Say 70% of the time it resolves to ‘no’, you still don’t make money by blindly choosing ‘no’.
Guess why?
Hint: This strategy is also described with the macabre analogy: picking up pennies in front of a steamroller.
Do you want to pick up pennies in front of a steamroller?
This or any other statistical play is only 'in front of a steamroller' if you do it with leverage, especially if notionally uncorollated bets suddenly move together. Bets on Polymarket have limited downside by design, and bets in different categories are obviously unrelated to each other.
Without having looked into this in detail, however, I suspect the problem would be limited capacity; markets that are both deep and so trivially irrational are probably fairly infrequent. You might pick up pennies but only pennies.
It’s the 90% chance of making 1$ vs 10% chance of losing 100$.
The exact numbers vary, the expectations even out with high volume stocks but prediction markets do not because of rounding that favors the house.
Though I agree it's bad math, even if 70% resolve to no, there's a high variance among all of them, and to know whether it's a good bet or not... you have to do your DD on that particular market. Even if you follow the Kelly criterion, randomly choosing bets will probably tank your bankroll sooner or later.
No, all these variables cancel out.
If you were picking and choosing, yes. But this approach is basically betting no on all the markets.
The textbook explanation of this is the central limit theorem, proving this mathematically is a bit more involved for power-law systems like this but it’s empirically valid.
My point is equally valid for "markets consistently value 'yes' too highly".
The occasional 'no' will wipe you out on average.
But your statement seems stronger, i.e. that such a strategy is somehow fundamentally and inherently impossible, so I think it's on you to explain why that is supposedly the case.
For example, assuming a hypothetical consistent "yes" bias of 10%, would you still say it's impossible? Why? Basically, are you saying it's impossible because of the actual observed "yes" bias being too weak or for some other reason?