Valuetainment - November 02, 2026


Kalshi Had Bolsonaro at 85%. Lula Won. Kalshi Founder Explains Brazil’s Upset

250 Employees, $22 BILLION： Kalshi CEO Reveals His Secret to Building an Empire Kalshi’s Weirdest Markets： Taylor Swift, Goats & Onions

Episode Stats


Length

6 minutes

Words per minute

197.63

Word count

1,224

Sentence count

98

Harmful content

Misogyny

1

sentences flagged


Transcript

Transcript generated with Whisper (turbo).
Misogyny classifications generated with MilaNLProc/bert-base-uncased-ear-misogyny .
00:00:00.000 today's a special day why brazil election president bolsonaro lula right day one you
00:00:05.340 guys had him at 80 that's right and if you go to it widen it a little bit more yeah so day one go
00:00:10.960 back to like uh two days ago go back two days ago you had him at 87 that's about two weeks ago a
00:00:18.120 week ago but that's fine like 75 yeah 75 so and all of a sudden this flips that's right lula wins
00:00:25.600 15 out of 7, 17 districts that were doing the counting of the votes
00:00:30.880 said Bolsonaro's going to win.
00:00:33.540 Last minute, he pleads with the Supreme Court to open up the voting
00:00:36.220 in areas that are pro-Lula, and all of a sudden he comes out of nowhere,
00:00:39.840 wins, I don't know how many he gets, plus minus 10.6 million.
00:00:42.620 This has never happened in history, right?
00:00:44.040 So for you, when you watch it, because you have a data that we don't have,
00:00:48.580 what do you speculate is going on there?
00:00:50.180 This is what's important to understand.
00:00:51.460 There's two things.
00:00:52.320 one a market doesn't create new data a market aggregates all the data right like apple stock
00:01:00.780 doesn't run the product for apple right now apple stock is at 100 a share today let's call it
00:01:06.620 if apple does a series of actions like for example if they some bad regulatory action
00:01:12.980 comes out that they were doing something bad in some of their factories what's going to happen
00:01:18.120 to the stock?
00:01:19.280 It's going to go down.
00:01:20.440 Why?
00:01:20.900 Because new information
00:01:21.700 has come to light
00:01:22.420 that is now going to be
00:01:23.360 priced in by the market.
00:01:24.280 The market is going to absorb
00:01:25.480 that information in real time.
00:01:26.780 If Apple releases
00:01:27.680 a bunch of great products
00:01:28.740 over the next three weeks,
00:01:29.980 what's going to happen
00:01:30.420 to the stock?
00:01:31.400 It's going to go up.
00:01:32.720 So what,
00:01:33.180 and this is always important.
00:01:33.960 Markets, what they do
00:01:34.580 is they absorb
00:01:35.420 new information in real time.
00:01:37.520 They're an aggregate of,
00:01:38.980 and in the elections
00:01:39.520 is of the polls,
00:01:40.420 the news,
00:01:41.520 candidate quality.
00:01:42.780 If a candidate has a scandal,
00:01:43.720 what's going to happen
00:01:44.120 to their odds?
00:01:45.180 They're going to tank.
00:01:46.160 So markets, 0.84
00:01:46.900 that's what they do.
00:01:47.320 They do a very good job
00:01:48.020 but summarizing all the information that's out there.
00:01:49.940 And you know that the incentive to summarize it is clean
00:01:51.940 because there's no partisan lens or bias.
00:01:53.900 Like why is Fox saying something or CNN saying something?
00:01:55.920 There's a partisan lens in the air.
00:01:57.400 Whereas the only lens for prediction marks
00:01:58.700 is that people are trying to get to ground truth
00:02:01.540 because if they're closer to the truth,
00:02:02.540 they're gonna make money.
00:02:03.060 If they're further from the truth,
00:02:03.760 they're gonna lose money.
00:02:04.860 Now, sometimes there's new piece of information
00:02:07.840 that's very material, right?
00:02:09.300 Like if a candidate is doing very well,
00:02:11.300 but then their scandal happens,
00:02:12.740 they're gonna tank very quickly.
00:02:13.960 And that's what happened.
00:02:14.820 There's a big new shift that happened yesterday
00:02:17.300 on the election.
00:02:18.060 Could you guys pinpoint
00:02:18.720 what it was?
00:02:19.760 I think a big shift happened
00:02:21.300 when I think the extensions
00:02:22.920 I think started happening,
00:02:23.940 but I hadn't looked at it quite yet.
00:02:26.080 But the more interesting way
00:02:27.020 to evaluate the prediction markets,
00:02:28.420 I think,
00:02:28.780 if you go back
00:02:29.420 to the calibration plot,
00:02:30.480 I think we have it
