Remember Danny Moses? He’s one of the guys who made bank betting against the housing market before it all went to hell in 2008. You know, the whole “Big Short” thing that made Christian Bale look really smart in a movie.
Well, Danny’s back with some advice that sounds absolutely bonkers at first: you should be paying attention to prediction markets. Yeah, those places where people bet on everything from who’s gonna win the Super Bowl to whether a cute plastic toy called Labubu will hit certain price targets. I’m not kidding about that last one.
But here’s the thing – Moses isn’t suggesting you blow your retirement fund on whether it’ll rain in Toledo next Tuesday. He’s saying these betting platforms have become surprisingly useful tools for actual investors who want to stay ahead of the game.
“I think it’s great to scan through all the prediction markets out there, certainly economics and business-related, because it actually will get you thinking about things you might have been missing,” Moses told Business Insider.
Think about it like this: these markets are basically crowdsourced crystal balls. When thousands of people put real money behind their predictions, you get some pretty interesting insights into what might actually happen.
Take SoFi, that fintech darling that’s been on a tear lately (up 93% in the past year, if you’re keeping score). Prediction markets are currently giving it a 38% chance of getting added to the S&P 500 this year. If you’re betting against SoFi and didn’t know that was even a possibility, well… that’s the kind of blindside that can really mess up your day.
Moses points out that getting added to the S&P 500 is like getting invited to the cool kids’ table – it usually means your stock price goes up because all those index funds suddenly have to buy you. Just ask Carvana, which got the golden ticket recently.
But it gets even more interesting. Sometimes these prediction markets might offer better odds than traditional options trading. Moses gives the example of betting whether Bitcoin will drop below $70,000 in Q1. If the prediction market is offering 8-to-1 odds on that happening, it might be a cheaper way to hedge your crypto position than buying put options.
The really wild part? Moses thinks we’re just getting started. As more institutional investors start using these platforms (because apparently even the suits are getting into the betting game), we’re going to see way more activity and probably better predictions.
So while your grandmother might not understand why people are betting on the price of cartoon collectibles, there’s actually some serious financial intelligence hiding in all that chaos. The key is knowing which bets to pay attention to and which ones are just people having fun with their lunch money.
Bottom line: in a world where information moves at light speed and markets can flip faster than a politician’s position on tax policy, maybe it’s worth checking what the crowd thinks is going to happen next. Just don’t bet the farm on it.