1 00:00:00,040 --> 00:00:05,880 Speaker 1: Eleven three l global business news twenty four hours a 2 00:00:05,960 --> 00:00:09,080 Speaker 1: day at Bloomberg dot com, the Radio plus Molobile lap 3 00:00:09,280 --> 00:00:12,560 Speaker 1: and on your radio. This is a Bloomberg Business flag 4 00:00:12,760 --> 00:00:16,599 Speaker 1: from Bloomberg World Handquaters. I'm Charlie Pellett. Stocks plunge the 5 00:00:16,640 --> 00:00:18,759 Speaker 1: most in ten months. We are brought to you by 6 00:00:18,800 --> 00:00:23,240 Speaker 1: the American Arbitration Association, the International Trade or Business Dispute 7 00:00:23,560 --> 00:00:27,520 Speaker 1: Resolve Faster with the International Center for Dispute Resolution, the 8 00:00:27,720 --> 00:00:32,520 Speaker 1: leader in Alternative Dispute resolution around the world. I see 9 00:00:32,640 --> 00:00:36,080 Speaker 1: d R dot org. US stocks joined us sell off 10 00:00:36,120 --> 00:00:39,879 Speaker 1: in global risk assets on speculation that the UK decision 11 00:00:39,920 --> 00:00:44,199 Speaker 1: to leave the European Union will hamper worldwide growth. Equities 12 00:00:44,240 --> 00:00:47,120 Speaker 1: sank to session lows in afternoon trading that now got 13 00:00:47,159 --> 00:00:50,040 Speaker 1: down more than six hundred fifty points. It ends the 14 00:00:50,040 --> 00:00:53,840 Speaker 1: Friday session at seventeen thousand, three hundred ninety nine, down 15 00:00:54,160 --> 00:00:57,400 Speaker 1: six hundred eleven points, a decline today of three point 16 00:00:57,440 --> 00:01:01,040 Speaker 1: four percent. SMP five hundred index down seventy six so 17 00:01:01,160 --> 00:01:04,400 Speaker 1: dropped there of three point six percent, Stack down four 18 00:01:04,440 --> 00:01:07,720 Speaker 1: point one percent. The tenure yield now at one point 19 00:01:07,800 --> 00:01:11,360 Speaker 1: five six percent. Gold surged fifty seven dollars the ounce 20 00:01:12,440 --> 00:01:16,039 Speaker 1: one again there of four point six percent. Sterling got 21 00:01:16,120 --> 00:01:18,880 Speaker 1: to a thirty year low. I'm Charlie Pellett. That's a 22 00:01:18,880 --> 00:01:24,280 Speaker 1: Bloomberg business flash. You're listening to taking Stock with Pim 23 00:01:24,360 --> 00:01:29,440 Speaker 1: Fox and Kathleen Hayes on Bloomberg Radio. There are analysts, 24 00:01:29,440 --> 00:01:33,240 Speaker 1: there are strategists, and then there are bookmakers. Steve Boudden 25 00:01:33,360 --> 00:01:36,600 Speaker 1: is the chief executive of pick nation dot com. He's 26 00:01:36,640 --> 00:01:40,800 Speaker 1: also the vice president of Gaming Nation and uh Well. 27 00:01:40,880 --> 00:01:43,920 Speaker 1: Pick Nation is the world's largest online pay per view 28 00:01:44,000 --> 00:01:48,080 Speaker 1: analysis site in the sports handicapping industry. Here to help 29 00:01:48,160 --> 00:01:51,520 Speaker 1: us explain what went right and what went wrong in 30 00:01:51,600 --> 00:01:56,800 Speaker 1: handicapping the vote for Brexit. Steve Boudin from Miami Beach. Steve, 31 00:01:56,840 --> 00:01:58,800 Speaker 1: thanks for being with us. It's so good to be 32 00:01:58,920 --> 00:02:02,160 Speaker 1: with you. So we've keep kind of characterizing it is 33 00:02:02,200 --> 00:02:04,880 Speaker 1: what did the bookmakers get wrong? But it's not really 34 00:02:04,920 --> 00:02:08,360 Speaker 1: the bookmakers correct. It's those people placing the bets. You 35 00:02:08,400 --> 00:02:10,880 Speaker 1: know you got it right that you know, it's so funny. 