Superforecasting, Polymarket, and How I Actually Make Predictions

The book Superforecasting: The Art and Science of Prediction by Philip Tetlock is about a small group of ordinary people called superforecasters who consistently beat experts, intelligence agencies, and even polls when predicting significant real world events. The insight comes from a classic story the book uses as its central metaphor: guessing the weight of a bull at a county fair.

At a fair, a butcher puts a live bull on a scale and invites hundreds of random people, farmers, townsfolk, kids, literally anyone, to write down their best guess of its weight. No one knows the exact number. Individual guesses are all over the place, some wildly high, some way too low. But when you take the average of every single guess, the result is astonishingly accurate, often within a pound or two of the bull's true weight.

Why? Because the crowd isn't guessing randomly. Each person has a tiny, unique scrap of information. Errors and outliers cancel out. The collective wisdom of the crowd turns out to be smarter than any single expert.

Tetlock's research showed the same pattern in forecasting world events. When you let thousands of people make careful probability estimates about things like, will the USA attack Iran, or will Iran attack its neighbours' oil infrastructure, and then average those estimates, you get very accurate predictions. A tiny subset of those people, the superforecasters, are especially good at it because they use specific habits: updating beliefs with new evidence, breaking big questions into smaller ones, thinking in probabilities instead of yes or no, and avoiding overconfidence.

So where do prediction markets fit in? First things first, I don't gamble, nor do I think it is a net positive to society. But the reality is that prediction markets exist and you can use them to your advantage.

Polymarket is just a modern, money-on-the-line version of the county fair bull-weighing contest. Except instead of guessing a bull's weight, people are betting real money on the probability of major world events. The magic is the same as in the book: diverse information flows in from thousands of participants worldwide, some superforecasters, some specialists, some just sharp bettors. Skin in the game in the form of real money weeds out noise and forces people to be honest about what they actually believe. Errors cancel out in the price, producing a single, constantly updating superforecast.

Tetlock's superforecasters were basically doing on their own what Polymarket does at scale. The book proved that good forecasting isn't about being a genius or having secret access, it's about aggregating and refining many imperfect judgments.

And then there's little old me. I don't think in absolutes. Years of intelligence briefings have shaped my thinking into degrees of probability: highly likely to be true, possibly true, unlikely to be true, highly unlikely to be true. When it comes to complex events, I assume I don't have, nor will ever have, all the facts. Only those directly involved do.

So from that perspective, I like to look at global shifts, market movements, and theorise which companies are poised to benefit from certain events happening. I'll then refer to Polymarket for its probability of occurring, and begin researching which companies sit downstream of these effects. An important side note: I am not a trader. I look for long term investments with sound fundamentals and plan to hold them for several years. As a retail investor, I have the ability to move at a pace that large funds do not, giving me the advantage of speed if my analysis is correct.