Washington Post Wisdom Of The Few Should Think Again
Posted on October 20, 2006
Filed Under Companies |
Newspapers really like to put a new spin on an old fact. In fact it’s in the nature of journalism to be dealing with repetition in novel ways. That could be one half of the definition of news.
The Washington Post’s report on websites that promote “expertise” instead of the wisdom of the crowd is a case in point. Surprisingly this notion has the backing of Michael Arrington at Techcrunch. Sites include Pickspal and Marketocracy, the latter profiling 55,000 stock portfolio managers to highlight the best.
The value of these sites appears logical enough - the wisdom of the crowd is in line for a drubbing so what else is there to talk about - the wisdom of the few.
One critical voice puts it this way: “the companies discussed in that article come from simply SELLING the predictions. So like mutual fund companies that keep thousands of funds around just to publicize the occasional winners, their interests are not aligned with yours. They just want you to transact (and buy picks), not actually participate in the winnings themselves.”
I hadn’t realised that mutual fund companies keep thousands of funds going just so they can publicise a few winners (some exaggeration surely) but Andrew Chen, who writes Future Play, and who made those comments has another point. In the end we’re looking at predictions that might level out over time so you might well be buying into somebody else’s lucky run (which also could be coming to an end).
Right or wrong it’s good to see the wisdom of the crowds and the news-spin on that being challenged.
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