36 00:02:10,919 --> 00:02:14,000 Speaker 1: The biggest misconception in the bookmaking business is that every 37 00:02:14,040 --> 00:02:16,959 Speaker 1: bookmaker has some Chinese guy in the back room with 38 00:02:17,080 --> 00:02:20,040 Speaker 1: a syllabus and a calculator trying to figure out what 39 00:02:20,120 --> 00:02:22,360 Speaker 1: the odds of the games are going to be. But 40 00:02:22,560 --> 00:02:25,160 Speaker 1: just like any market in the world, the odds are 41 00:02:25,160 --> 00:02:28,840 Speaker 1: not determined by the oddsmakers. The odds are determined by 42 00:02:28,840 --> 00:02:32,600 Speaker 1: the betters. And for instanance football, the lines come out 43 00:02:32,680 --> 00:02:35,359 Speaker 1: the night after the games, with the same night to 44 00:02:35,440 --> 00:02:37,800 Speaker 1: the games end Sunday the games and Sunday night the 45 00:02:37,800 --> 00:02:40,400 Speaker 1: new lines for the next week come out and those 46 00:02:40,440 --> 00:02:43,520 Speaker 1: lines get bet all week long until Sunday, and you 47 00:02:43,520 --> 00:02:45,520 Speaker 1: could start every game and pick them, but by the 48 00:02:45,560 --> 00:02:48,040 Speaker 1: time it got the Sunday, that line is going to 49 00:02:48,120 --> 00:02:53,480 Speaker 1: be the correct line according to the market. So, uh. 50 00:02:53,680 --> 00:02:58,800 Speaker 1: The There's a lot of people talking though about how 51 00:02:58,919 --> 00:03:02,720 Speaker 1: the bookies got it wrong when it comes to this 52 00:03:02,800 --> 00:03:08,200 Speaker 1: political vote, which is not exactly like um, you know, 53 00:03:08,280 --> 00:03:11,239 Speaker 1: not a like uh like a sporting event, although I 54 00:03:11,280 --> 00:03:14,440 Speaker 1: guess it is. There's a story in the Independence saying 55 00:03:14,760 --> 00:03:17,000 Speaker 1: the guy who is the head of political betting at 56 00:03:17,080 --> 00:03:22,400 Speaker 1: lad lad Brokes, he just says people were over confident 57 00:03:22,560 --> 00:03:25,840 Speaker 1: on Ron remaining. But does this just kind of show 58 00:03:25,919 --> 00:03:31,040 Speaker 1: the the folly of relying on something like the odds 59 00:03:31,080 --> 00:03:34,360 Speaker 1: the bookies are caring to determine whatever outcome is going 60 00:03:34,440 --> 00:03:37,560 Speaker 1: to happen when it comes to America, and in the past, 61 00:03:37,960 --> 00:03:40,880 Speaker 1: the bookies have never been wrong in predicting a president. Only, 62 00:03:40,920 --> 00:03:43,920 Speaker 1: like I said, saying that like you're the host initially 63 00:03:43,960 --> 00:03:47,440 Speaker 1: said and alluded to saying that the bookies predict anything 64 00:03:47,600 --> 00:03:50,920 Speaker 1: is just in and of itself disingenuous because it doesn't happen. 65 00:03:51,280 --> 00:03:53,800 Speaker 1: The it's the who didn't, who got it so wrong, 66 00:03:54,200 --> 00:03:57,080 Speaker 1: or the betters, And I believe the unique scenario here 67 00:03:57,400 --> 00:04:01,160 Speaker 1: was there was a genuine disconnect between the people um 68 00:04:01,200 --> 00:04:05,800 Speaker 1: in Britain that actually have access to bookmakers and disposable 69 00:04:05,880 --> 00:04:08,480 Speaker 1: income to bet with bookmakers and time in their day 70 00:04:08,680 --> 00:04:10,800 Speaker 1: to talk to their friends about what they think they're 71 00:04:10,800 --> 00:04:13,400 Speaker 1: gonna bet on and then actually go down take time 72 00:04:13,440 --> 00:04:15,600 Speaker 1: out of their day to go down to the place 73 00:04:15,800 --> 00:04:19,360 Speaker 1: to make the bet. Well, those people all