Idol Bets

In an event that surprised none, David Cook won the 2008 American Idol competition. While IdolBets.com does not care one bit about his future career, so don’t expect to hear much about him from here on out.
We have been touting David Cooks shares since the inception of this site (and many weeks prior to this site going online). For our SimPicks, we had purchased 8 shares of him. Since we also bough shares of other contestants, we missed out on some profit but it’s all part of a hedging strategy. Overall, I suggested $398 worth of investments that netted $800. A solid 101% return on investment (ROI). Not bad in a bear market. Of course, you could have invested more or less depending on how much you wanted to throw around.

Since the work on this site is done for the season, we’ll be shifting our attention to more strategy-based posts. I may even post a premium e-book on how to bet this show. If you have a pretty good ear for talent, don’t get caught up in people, and are generally disconnected from the show, it’s not that difficult to make a killing. I want to get into some slightly more advanced betting strategies and get more into live betting to really take advantage of volatile prices. The season-finale was a great indicator of how volatile things can get towards the end. With 2 clear-cut finalists this year there wasn’t quite the shifts there could have been in round of three and four so hopefully I can get into more detail there during the “off-season”.

My next post is going to be a basic “How To” explaining signing up, getting money into your account, understanding the long-term World Sports Exchange markets and how to get involved in them. It’s pretty easy but there are a few things you should know going in.

So the Idol Finals are over and the only thing left to hear is who won.  An interesting thing happened last night in the Idols market and is definitely worth noting (I plan on writing some strategy articles here during the “offseason” that will go more in-depth on market strategies) and that is how the markets react during and right after a show.  There was a massive drop in David Cook’s stock value last night immediately following the show.

By most accounts Archuleta performed better than Cook so it’s a natural assumption to get rid of your Cook shares ASAP.  Well in doing so, people dropped the sell value of his stock from 66 to 25.  That’s a massive fall and would have been a great time to purchase some Cook shares if you actually understood how the results would turn out.  I said several weeks ago that Cook was a shoe-in.  I initially had my doubts, the biggest of which is that Archuleta would outperform him during the finals (which he did) but I later said that it wouldn’t matter.  Archuleta dug himself into such a giant hole that he never recovered from.  It really wasn’t his fault but his ridiculous personality and lack of legitimate emotion and connection with his songs doomed him.  He would need 3 more nights like last night to make up the margin Cook had built.

Because of that, I never suggested hedging your Cook shares with Archuleta shares.  It made SOME sense do hedge with Syesha shares two weeks ago, just in case but there is a big difference between hedging with $4 shares and hedging with $30 shares.  I was confident enough in Cook’s chances not to suggest even selling any of his shares.  That MAY be something you’d want to look into to reduce some of your risk but at this point, Cook looks like the winner.

In case you don’t know, DialIdol is predicting Cook to be the winner and it’s by a large enough margin to be statistically accurate and outside the margin of error.  That information is very strong and telling and should be accurate.  Unless DialIdol has decided to throw it’s credibility out the window and take advantage of the betting markets by providing false data, then Cook shares should be worth $100 at the end of tonight.  DialIdol is a pretty big reason why the Cook shares recovered nearly all of their lost value today, that and the ridiculously low price they were selling for last night.

The American Idol market has spoken.

David Cook is now a huge favorite in the eyes of the WSEX American Idol market investors.  This season has been interesting.  Cook should have been a favorite from the first or second week once the top 24 started.  Instead, Archuleta was a MASSIVE favorite, buying around 55 or so from what I can recall.  That early in the season it can be very hard to predict who is going to run deep and Archuleta was an extremely safe bet to go far.  However, he was never a great favorite to win in my eyes.  Pretty much everything I thought of back then that would prevent him from winning came out from then until now:  his annoying personality, lack of versatility, lack of taste, etc.  Meanwhile, Cook was rated pretty low back then and it was pretty obvious (to me at least) that he was going to be a goldmine in the markets.  He crept up from 3, to 7, to 11, to 20, to 30, to 40, and got up around 57 last week.  After a solid performance last night where he sang three songs well, with one of them being a bit outside his comfort zone, he’s now ballooned up to 71-76.

A lot of this market surge has to do with the past two weeks’ DialIdol numbers.  Cook has been the clear leader two weeks in a row.  It’s safe to assume the market thinks he’ll have a strong showing in the finals.   A few weeks ago I mentioned that Cook could struggle in the finals the same way Blake Lewis did last year.  I actually don’t think that’s going to happen.  Cook doesn’t have the same downfalls that Lewis had.  Lewis didn’t have a particularly strong voice and needs to have the right type of song to sound good.  I don’t think Cook has those problems.

I’m actually going to suggest picking up a couple shares of Syesha in the SimPicks.  Although DialIdol has her going home, she made up some ground last week and Archuleta really sucked last night.  Her shares can be purchased for $2, so pick up 8 of the for $16 and hope she can make in through.  It’s a small amount of money to invest and if she somehow beats the odds and passes up Archuleta tonight, SimPicks guarantee s a final value of $800 with the 8 shares of Cook and 8 shares of Syesha.

So Tuesday’s round of seven is over as is Wednesday’s elimination show. No real surprises except that Jason Castro didn’t make the bottom three. As predicted on Monday, Castro wasn’t very good but lucky for him neither was Brooke. Syesha and Kristy rounded out the bottom three. Despite decent performances from them (at least by their standards), nobody likes them. At this point, your entire body of work starts being accounted for more and neither of them have ever been truly impressive.

