Fundamental analysis asks what makes an outcome more or less likely. On a prediction market, the answer also has to fit the contract and the price. A useful research note explains the evidence, its limitations and the circumstances that would change the forecast rather than simply collecting persuasive headlines.
Begin with a base rate
Find a relevant reference class before examining the most memorable recent story. For a hypothetical recurring announcement, ask how often comparable announcements happened within the same deadline. Describe why the comparison is appropriate and where it differs. A base rate is a starting point, not a substitute for current information. Selecting only successful historical examples can create an optimistic estimate before the analysis begins.
Prioritize evidence close to the event
Separate a primary document from an interpretation of that document. Record who produced the information, when it became available and what claim it actually supports. Several articles repeating one press release are not several independent pieces of evidence. Track whether the information concerns the contract’s outcome or only a related topic that makes the story sound plausible.
Write competing scenarios
Describe at least one route to the selected outcome and one route to its failure. Assign assumptions to each rather than letting the preferred scenario absorb all uncertainty. For example, an event may require both a decision and its completion before a deadline. Your overall estimate should account for both stages, with clear attention to their dependence rather than treating them as unrelated probabilities.
Update your estimate before checking the quote
Record your new forecast and reason for revision independently of the current market price. Then compare the two and inspect execution costs. This makes it easier to see whether you genuinely changed your belief or merely followed the chart. Keep a version history so your later review includes unsuccessful forecasts as well as the occasions when your research was early.
Questions & answers
Is fundamental analysis only reading news?
No. It also includes choosing a reference class, evaluating sources and testing alternative explanations.
How should I handle conflicting evidence?
Explain the disagreement, assess source quality and widen uncertainty when the evidence cannot support a precise estimate.