Five Reasons the Prediction Market Critics Are Wrong.

New PM post excerpt below. Read the full post at Midasoracle

1. It really was an upset – As it has been pointed out elsewhere, the Clinton victory was a surprise to everyone....

2. Pundits/Critics are NOT traders...

3. PMs are not polls – This common mistake is exemplified by this quote from the Chicago Tribune, “The New Hampshire primary was a reminder that prediction markets, where bettors are putting money on the line, can have no more value than opinion polls, where participation costs nothing.” This critic missed the point and doesn’t realize he is comparing apples and oranges....

4. Regulations have hurt the accuracy and liquidity of PMs – The inconvenience of opening a trading account at Intrade has excluded many Americans from participating....

5. “Serious people who study or work with these markets are not in the ‘markets are magic’ camp” – Prediction markets are like other financial markets: fat tails, black swans, bubbles, “manipulations” etc. ...