Comments on: JFK + The passing of time + The prediction markets http://www.midasoracle.org/2009/02/20/the-passing-of-time/ Prediction Markets, etc. Thu, 02 Feb 2012 23:13:18 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Chris F. Masse http://www.midasoracle.org/2009/02/20/the-passing-of-time/#comment-23437 Chris F. Masse Sun, 22 Feb 2009 17:25:49 +0000 http://www.midasoracle.org/?p=12971#comment-23437 You obsess too much with Wall Street. Online betting is disconnected from that. You obsess too much with Wall Street. Online betting is disconnected from that.

]]> By: Jason Ruspini http://www.midasoracle.org/2009/02/20/the-passing-of-time/#comment-23434 Jason Ruspini Sun, 22 Feb 2009 17:03:53 +0000 http://www.midasoracle.org/?p=12971#comment-23434 European banks are in great shape I see, and if you meant to write "no impact whatsoever", that is just denial. European banks are in great shape I see, and if you meant to write “no impact whatsoever”, that is just denial.

]]> By: Chris F. Masse http://www.midasoracle.org/2009/02/20/the-passing-of-time/#comment-23426 Chris F. Masse Sat, 21 Feb 2009 20:29:06 +0000 http://www.midasoracle.org/?p=12971#comment-23426 "The failure of the financial system" The failure of the US BANKING system has impact whatsoever on how prediction markets are viewed. Same for the excess of the world of derivatives. There is less interest in prediction markets because their 2008 edition didn't nail "all 50 states" ---as the hype went after the 2004 election. -- That said, the rest of your comment is interesting. “The failure of the financial system”

The failure of the US BANKING system has impact whatsoever on how prediction markets are viewed. Same for the excess of the world of derivatives.

There is less interest in prediction markets because their 2008 edition didn’t nail “all 50 states” —as the hype went after the 2004 election.

–

That said, the rest of your comment is interesting.

]]> By: Jason Ruspini http://www.midasoracle.org/2009/02/20/the-passing-of-time/#comment-23424 Jason Ruspini Sat, 21 Feb 2009 19:00:26 +0000 http://www.midasoracle.org/?p=12971#comment-23424 The failure of the financial system does make it extremely difficult for prediction markets to be taken seriously. The EPM companies have to be de-stressing the market metaphor at this point, right? But with some care, a lot of market pathologies and be avoided or mitigated. It is easier for markets to go crazy when pricing perpetuities like stocks. (Not to mention opaque markets that are never priced, only to explode at some point.) Leaving aside capitalization, if you want predict earnings, futures with defined maturities would be less susceptible to that sort of thing. (Although a lot of care needs to be taken with the contract definition.) Comparing these EPS futures to stocks would be interesting too as they could help separate stock price changes due to earnings expectations and changes due to what multiple the market is willing to pay or other structural factors. The failure of the financial system does make it extremely difficult for prediction markets to be taken seriously. The EPM companies have to be de-stressing the market metaphor at this point, right?

But with some care, a lot of market pathologies and be avoided or mitigated. It is easier for markets to go crazy when pricing perpetuities like stocks. (Not to mention opaque markets that are never priced, only to explode at some point.) Leaving aside capitalization, if you want predict earnings, futures with defined maturities would be less susceptible to that sort of thing. (Although a lot of care needs to be taken with the contract definition.) Comparing these EPS futures to stocks would be interesting too as they could help separate stock price changes due to earnings expectations and changes due to what multiple the market is willing to pay or other structural factors.

]]> By: Chris F. Masse http://www.midasoracle.org/2009/02/20/the-passing-of-time/#comment-23422 Chris F. Masse Sat, 21 Feb 2009 15:27:43 +0000 http://www.midasoracle.org/?p=12971#comment-23422 Your comment is pertinent and funny, but it is not the appropriate criticism to my post, because when I say, "It didn't pan out", "it" does not refer to omniscience. Omniscience is not what was promised, and is not I was talking about. I was talking about the rise of PMs and EPMs as forecasting tools. It didn't pan out. Very few media and corporations take PMs seriously. Your comment is pertinent and funny, but it is not the appropriate criticism to my post, because when I say, “It didn’t pan out”, “it” does not refer to omniscience. Omniscience is not what was promised, and is not I was talking about. I was talking about the rise of PMs and EPMs as forecasting tools. It didn’t pan out. Very few media and corporations take PMs seriously.

]]> By: behind-the-enemy-lines.blogspot.com/ http://www.midasoracle.org/2009/02/20/the-passing-of-time/#comment-23418 behind-the-enemy-lines.blogspot.com/ Sat, 21 Feb 2009 07:36:06 +0000 http://www.midasoracle.org/?p=12971#comment-23418 In 2009, the reality check is that it didn’t pan out. The public stock markets are far from being “impressive”, and no success story has ever been published about them. They cannot predict the future performance of a company. In fact, if you observe the analysts (the best and most reliable of them), you do not need markets to understand how good a public company is. The analysts tell you. Markets failed to predict the failure of the financial system. Heck, they did not even predict 9/11, despite the trillions of dollars being exchanged every day! So much for "markets incorporate all available information"! They just *react* to events! They cannot predict them! We need to reset and reboot the field of the markets in general! In 2009, the reality check is that it didn’t pan out. The public stock markets are far from being “impressive”, and no success story has ever been published about them. They cannot predict the future performance of a company. In fact, if you observe the analysts (the best and most reliable of them), you do not need markets to understand how good a public company is. The analysts tell you. Markets failed to predict the failure of the financial system. Heck, they did not even predict 9/11, despite the trillions of dollars being exchanged every day! So much for “markets incorporate all available information”! They just *react* to events! They cannot predict them!

We need to reset and reboot the field of the markets in general!

]]>