00:02:31.260 in open, yeah, right now.
00:02:32.600 If you go down a little bit,
00:02:34.300 is this.
00:02:34.760 So if you zoom in a little bit
00:02:36.020 on some of these charts,
00:02:37.360 that's what we call
00:02:37.840 a calibration plot.
00:02:38.440 So you cannot evaluate
00:02:39.000 a prediction market accuracy
00:02:40.040 on one market.
00:02:41.700 There's a study
00:02:42.260 on like 2 million markets
00:02:43.360 that's public,
00:02:44.320 anyone can replicate it,
00:02:45.640 where it says,
00:02:46.040 what is the probability
00:02:46.580 that we're saying something is going to happen with
00:02:48.140 and how often does it happen?
00:02:50.420 So if you say something has 20% chance,
00:02:52.040 it doesn't mean it's not going to happen.
00:02:53.980 It means it's going to happen one in five times.
00:02:57.080 It's going to happen two in 10 times.
00:02:58.380 It's going to happen 20% of the time, right?
00:03:00.140 And that's so important.
00:03:01.260 It's like sometimes the 10%er,
00:03:03.620 if you run the race 10 times, what's going to happen?
00:03:05.980 It's going to happen one out of 10 races.
00:03:07.220 It's not.
00:03:08.000 And so that's what shows you in the spot,
00:03:09.900 which is actually very accurate.
00:03:11.020 It's like when we say something has 20% chance,
00:03:12.560 it actually does happen 20% of the time.
00:03:14.520 So on the back end, what did it show to you guys?
00:03:16.500 Did you, did Cauchy know that there is a possibility that Lula wins?
00:03:21.100 There was a 25% chance, one in four possibility that Lula wins.
00:03:25.300 And that was, you know, looking at all the prevailing factors.
00:03:29.200 And that changed, obviously, dramatically when the new material information came to light.
00:03:33.420 But, like, again, if Lula, if you play that election four times and Lula wins zero out of those four times, then we would be wrong.
00:03:38.800 He should win one out of those four times.
00:03:40.160 And that happens.
00:03:41.200 So what I say with the midterms right now is people ask me, oh, how do you evaluate the midterms?
00:03:44.180 Like, look, look at 100 races that Cauchy is predicting.
00:03:46.500 and assume that the, you know,
00:03:48.020 it's saying that the Republican is winning 50% of the time
00:03:51.160 or like 40% of the time.
00:03:52.780 How many of those 100 races should go Republican?
00:03:55.240 40.
00:03:56.460 It shouldn't be zero.
00:03:58.140 It's not like every one of those races should go Democrat.
00:04:01.700 Yeah, and that one makes more sense
00:04:02.980 because it's a volume of races, right?
00:04:05.300 You're not dealing on one.
00:04:06.380 That's right.
00:04:06.920 But you have to look at elections over time.
00:04:08.700 It's a probabilistic model, right?
00:04:10.160 Like right now we're seeing the Senate
00:04:11.220 is going to go 64% Democrat, 60 whatever.
00:04:13.880 It's like a three-sided coin
00:04:15.280 where two sides are Democrat, one side is Republican.
00:04:18.220 It's a three-sided die.
00:04:19.500 There's three sides, two dem, one Republican.
00:04:21.460 If you roll that die, you can still land Republican,
00:04:23.280 one in three chances.
00:04:24.520 It's not a poll.
00:04:25.560 And people really confuse markets with polls
00:04:27.400 because polls are, what are you going to vote for?
00:04:29.940 It's checking who's going to vote for what.
00:04:31.840 Markets are, what is the probability?
00:04:33.560 What do you think will happen, that something will happen?
00:04:35.320 So of the guy that does 100 million,
00:04:37.340 does he do a lot of trades?
00:04:40.280 Yes, yes.
00:04:40.920 So it's not one, it's like diversifying.
00:04:43.240 Is that kind of a-
00:04:43.940 For sure, for sure.
00:04:45.060 Got it.
00:04:45.280 It's very diverse.
00:04:45.820 You're trading.
00:04:46.540 You're trading in and out.
00:04:48.200 And those are the guys that make the markets accurate.
00:04:50.440 Those guys would never be allowed on a sports book.
00:04:52.480 Why?
00:04:52.860 Because if they were making that amount of profit, who is it going from?
00:04:55.420 The casino.
00:04:56.120 Yeah.
00:04:56.660 It's a very different model.
00:04:57.560 The casino is a way to move money from people to the casino.
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00:05:31.420 If you enjoyed this video, you want to watch more videos like this, click here.
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00:05:41.620 Thank you.