Winners of the Kremlin Contest

Vladimir Putin’s decision to crown himself king anew has not gone as planned. Most recently, Russia’s strongman leader has found himself for the first time commenting publicly on the general belief that he is responsible for the career of one of Russia’s richest oligarchs, a St. Petersburg man who until a few years ago was a nobody. Putin denied helping Gennady Timchenko, who runs Gunvor, the world’s third-largest oil-trading empire, and Novatek, Russia’s second-largest natural gas producer. Why is it not possible to be a self-made oilman oligarch in Russia absent Kremlin support, Putin suggests. Indeed, why not?

In any case, with the clarifying benefit of a few days, we return to the matter of the Kremlin Contest, O&G’s betting competition for the identity of Russia’s next set of rulers. President Dmitry Medvedev’s four-year term as president ends next year, with elections scheduled in March. The prevailing wisdom was that Putin would return, but was that a fait accompli? During the summer, we challenged O&G readers to bet on their beliefs.

On Saturday, Putin announced his decision (he would in fact return as president), but a bit of confusion followed when now-former Finance Minister Alexei Kudrin rejected the corollary — that not only would Putin take up residence again in the Kremlin, but Medvedev would become prime minister. It seemed that Kudrin himself expected to be named to the latter slot. But Medvedev and Putin have put the kibosh on Kudrin’s aspirations — the two will swap positions — and no one else has challenged Medvedev.

So we proceed with confirmation of Saturday’s announcement. We have dual winners of the contest. They are Theo Francis, a writer at footnoted.org, a newsletter that digs into Securities and Exchange Commission documents; and Michael Perice, a fresh political science graduate from Temple University. Both guessed that Putin and Medvedev would swap positions, and that Putin would make his announcement Dec. 8, which was the best estimate of the actual date.

In the coming days, I will personally email, tweet or Facebook the other entrants with instructions on how to mail their wagers to one of the winners. I am going to assign the booty this way: The alphabetical first half of the entries will go to Francis, and the second half to Perice, in order of their own places in the alphabet. Since I bet two objects — a glass of Rioja and a signed copy of The Oil and the Glory (the book), I will share the wine with Francis and mail Perice the book.

I myself guessed wrong — I bet that the tandem would stay in place, Medvedev as president and Putin as prime minister (with the decision on Dec. 9, the same date on which he announced in 2007). My reasoning was that everyone knew that Putin was truly in charge, so that he did not need the presidential title — in other words, the current system worked, and why mess with success? But after the smoke cleared, my wife provided the best and simplest analyses I’ve heard of what happened: "The tsar wants to be the tsar."

So how did the winners reach their conclusions? I found the methods surprising. Read on to the jump.

Francis (a former colleague at the Wall Street Journal and BusinessWeek) realized he knew squat about Russia. What he did know from his time covering companies was that, at least on Wall Street, actual knowledge — even passing knowledge — is not necessarily an advantage. Often a spirited guess is good enough. So he started with the received wisdom — that Putin and Medvedev would swap — then tackled the date. Here is what he did:

In the spirit of the old Wall Street Journal dart-board investment contest, and knowing nothing about the subject, and on the theory that a good random entry is as solid as the best punditry — at least on something as simple as the timing of an announcement — I decided to enter with a random pick. But lacking darts and a dart-board (and a paper calendar), I used Random.org’s Random Calendar Date Generator at http://www.random.org/calendar-dates/http://www.random.org/calendar-dates/. I decided to generate an odd number (nine) and pick the middle one. Here were the numbers, picked randomly out of 135 possible dates between Thursday, 1 September 2011 and Wednesday, 7 March 2012:

Sept. 13, Oct. 25, Nov. 8, Dec. 1, Dec. 8, Jan. 25, Feb. 3, Feb. 16 and March 2.

So it was Dec. 8. 

Michael Perice, who is perusing graduate schools for a master’s in history and political science, knows quite a bit about contemporary Russia. Still, he also used a random approach.

Though I’m sure there are more analytical ways to pick winners and losers in a country’s national election, I believe in the case of Russia, a flip of the coin shall suffice. Tails on the first toss has given me, President Putin with Prime Minister Medvedev. Concerning the date, the best odds would be near your date, but not exactly the same, so heads shall be Dec. 8^th, and tails will be Dec. 10^th, 2011. The outcome …. Heads! President Putin with Prime Minister Medvedev, with an announcement on December 8^th, 2011.

A few days later, Perice had further thoughts, and wrote:

Call it chance, fate, destiny, or luck, my coin gave me Putin as the next president of Russia. Yet after receiving your email in which you requested a wager, I started to seriously think about what I should bet. While waiting to watch the new Michael Bay Transformers movie, I saw a trailer for the new Tom Cruise Mission Impossible film, horribly titled Ghost Protocol. In the trailer, the Kremlin suffers from a severe terrorist attack in which Tom Cruise’s character will probably get blamed. Anyway, it got me thinking: In America we supposedly value above all else, justice. We consider ourselves a nation of laws. So I pondered, what do the Russians value above all else? In fact, what does Putin value above all else? I believe that answer to be strength. I believe as this year unfolds, Putin will want to display that strength. Maybe because he views America at a moment of weakness or maybe it’s just in his nature. My point is that [the] coin might have picked Putin as my choice, but my analytical skills (and maybe my wallet) are glad that it did.

Congratulations again to Theo and Michael.