At long last, I’ve finally gotten into the action on InTrade. This “predictions market” put the “efficient markets hypothesis” (the theory that, at any given time, the price of a stock or commodity reflects all available information) to the test.
Like the stock market, InTrade essentially provides its users with a platform for betting on a predicted outcome. After an initial public offering, “stocks” of an outcome trade up or down, based on public demand.
Every share sells for its market-determined value (which, historically, tends to be a darn good proxy for its actual probably outcome). After the event, the value of a share goes to $10 if the expected event (ex: Barack Obama becomes the 44th President of the United States) is fulfilled, or $0 if it is not.
Yesterday, I bought 100 shares of Milk to win the 2009 Academy Award for Best Picture.” I set a market limit order at 49 cents, which was quickly filled. If Milk loses to Slumdog Millionaire (as it likely will), I’m out $50. If Milk wins, I’m up $950.
Here’s my case for Milk winning, in the form of a numbered list:
- Milk is a better movie than Slumdog Millionaire.
- The Academy of Motion Picture Arts and Sciences likes Gus Van Sant better than Danny Boyle. I can’t prove this one, but: Van Sant is a long-standing and visible member of the Hollywood establishment; Danny Boyle’s is some young punk kid whose last big film was 28 Days Later. (Don’t get me wrong–I like Danny Boyle better than Gus Van Sant, but…)
- Milk is about gay rights–in a year when gay rights is in the front of everyone’s minds (with the success of Prop-8, that is. The Academy would probably give the award to Milk, just to spite the Church of Jesus Christ of Later Day Homophobic Saints).
- The children actors in Slumdog Millionaire, though picked from the slums, were grossly underpaid and quickly returned to the slums from whence they came, when the filming was over. (See: this article.)
- The Academy has long succumbed to the inherent pleasure and persuasiveness of numbered lists!
So. Maybe Milk will win. At 20:1, I feel like it’s a solid bet. And, after all, my portfolio could use a little luck, after my ill-advised bet on Citigroup (NYSE: C) eight weeks ago.
May the best film (that conforms to the political agenda of the Academy) win!