The market would predict MNT if it was going to happen

From Wise Nano

the foresight exchange

The foresight exchange is an online market where it is possible to buy or sell bets relating to the occurrence of well-defined events in the future. Certain popular economic theories assert that such markets aggregate all available data on an event and output, in the form of a price, the probability of an event's occurrance.

However, it can easily be shown that the price of a share in the Feynman Grand prize future awarded by the Foresight exchange is irrational. Since the claim that markets aggregate data to predict events is supposed to hold for markets of a wide variety of sizes, this strongly undermines the claim, at least with respect to the ability of markets to aggregate information about MNT.

When the Feynman Grand Prize is awarded, the relevant claim on the Foresight exchange will pay $1 for every full year between January 1st 2000 and the date upon which the Feynman Grand Prize is awarded. This claim has sold for between $20 and $25. A casual examination of the possible combinations of payoff date and quantity reveals that there is no payoff date for which this claim will pay more than a 2.1% nominal return on a $20 investment, or more than a 1.5% nominal return on a $25 investment. Real returns are likely to be lower. Obviously, for returns to be positive at all, there must be a >10 year period between the purchase of the claim and the recipt of the claim. US treasury bonds, however, have offered a greater than 2.1% nominal return for investments of 10 years or greater at every date since the Feynman Prize claim was offered. In other words, there has never been any reason for a rational investor to purchase this claim at the offered price.

However, since there is a steadily increasing amount of U.S. dollars in circulation, while the Foresight Exchange currency is expected to be a "closed currency", some people claim even a 0% rate of return in FX currency is better than the average investment.

See

• The Foresight Exchange http://ideosphere.com/

the real stock market

There are also specific difficulties that the stock market would face in integrating the information that MNT is likely to be developed in the near future. Simply put, the economic consequences of MNT are extremely large and largely unknown. Even the security of property rights beyond its development is in doubt. It would therefor be essentially impossible for a prudent investor to select their portfolio with due regard to the chance that MNT will be developed. Since such preparation is the force driving markets to aggregate data, there is little reason to think that markets can reveal this. If one was dedicated to the idea that the stock market can in principle predict anything, at least in terms of having all future developments correctly probablistically incorporated into stock prices, one would still need some sort of futures market to convert pre-MNT money into post MNT money in order to do so. One could reasonably argue that current futures markets meet this need, as they enable the purchase, with current dollars, of goods which will be difficult to reproduce with early MNT, but the relative values of such goods a few months after MNT is developed are still highly uncertain for other reasons. For instance, MNT will not be able to produce elemental copper, but it will enable the production of carbon nanotubes, and possibly of superconductors, both of which may be able to largely replace copper.