Can You See The Future?

The legendary hall of fame catcher, Yogi Berra, made famous the following quote from Danish Nobel laureate, Niels Bohr, "it's tough to make predictions, especially about the future."  

Little did Mr. Berra know that Wall St would build a business on this quote. What I am referring to is one of the newest crazes now appearing on Wall St, The Prediction Markets. For those of you who don't know what I'm speaking of, prediction markets are quite simply an online platform where people can bet on future events. Think of stocks on steroids and it is completely binary in nature operating on a simple Yes/No aka All or None. For example, Will JD Vance be our next President? Will the Godfather win the Oscar for Best Picture? Will the S&P 500 close 2026 above 8000? But why wait that long, you can "invest" where  the price of bitcoin will be in five or 15 minutes from now; hell, there are even stock options today that expire daily; it used to be once a month. This isn't investing, this is gambling. 

You might ask yourself, isn't this already being done on DraftKings or FanDuel's? Well, the answer is yes; however, this is now making its way into brokerage and online trading platforms. Originally what once stared out on such platforms as Polymarket, Kalshi and ForecastEx now is available at firms such as Robinhood (HOOD), NinjaTrader and Interactive Brokers and as recently as this past week, Charles Schwab (SCHW) announced they will allow clients to participate. Leave it to my industry to never pass up an opportunity to make a quick buck.

If you have read any of the previous Benzinga articles of my firm, LCM Capital Management, you would know my partner and I have a very jaded view of our industry.  In our opinion, Wall St is constantly looking to create an opportunity to make investors poorer and enrich themselves or their larger clients, for example, actively traded mutual funds, which have been around for years, and more recently, private credit. It is difficult making money in the stock and bond markets, especially over the short-term and if you listen to the talking heads on Wall St. But at least in those markets, if you are wrong initially, it does not mean you lose everything; the stock you buy might eventually turn out right, over time. In the prediction markets, it is pretty much all or none, similar to sitting at a blackjack table. At least there, everything is out in the open and you get free drinks. In the prediction markets, you have no idea who you are betting against.

An article written by Sam Taube for NerdWallet, explains, A key principle of fairness in financial markets is that all participants should have access to the same information, at least in theory. If some participants have special access to nonpublic insider information about a market, or have control over events that could affect the market, then they could use that to manipulate the market at the expense of other participants.

Insider trading laws attempt to prohibit this kind of behavior in the stock market, but there are no such laws regulating prediction markets yet — at least in the United States. As a result, prediction market bettors run the risk getting swindled by betting on “uncertain” future events against people who are actually certain about what is going to happen. The recent Middle East news has shined a spotlight on this issue as well.

In mid-February 2026, Israeli authorities accused two people of using classified information to place bets on Polymarket, the world's largest prediction market. Israeli broadcaster Kan News previously reported on government investigations into Polymarket bets related to the last round of U.S.-Israeli strikes on Iran in 2025.

And in late February 2026 six new accounts were opened and funded on Polymarket, and placed large "yes" bets on the question "U.S. strikes Iran by February 28, 2026?" The accounts netted more than $1.2 million in profits after the strikes began, raising further suspicions that insiders with connections to one of the militaries involved in this conflict are profiting from prediction markets related to it.

Remember, in the markets, money is never created nor destroyed, it's simply transferred.

After reading this, why would anyone think they are playing on a level, fair and open field or better yet, stand a fighting chance at making money? Do you think this is why Wall St is getting into the prediction markets? That was a rhetorical question BTW.

People have said to me over my 38 years in the business, "the stock market is rigged," and while I would disagree with them, I will admit it is tilted in the house's favor which is why my partner and I have never bought any products they push for our clients, only individual stocks and bonds along with a few index ETFs (Exchange Traded Funds) and money market funds for free cash balances.

The S&P 500 since 1955, including dividends, has delivered an average 10.70% annualized return. I wonder if the prediction markets would have a wager of, "will most investors beat this rate of return over the next 10 years?" My guess is, they wouldn't since it's a sure winner because we know most investors and for that matter, most mutual funds can't beat it.  In our view, these firms now playing in the prediction market game don't want you to win;  they want your money. 

Full disclosure, I am not an expert on the prediction markets and I will never be one but I can assure you, most people playing in them aren't either. As Yogi once said, "The future ain't what it used to be."

There is a Better Way…

Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.