And even if it is good enough, once you're shelling out thousands of dollars a year in research costs, does that give you any remaining alpha?
This is exactly what I feel about a lot of the paid investment advice out there. Compounding can make any decent alpha worth a ton, to the point that these people would be investment bankers and not advisors if they knew what they were talking about.
That's precisely why you would want to make a startup to get investment now rather than self-fund and bootstrap. That alpha isn't going to last forever, especially because everyone has access to the frontier LLMs, which keep getting better, and will eventually beat your fancy harness or specialized finetune.
And also, perhaps more importantly, so you can start developing an alternative to prediction markets and become the new PM; as Scott notes, with superforecaster AI, it's unclear why you really need Kalshi or Manifold or anyone else, with all their fees and overhead. Leave them to the degens, and carve off the socially useful part to do much more efficiently - tokens are cheaper than transactions! This is the big prize, but you need to start now before someone else does it better or commoditizes it.
Ok… assuming you can’t use that $2mil for some reason, simply take out a $10k line of credit and you’ll have $571 million in 7 months.
If you have the 2mil, congrats you’re 7 months away from $114B - you’re now one of the top 20 richest people in the world.
If this was truely the money printing machine they are saying it is, they would not be talking about it.
2. The alpha dries up with more players, even in the year or whatever since that founder started.
I asked the guy who turned $35 into $2 million in seven months on Kalshi whether, in another seven months, he would be able to 100,000x his money a second time to $200 billion. Unsurprisingly, he said no - there’s only so much easy money on Kalshi, and his AI had already taken it all (also, other people with similar AIs are starting to fight him for it!)A particular trade that can 2x $20k won't be able to do the same for $20 billion.
It's why RenTech capped their Medallion Fund and closed it to outside investment.
If there's only a billion dollars sloshing around on Kalshi, you can't expect to put $1 trillion into bets and take $2 trillion out.
This doesn't pass the smell test.
That said, the very concept of selling such information means that it would eliminate any edge and become zero profit anyway.
Futures are the only thing for me this has never happened on. However no retail broker I'm aware of allows trading futures though API.
Perhaps they may enforce a knowledge cut-off for information retrieval and price the service based on how recent the cut-off is, and also use the cut-off as a way to guard their advantage on the markets.
For example, your customer might really care a lot about some niche prediction like the number of car break-ins in Walmart parking lots. In practice you won’t have sufficient liquidity in a prediction market to actually profit off of that prediction. But a security company might really want to know the answer to it.
(This is one of the more interesting questions that came out of Alex Karp’s televised borderline psychotic break rant the other day and it has stuck in my mind even though he is clearly unstable)