probably we're 74 00:04:19,480 --> 00:04:23,839 Speaker 1: going to vote remain because remaining probably helped those people 75 00:04:23,880 --> 00:04:26,159 Speaker 1: in life or didn't hurt those people as much. But 76 00:04:26,279 --> 00:04:29,400 Speaker 1: the rest of the country, who's hurting and who needs 77 00:04:29,520 --> 00:04:32,320 Speaker 1: change and who doesn't like the direction of the country 78 00:04:32,360 --> 00:04:34,920 Speaker 1: and it doesn't have the disposable income and the means 79 00:04:34,920 --> 00:04:37,520 Speaker 1: and the wherewithal in the mindset to go down and 80 00:04:37,560 --> 00:04:39,839 Speaker 1: actually place a bet with a bookmaker and take that 81 00:04:39,920 --> 00:04:42,320 Speaker 1: kind of time out of their day for a luxury 82 00:04:42,320 --> 00:04:45,039 Speaker 1: activity like that. Well, they're all the people that were 83 00:04:45,040 --> 00:04:48,800 Speaker 1: betting out and exit, and they weren't being represented in 84 00:04:48,839 --> 00:04:51,520 Speaker 1: the bookmaking vote like they normally are during the soccer 85 00:04:51,600 --> 00:04:54,000 Speaker 1: games because they didn't have time to make a bet 86 00:04:54,000 --> 00:04:57,039 Speaker 1: on political outcomes. This outcome was much more than just 87 00:04:57,120 --> 00:04:59,120 Speaker 1: a bet for them, you know, in their minds, it's 88 00:04:59,160 --> 00:05:01,880 Speaker 1: their whole life and livelihood. And I don't think for 89 00:05:01,880 --> 00:05:04,080 Speaker 1: the first time, I don't think that that vote was 90 00:05:04,120 --> 00:05:07,200 Speaker 1: represented in the betting because those people just don't have 91 00:05:07,320 --> 00:05:09,800 Speaker 1: the time to bet. Steve, you bring up an interesting 92 00:05:09,920 --> 00:05:13,040 Speaker 1: point because whether it is a sports book or in 93 00:05:13,040 --> 00:05:17,000 Speaker 1: this case, betting on a political outcome, it is the 94 00:05:17,040 --> 00:05:21,000 Speaker 1: constituency of who is actually part of the event. For example, 95 00:05:21,000 --> 00:05:23,520 Speaker 1: if you're talking about a team, you can analyze a 96 00:05:23,520 --> 00:05:26,200 Speaker 1: team from the outside, but if you are in fact 97 00:05:26,279 --> 00:05:29,039 Speaker 1: part of the electorate, and as you just described, don't 98 00:05:29,200 --> 00:05:33,919 Speaker 1: participate in the bookmaking process, it's not as if anything 99 00:05:34,000 --> 00:05:36,159 Speaker 1: is wrong. It just means that you don't have a 100 00:05:36,240 --> 00:05:40,760 Speaker 1: really decent and coherent sample. Is that accurate? That's exactly correct. 101 00:05:40,800 --> 00:05:45,240 Speaker 1: That is exactly correct. In this case, the people that 102 00:05:45,279 --> 00:05:50,320 Speaker 1: were betting, we were disproportionately represented. So can you apply 103 00:05:50,400 --> 00:05:52,719 Speaker 1: that to other things? So, for example, if you're betting 104 00:05:52,760 --> 00:05:55,200 Speaker 1: on other types of events, or indeed on the other 105 00:05:55,240 --> 00:05:57,800 Speaker 1: types of sports events, you don't want to really know 106 00:05:57,960 --> 00:05:59,760 Speaker 1: about the event. You want to know about the other 107 00:06:00,160 --> 00:06:02,600 Speaker 1: who are betting and participate. That's exactly correct. And that's 108 00:06:02,640 --> 00:06:05,240 Speaker 1: the difference between what we call in our business knowing 109 00:06:05,400 --> 00:06:08,680 Speaker 1: sharp money versus sucker money. And by the way, sucker 110 00:06:08,760 --> 00:06:12,080 Speaker 1: is a derogatory term. That doesn't really mean something so derogatory. 