Are We More Bearish Forever Because of Social Media and Prediction Markets

Good morning…

The markets like to climb a ‘wall of worry’. I believe that wall of worry is now both permanent and elevated because of social media and prediction markets. Therefore, the ‘wall of worry’ of 2026 is not the same signal as it was 50 years ago.

Right now customers have their largest put positions ever. Of course, we have been in a long bull market and this chart is not percentage of portfolio so the chart could be misleading…but…

Furthermore, betting on death and end of the world is a thing in the era of prediction markets (I hope they just take these type of bets away)…

The sad truth is that an in an era of social media and prediction markets the virality of negativity and cruelty will always win. Because of this, I believe consumer confidence will remain lower and bearishness higher than past markets.

Another big change to sentiment is the growing wealth disparity gap.

Because of all this, market sentiment is harder to read and may explain the bigger vix spikes of the last 6 or 7 years.

As an investor, today I look at the market sentiment and assume we live in a more miserable and unhappier world post the Twitter and $META IPO’ and the sudden explosion of prediction markets.