Is there still value in betting against Romney in Iowa?
November 20, 2007Why you should still short Mitt.
One of the most interesting development in the race has been the extent to which Romney’s supremacy in Iowa has been challenged by Mike Huckabee. Although Huckabee is still, by my estimation, over nine points behind Romney, the fact that the governor of Arkansas has managed to get so close to Romney without spending any money on advertising, indicates that Romney’s support in the Hawkeye state is very thin. This has been reflected in the betting markets with the contract on Romeny winning Iowa falling from a peak of 69.3 in early October to the current level of 55.9. However, I think that the Romney contracts still have a way to fall as the fact that Huckabee is attracting enough money to begin airing some adverts in the Hawkeye state will boost his name recognition and make him seem a more credible candidate. I believe that once Huckabee has been perceived as the more credible candidate, a lot of the Evangelicals who were unsure about Romney and Thompson, or were opposed to Romney but were not decided about who was best able to stop him, will move to Huckabee. I firmly believe that Romney’s contracts are overvalued until they enter the low 40s.
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