111 00:06:12,080 --> 00:06:15,680 Speaker 1: It just means that somebody is behind the bookmaker on 112 00:06:15,720 --> 00:06:18,719 Speaker 1: the information chain. If the game moves from four to 113 00:06:18,760 --> 00:06:21,840 Speaker 1: four and a half, the bookmaker knows it before the customer. 114 00:06:21,839 --> 00:06:24,520 Speaker 1: If the customer knows it before the bookmaker, he's a 115 00:06:24,560 --> 00:06:27,640 Speaker 1: wise guy. He's not a he's a he's a sharpie. 116 00:06:27,640 --> 00:06:29,919 Speaker 1: He's not a sucker. If he knows it after the bookmaker, 117 00:06:29,960 --> 00:06:33,320 Speaker 1: he's a sucker, meaning that he's a retail customer versus 118 00:06:33,320 --> 00:06:36,000 Speaker 1: a wholet sale customer. You know, if here, but if 119 00:06:36,160 --> 00:06:37,920 Speaker 1: very would have been great for people to hear this 120 00:06:37,960 --> 00:06:40,200 Speaker 1: conversation before the vote, because it seems to me the 121 00:06:40,240 --> 00:06:42,640 Speaker 1: logical conclusion is if you'd realize that there's a very 122 00:06:42,680 --> 00:06:46,000 Speaker 1: limited pool of people who might be voting to leave, 123 00:06:46,080 --> 00:06:48,760 Speaker 1: who are betting, you could have made money saying Aha, 124 00:06:49,400 --> 00:06:52,279 Speaker 1: that's not a great gauge. I'm going to take those 125 00:06:52,320 --> 00:06:54,480 Speaker 1: odds right and vote to leave. I could have made 126 00:06:54,480 --> 00:06:56,360 Speaker 1: a lot of money. Well, let me tell you something. 127 00:06:56,400 --> 00:06:59,960 Speaker 1: As an analyst who makes his money analyzing games before 128 00:07:00,040 --> 00:07:02,479 Speaker 1: the game start, I can tell you it is so 129 00:07:02,560 --> 00:07:05,359 Speaker 1: much easier to analyze something after it's happened than before 130 00:07:05,360 --> 00:07:08,320 Speaker 1: it starts. So in this case we get the luxury 131 00:07:08,360 --> 00:07:11,240 Speaker 1: of seeing the cause and effect and then going and saying, Wow, 132 00:07:11,320 --> 00:07:13,520 Speaker 1: why did this happen? And that's always a lot easier 133 00:07:13,520 --> 00:07:15,559 Speaker 1: to figure out than trying to figure it out before 134 00:07:15,600 --> 00:07:18,000 Speaker 1: it happened. Um, and I think in this case, you know, 135 00:07:18,080 --> 00:07:21,559 Speaker 1: it's shocked everybody that you know that it was so wrong, 136 00:07:21,600 --> 00:07:23,920 Speaker 1: and searching for that answer, we figured out that hey, 137 00:07:23,920 --> 00:07:26,920 Speaker 1: wait a second, these people that are voting exit, they're 138 00:07:26,920 --> 00:07:30,400 Speaker 1: not being represented in this book making call. Steve Booton, 139 00:07:30,400 --> 00:07:32,320 Speaker 1: thank you so very much. We'll look forward to talking 140 00:07:32,320 --> 00:07:35,000 Speaker 1: to you again as the presidential racing United States heats up. 141 00:07:35,040 --> 00:07:38,400 Speaker 1: The CEO picnation dot Com joining us from Miami Beach. 142 00:07:38,720 --> 00:07:47,160 Speaker 1: This is taking Stock on Bloomberg Radio. Coming up on 143 00:07:47,320 --> 00:07:50,560 Speaker 1: taking Stock, we're going to take stock of oil and 144 00:07:50,880 --> 00:07:54,560 Speaker 1: energy with fuddel Gate, Managing director, oil and gas analysts 145 00:07:54,600 --> 00:07:58,280 Speaker 1: for Oppenheimer and Company. You're listening to taking Stock on 146 00:07:58,320 --> 00:07:59,119 Speaker 1: Bloomberg Radio.