2017 French Presidential Election SMI-leader Macron takes the Betting Market lead
Today is the first day that Emmanuel Macron has taken the lead in the betting markets for the 2017 French Presidential Election. This highly unlikely scenario was forecast using the Social Media Influence (SMI) index in early December, which stated that the then-third place Macron would ‘surge’ and eventually win the election. Such a scenario was seen as incredibly unlikely just a few months ago when our forecast was made but today appears to be the most plausible.
PredictWise, a site that calculates probabilities of an event occurring such as a politician winning an election, had the chances of Macron winning at only 10% on December 2, 2016. At the time, the betting market leader, Fillon, was at 58%. Fillon was mostly seen by the media and betting markets as a sure thing with many articles declaring that he was the likely next president and discussing how France would change under his presidency.
As of today, PredictWise has Macron in the lead at 39% (from 10% in December) and Fillon at 38% (from 58%). This turn is drastic to say the least. The race has gone from an after-thought to one which could be won by Macron, a relative political novice who most were extremely reluctant to support less than two months ago. Betting markets and professionals have been upended by Macron’s surge, but not the SMI which correctly forecasted such a surge (more on that later).
Likewise, PredictIt, a real money betting site, currently quotes Macron ‘shares’ at 37 cents versus Fillon at 30 cents (with Le Pen trading at 31 cents). On December 2, 2016, Macron was trading at 6 cents and Fillon at 68 cents (with Le Pen at 36 cents).
Odds-makers, betting markets, political observers and professional mathematicians all informed us two months ago that Fillon was essentially the next president of France and that Macron really should be seen as just filling space. This might sound exaggerated but recall that shares of Macron were trading at approximately 1/11th or 9% of those of Fillon at that time. With voting for the first round in April, such a tremendous relative lead certainly appeared unsurmountable.
At that time, the SMI told us that the true front-runner was Macron. His influence on social media was higher than any other potential candidate, even if the betting markets and polls did not reflect this reality. Furthermore, Fillon’s SMI was fairly mediocre and in-line with many of his competitors which certainly did not bode well for the individual who was billed as being so far ahead by the pundits.
In our December post, the comparison between betting markets and SMI led us to forecast that over the following two months (which we are about to complete) Macron would ‘surge’ and Fillon would ‘fall dramatically’. Judging from the abrupt adjustments in the betting markets, this has come about slightly ahead of schedule – a truly amazing feat given the out-of-consensus nature of the forecast at the time.
The 2017 French Presidential Election appears to be proving our thesis that social media influence leads betting markets, polls, and political pundits. This is a true game changer on a number of levels. For forecasting, it will rewrite much of the standard understanding of best practices. For politics, it squarely returns the nexus of politics to the general populace and takes it from the professionals.
If this was a one-off out-of-consensus correct forecast, perhaps you could chalk it up to luck or some extreme coincidence of events that helped Macron and hurt Fillon. However, this is not the first such out-of-consensus forecast that the SMI has gotten correct.
In 2015, over a year before the 2016 US Presidential Election, the SMI identified Donald Trump as the dominant force on the Republican side and Bernie Sanders as having enough social media influence to give Hillary Clinton a real run on the Democratic side. These calls were seen as bordering on absurd at the time. Those who follow political commentary will recall just how ridiculous Trump and Sanders were seen by political pundits and odds-makers in 2015.
Then, after the primaries, the SMI forecasted Trump would defeat Clinton in the general election with Trump winning 306 electoral votes. At the time, such a forecast was again seen as absurd as betting markets and forecasters placed Clinton’s chances of victory from around 70% to 99% throughout the general election process, even up to election-day. It turned out that Trump won with 306 electoral votes, as the SMI forecasted.
Generally, the 2016 US Presidential Election has been seen as a repudiation of traditional political analysis as most every pundit and forecaster got it terribly wrong. In contrast, the SMI did an exceptional job even under such a difficult scenario.
For the 2017 French Presidential Election, the SMI forecasts that Emmanuel Macron will win the election. Its initial forecast for a Macron victory was made with Macron’s shares trading on betting markets at 6 cents (a distant third place). Since that time, these same shares have within two months surged to 37 cents (giving him a slight lead). The SMI continues to point to Macron as winning the election.
It seems like a similar pattern is emerging in France as played out in the US:
- Pundits, betting markets and mathematicians strongly back one candidate near the beginning of the election process and declare that candidate to be all-but-elected,
- SMI forecasts victory for a seemingly low probability (according to the betting markets not social media) candidate near the beginning of the election process,
- SMI’s forecast is clearly at odds with traditional analysis from the beginning as they identify different candidates as being likely winners, and
- Betting markets tend to follow SMI forecasts making SMI the leading indicator.
It should be noted that the forecasting environment has been extremely difficult over the last few years. It should come as no surprise that traditional pundits have had a difficult time making forecasts. However, it should also be highlighted that the SMI has done extremely well in such unusual circumstances.
France’s first round of voting will not take place until April. So, there is still plenty of time for things to change. The SMI could still invert and see Macron decline, though this is not likely. The point being that our forecasts based on SMI could still change over the coming months. That said, our December forecast has proven amazingly accurate in that it stated that a clear underdog, Macron, would ‘surge’ and the clear front-runner, Fillon, would ‘fall dramatically’. Furthermore, the forecast gave a time period – ‘over the next two months’. The December forecast therefore has come about in an exceptional manner.
Looking forward, the SMI continues to point to Macron winning the election in a rather dominant fashion.
