I enjoy visiting prediction markets — Polymarket and Kalshi are two examples — every now and then. In some ways, I find these mini-markets about the future more revealing and sobering than reading or listening to 24/7 news.
I operate with an understanding that people invest into the things they know. For example: the trending market on Kalshi is “What share of the vote will the AfD get in the German election?” I know nothing about the AfD or what’s going on in Germany; however, I assume that a majority of the people who voted in that market have an idea of what they’re talking about. The market is leaning towards a 66% chance that the AfD will get 20-24.9% of the vote. That’s interesting because it invites a whole host of questions: what’s going on in Germany? Who is the AfD? What are the ramifications of them getting more or less than 20-24.9% share of the vote? What impacts might that have on me?
How about best picture at the Oscars. On Kalshi, Anora is given a 75% chance to win best picture. That market is worth 4M dollars — not an insignificant amount of money. I am now curious about “Anora.” I love movies, and haven’t made time to watch it. Maybe I’ll check it out.
Lots of hype in US news about the US acquiring Greenland. I don’t know if I have strong enough interest in that topic; however, I see the real and satirical news headlines. How much is hype and how much is real? Where are people putting their money? As of right now, 23 Feb at 4:05am Central, Kalshi shows there’s a 25% chance, and some voters have linked articles to support their votes. How much of the headline is hype and how much is real?
I am not an economist, yet I enjoy thinking about price, signals, and markets. And while markets certainly contain noisy data — a bet can be thought of as the sum of the value you place on something plus noise — it appears a lot less noisy than opinion news. Now, time to rent “Anora.”