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birb_cromble  3d ago (text post)   463 thread views

Weekly Finance Thread - 2027-07-04

A weekly thread to discuss financial matters - from personal all the way up to global.

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Is making consistent money on Kalshi/polymarket plausible for mottizens? I'm up about 40% on Kalshi/polymarket after 9 worldcup games and I want to know if I can make this a decent side hustle or if I'm going to lose all my money and be made fun of for thinking I could gamble in income. After worldcup will it work on other sports? What about crypto?

The betting market on top tier Soccer games is very very very efficient. The sheer liquidity sunk into Kalshi/Polymarket has provided some EV spots this tournament where weight of public money has adjusted things past expectations, but if you're actively taking prices on Soccer based on your own opinions and not arbitrage you are probably gonna blow up in the medium-term at the latest.

I'm profitable on top tier soccer betting over a decade or so. Only slightly though. But around +25% ROI during this world cup. The trick is to just do nothing in all the cases where you don't have your edge.

How is the volatility and total return compared to just investing it in some broad market fund like VT? Is it worth the effort, or is this more of a "hobby that makes money" thing?

Not an investment at all. It's just for fun + testing my instincts. It adds some spice to the games I watch. Sometimes you just 'know', if you've watched the team(s) many times. It has some transfer value to stock picking. There are never any 100% things there either, but the edge in either field consists of identifying when there's a higher chance of A happening than B. And trusting yourself enough to follow that signal by placing enough money on it. In sports betting you can use an implied odds calculator to see whether the probability implied by the odds is higher or lower than the probability you think you've identified. Positive expected value = green light.

This world cup has been pretty brutal for bookmakers with lots of high-profile favorite wins + highest profile player scores goals kinda outcomes. Potentially you've found an edge but having had relationships with some of the biggest dick syndicates in the world who are scraping out 1-2% over time with immense swings I'd probably lean that you're lucky moreso than good.

Did you read the part where I said a decade?

No, he's FUDing. I think it's in good faith, but based on an idle belief in faulty neoclassical economic dogma. The Efficiency concept assumes the blank slate. It says the median market trader has all available information, but it does not say if they use that information correctly. Likewise, the way he uses the word edge assumes insider trading, a secret information source, but with uniformly obvious analysis of that information. So in other words trader quality doesn't vary, just sources of external information. Obviously this is wrong per HBD.

My intuition is that, for a long time in politics, I have beat the market not with secret information, but superior analysis skills. But in politics there is no competition like Hanson wants allowed, so you just get ignored with superior ideas. In theory, though, these superior analysis skills should transfer to trading, including sports odds, because not only is it better than the median sports fan, it's also better than the vast majority of Ivy league grads and Jane street traders (median IQ 120), who are picked not for skill but for the willingness to cheat and lie and grind. Most of their edge in other markets comes from cheating (buying secret data) and grinding (trading all the time and trading with more capital than they deserve, because it was handed to them). My analysis should be superior to them in a live sports game where they can't pull these dirty tricks. And it seems to be. I made 16% yesterday, main reason it wasn't more is the Mexico game had weird stuff happen, I believe their behavior at the end of the second half was low probability and I lost on that.

Equity markets are positive sum. Sports markets are negative sum. The Kalshi markets are being pushed off fairs against 'public' teams a bit due to weight of retard money but if I check back again in 1000 bets you will have lost your ass most likely in whatever strategy you think you've found.

Most Jane Street traders aren’t cheating or doing anything interesting. They’re exploiting tiny quirks in foreign derivatives markets or the repo market / basis trade or creating ever more complex ways to eke out margin when ETFs rebalance all with huge leverage so that 1bp becomes a moderately large figure.

There are definitely still hedge fund types who engage in the traditional shadier kind of business, but they’re not quants, they’re big global/regional macro or sector/theme funds run by guys in their sixties whose claim to fame was correctly calling one big crash in the last 35 years.

Yeah most macro guys have one or two big bets that work out and otherwise get their asses beat over time. Market making is just a gigantic ticket clipping operation which is why it's relatively sustainable and scales well

It’s a ticket clipping operation but in certain cases with insane leverage which in a real crisis where crazy things happen for short periods in the repo market (like they did in 2008) could blow up in an interesting way.

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Most Jane Street traders aren’t cheating or doing anything interesting. They’re exploiting tiny quirks in foreign derivatives markets or the repo market / basis trade or creating ever more complex ways to eke out margin when ETFs rebalance all with huge leverage so that 1bp becomes a moderately large figure.

That's cheating if a 140 IQ person can't do it from home. The world exists for smart individuals, not grinding ekers.

I mean 140 IQ guys are setting the parameters then it's a combination of top tier bots, accumulated subject matter expertise and negotiating super low fees in exchange for super high turnover.

How many bets is that? Thousands? The same edge has held through massive swings in how odds are calculated in that period?

In any market, consistent excess returns are the product of superior information, superior analysis, or both. So whatever you’re betting on, do you earnestly believe you have either?

I think probably I have near the maximum amount of information since insider trading is implausible unless the game is rigged, and I have superior than median analysis since I am more intelligent than most people trading the market.

Please pursue responsible gambling tools available to you prior to wrecking yourself.

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