Crowd Science

I was recently reading the book The Wisdom of Crowds by James Surowiecki.  A succinct description of the book is best given by relating an example he puts forward in the introduction.  In 1906 a British scientist named Francis Galton went to a country fair and made a startling discovery.  As he walked through the fair, Galton came across a weight judging competition.  A fat ox had been selected and members of the crowd were making wagers as to what the weight of the ox might be.   800 people tried their luck with the hope of winning one of the available prizes for the best guesses.

Galton decided to turn this competition into a little science experiment.  When the competition was done he asked the organizers for the tickets and ran a series of statistical tests on them.  To his great surprise, he found out that the average weight of all the entries at 1,197 pounds was pretty much the same as the actual weight of 1,198.  This in a nutshell is the wisdom of the crowds.  Although, individual guesses can be way off the mark, the collective answer is a very accurate representation of reality.

In the ensuing chapters Surowiecki also talks about how the opinion of the crowd is in general superior to that of experts.  This is particularly true in cases where there is considerable uncertainty such as when making predictions about the future.  He also talks about the importance of each member of the crowd making an independent decision such as to avoid the cascading effect of herd behavior. 

With this in mind I would like to run a fun study about the current market downturn.  In particular I would like to find out if we can use the wisdom of the crowds to accurately predict how low the S&P is going to go and when this bottom will be reached.  Both these criteria can be in the future or if you’d like they have already happened.  To make sure we collect independent answers,  the results will only be provided at a later date.

So, if you’d like to know when we are going to hit market bottom, this is your chance to find out !  Please fill in the form below to participate in the poll.  The S&P 500 reached a high of 3386.15 on February 19th, 2020.  The S&P 500 value you enter can be any number lower than the high and the date any date after February 19th, 2020.

Please enter your email if you would like us to update you on poll results.

Results will be published after enough data has been collected.  As Surowiecki says, the larger and more diverse the crowd, the more accurate the results.  So share this poll with as many people as you can :).

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