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Interesting book I read years back called Wisdom of the Crowds- why the many are smarter than the few and how collective wisdom shapes business. In real world applications the collective guesses of individuals attempting to predict or solve a problem were then applied to the Bayes Probablility Theorem to arrive at a new collective estimate of the group. But somehow the whole was greater than the sum of the parts.
In one example a lost submarine - which the navy had no idea where it dissappeared somewhere in the North Atlantic- was found within 222 yards of the collective groups estimate. What is fascinating is that this location was not representative of where anybody individually had said it would be. And they had virtually no information to work with. Nobody knew how the submarine sank, how fast it was travelling or how steeply it fell on its final descent. Somehow they tapped into a collective information field. ( "the force" is not a fairy tile. Skywalker btw is english translation of Siberian word Shaman.)
I always wanted to propose a thought experiement on this site to see if collective intuition might predict/influence markets. Something simple such as at 10:00 am everybody makes a guess, intuit, analysis, whatever, of where, for example 6e, will be an hour from now. Higher or Lower. And then keep graph our results. So much of reading markets, for me, is observing or sensing flow. What does the energy feel like today? We may be overlooking untapped collective energy on this site. Everything is energy - we have forgotten,
I love N.H.'s ideas but he no doubt frightens/threatens the existing paradigm. First they ignore, then they . . . .
Sorry for my joke, which is based on the truth of the market. The market often does the opposite of what the majority expects it to do.
But as a general rule you are right. If you combine the force of a team, whatever task you want to accomplish, the team will get there faster and with better results than anybody can do on its own. This is indeed common wisdom and has been shown many times. By the way, I have read the book "The Wisdom of the Crowds" and it is part of my trading library.
The only point I wanted to make that it is not easy to apply the wisdom of the crowds to markets as they suffer from a bipolar disorder. It is known that you can make a fortune when the crowd is running in the wrong direction, see the classic "Extraordinary Popular Delusions".
Thanks for your reply. I think perhaps the choice of book I made was too much an example of rational analysis and collective thinking and therefore your conclusion makes obvious sense.
In fact I really was thinking a little more on a Jungian / synchronistic model of collective wisdom. Being awake to the event of synchronicities in one's life not only opens new doors of perception - thank you Aldous Huxley- but if we run with it changes our perceptions of reality and it limits.
So perhaps a better example is Jeremy Narby's book The Cosmic Serpent in which he explores the fascinating hypothesis of consciousness at the molecular dna level. Information is energy. Matter is the illusion. I have shown physician friends this book and they were spellbound. I speculated you are one of the few on this site who may already embrace that view to some extent. The fact that you own wisdom of the crowds suggests my intuition was right.
So my thought experiment was somehow tapping collective intuition. Newton and Descartes the founders of reductionist thinking ironically had their greatest insights in their dreams. I should have been braver and just put it out there from the start.
