openly questioning Steven Harper’s leadership of the Conservative party that he was trading at about 10% on Tradesports to get more seats than the Liberals. When the election was called, I thought the Conservatives were going to be running a campaign strictly on Gomery and corruption – they didn’t. They had been spending the last six months preparing and researching a campaign and absolutely slaughtered Martin and the Liberals, who spent most of their ammunition trying to keep their government alive.

When the Conservatives were trading at around 30% in mid-December, I knew that they were fighting the right campaign – on policy. That’s when I starting buying them in volume. This was during the time when the Conservatives were still at 30% popularity in the polls and media pundits were claiming they couldn’t break out of the 30% threshold. Little did they know that the strategic focus of the campaign was to present a policy-based election, to give something for Canadians to vote for. When the Conservatives were trading at 50% after the RCMP investigation on income trusts broke out during Christmas time, I knew it was over and placed a second and larger stake. The rest, they say, was history.

It’s too bad election trading doesn’t scale up by a factor of 100 as I could probably make a career out of it assuming the markets were as inefficient as they were this time around. I don’t think they will be nearly as inefficient the next time, which means I have to tighten the screws on my modelling and be that much more prepared than the rest of the market.

The Liberals are going to be spending some time in opposition and they will be credible, considering a lot of their MPs know the ins and outs of government operations which they were running just months earlier. They’ll be able to ask pointed questions on material weaknesses of government departments they left over the past 12 years and will try to embarrass the Conservatives. The Conservatives need to climb up the learning curve on operating a government very quickly before their time expires in this minority government. It will be an interesting game to watch.

This entry was posted on Tuesday, January 24th, 2006 and is filed under Politics. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.