David vs. David

The markets didn’t take kindly to anyone’s performance except David Cook. His spread shifted up seven points while all other idols moved down. DialIdol estimated David Cook to be at the top of Tuesday’s voting, overpowering David Archuleta. I had Cook at a minimum of $35 if he makes the top 2 but I think that’s going to edge up towards at least $45 - so he’s still a strong buy candidate at $35 right now. Archuleta’s one-trick show has been annoying me since day one. However, he’s still extremely popular and only seems to slip into second when Cook has a monster week. We’ll see how the finals go. One major issue with the Idol finals is that they have to perform some God-awful inspirational shitfest. Last year, they opened up the songwriting for the Idol finals/first-single to all songwriters as a contest. The winning entry managed to pen something as equally trite as the pros’ of years before. This year will likely be the same. For Cook, that could mean a solid #2 as Archuleta’s entire style is hand-picked for hot, sappy garbage.

Which brings us to an interesting point with the markets. At this point, it’s a two man race. The only Idol even capable of keeping up with the David’s is Carly and she is completely incapable of performing or gaining an audience. The smartest moves are to continue to buy Cook and try and figure out who’s going to be number three…and at number three you need to figure out what they’re going to be worth with little realistic chance of winning.

Blue Chips:
David Archuleta, David Cook

Mid-Caps
Jason Castro, Carly Smithson

Penny Stocks
Syesha Mercado, Brooke White

No action is really needed right now. I’ll make my SimPicks on Monday or Tuesday.

I’m going to set this up like I have $700 to spend this season. I’m blocking off $200 to spend this week. Here are my picks:

Seven Idol Week Transactions

BUY: David Cook: 4 contracts @ $28 each. Total: $112

BUY: Jason Castro: 6 contracts @ $7 each. Total: $42

BUY: Brooke White: 5 contracts @ $5 each. Total: $25

BUY: Carly Smithson: 4 contracts @ $4 each. Total: $20

Total purchases: $199

Current Portfolio Value

Money Not Invested: $501

Money Invested: $149

Current Holdings:

Starting Value: $700

Current Value: $649

Net Gains: -$50 (-0.077%)

Closing Comments

The loss right now is due entirely to the spread (the fact that you can’t immediately sell for what you bought at). We’ll see how this progresses after tonight and tomorrow night. I’ll update tomorrow to see if anything is worth buying or selling as well as Thursday

Enjoy the show.

Mariah Carey week. Should make for some very interesting play outside the top 2. The girls (especially Carly) could end up with some strong performances if they play their cards right. Castro could struggle. Here is the run down:

BLUE CHIPS

David Archuleta

Archuleta remains at the top of the market with a strong 57-62 spread. The market clearly thinks he’s the favorite, but he’s not bulletproof. His personality is grating and his repertoire limited. Not much else needs to be said at this point. Archuleta is a HOLD.

David Cook

This year’s “dark horse” slipped up bad last week but steered clear of the bottom three again - a VERY good sign for him. His prices continue to rise, as Cook is now sitting on a 23-28 spread. Hopefully you got in weeks ago when he was buying at $3 or $6. I think Cook has a strong chance at being no less than a 35% favorite to win if he makes the top two (and likely a 40-45% favorite), so he’s still a STRONG BUY candidate.

MID CAPS

Jason Castro

A story/photo popped up today about Jason Castro: “Jason Castro May Smoke Weed”

I know, alarming. Jason Castro may smoke weed in the same way that the Yankees may play baseball or that Paula Abdul may spend 50% of her life barbiturated.

Jason is sitting on a 5-7 spread today, placing him at number three in the market but not even close to #2. Jason has strong top 3 potential. The #3 contestant will be interesting this year. With Archuleta and David Cook maintaining a stronghold on the top 2 and with Kristy Lee and Syesha as lame ducks, it’s a three way race for 2nd runner up. Castro is unique enough to distinguish himself from the others and talented enough to deserve to be there. At $7 / contract, Castro is still a decent buy candidate with a potential target spread of 12-15.

Mariah Carey Factor : Castro could slip up this week pushing his stock down a bit. He should be safe and make a nice recovery next week. You’re probably best of buying a little at $7 and seeing how tomorrow night pans out, he could be a bargain on Wednesday.

Brook White

She’s only been in the bottom three once, and it was at number 3. She could find herself in danger this week as Carly could put forth a huge performance. At at 3-5 spread, she’s a buy. It’s risky enough not to put a ton of weight in but small enough that it could triple if she chugs on to the top 3.

Carly Smithson

The good news: All the cards are in place for a showcase week. The bad news: People don’t like her. She could warm her way into the voters hearts with a powerhouse performance this week. Her voice is strong enough and the theme provides a lot of vocal showcases. Like Brooke, she’s also at a 3-5 spread today. She’s still a buy because she could jump up a bit this week and still has top 3 potential

PENNY STOCKS

Syesha Mercado

A 1-3 spread this week. Even with a strong week, I don’t think she can push much past that $3 buy mark. Her $1 sell would need to push up $3 to make this an attractive buy and that just isn’t likely to happen. She tried to tackle a big song when she sang that Whitney Houston song and came up average. I could see the same thing happening here. Like most of the time with “penny idols”, she’s really not worth selling or buying. Hold on if you have contracts, ignore if you don’t.

Kristy Lee Cook

She’s like herpes. You don’t want to get it and you can’t get rid of it once you do. She’s most likely gone this week anyway. Don’t buy.

Rundown Of The Spreads

Bottom Three Predictions

#3 - Jason Castro

#2 - Syesha Mercado

#1 - Kristy Lee Cook