Charity Wager on the Presidential Race

I sent this offer this morning to the 2,000+ people on my investing email list and have $11,000 of commitments to give to charity (either to KIPP from my friends who think Romney’s going to win, or from me to their favorite charities), so let me know if you want to participate as well:

With everyone focused on the election tomorrow, let’s have some fun and raise money for charity. I am willing to match up to $25,000 worth of bets on the outcome of the presidential race. My proposal is simple: if Obama wins (my bet), you donate what you bet to my favorite charity, KIPP charter schools in NYC (www.kippnyc.org; I’ve been on the board for more than a decade), and if Romney wins (your bet), I’ll make a donation of the same amount to your favorite charity.

If you’re on my email list, I’ll take your word: just email me by midnight tonight the amount you want to wager (between $500 and $5,000 please) and your charity, I’ll email you back to confirm. First come, first serve!

Full disclosure: the majority of national and swing state polls as well as every betting site shows that Obama is favored anywhere from 2:1 (www.intrade.com) to 6:1 (http://fivethirtyeight.blogs.nytimes.com), and I’m only offering a straight-up bet. Thus, statistically speaking, I think I’m making a high-probability, high-expected-value wager (I far prefer that on Wednesday you will make a donation to my favorite charity than vice versa!). But as John Mauldin points out in his latest essay (http://advisorperspectives.com/commentaries/millennium_110512.php), in every market there are plenty of people who are willing to make seemingly low-expected-value bets, perhaps because they think they have better information or have analyzed it better or historical patterns no longer apply – or are simply letting emotion substitute for logic.

If you think Romney is likely to win, here’s an opportunity to put your money where your mouth is. If you’re right, your favorite charity will benefit, and if you’re not, you’ll be making a donation to another great charity.