As readers of this blog well know, the wisdom of crowds manifests itself when the aggregated thinking of a crowd is more accurate than that of even an expert individual. This blog has seen numerous examples of leveraging crowd wisdom, such as a crowd-curated exhibit at the Brooklyn Museum and a crowdsourced restaurant ingredients in Washington. But even though the wisdom of crowds has manifested itself from economics to psychology, we tend to go about our stock investing based on the wisdom of few individuals – such as large institutional investors, financial analysts, company CEOs. So why not apply the wisdom of crowds to stock market predictions?
Enter Piqqem, a new web app which does precisely that. Piqqem captures predictions of stock movements from its users, and displays the results in a variety of interesting and valuable ways. Put simply, Piqqem captures and displays the stock market wisdom of crowds. Even if the crowd turns out to be not-so-wise, its predictions are still useful if they’re consistent, because you can always choose to bet with or against the crowd. And even if the crowd’s predictions turn out to be inconsistent, capturing them is still worthwhile in that it explores whether the crowd can predict stock movements more successfully than the seasoned individual – a fascinating and open question, especially at a time when stock markets are turbulent and crowd sentiments can add valuable insight beyond traditional stock market analysis. Ultimately, crowd predictions are intended as one in a portfolio of sources on stock information; and a powerful source in that it represents a distribution of predictions versus a single, albeit expert, one.
Every day, the biggest investors use expert opinions to move the market. Piqqem enables users to aggregate their opinions and potentially move the market together. It is therefore a technology enabling the emergence of crowd wisdom, and – if acted upon – of smart mobs of investors.
Can the crowd predict the movement of stocks more successfully than even the seasoned individual? Can Piqqem enable a smart mob of investors? Join the Piqqem crowd to find out…
Comments
@ 19:21
Uh. And, let’s start up a web site called likkem.com to predict piqqem predictions!
It’s quite possible that the stock market may be a bigger mob than piqqem’s mob.
@ 03:09
I thought the stock price WAS the wisdom of the crowd. The crowd is collectively pricing the assets in an exchange right? If the individuals really were wise about the direction of a certain stock’s movement, wouldn’t they buy or sell short the stock accordingly. So then if they aren’t sure enough to stake money on it, then piqqem and other sites like it would be an aggregate of this less certain individual analysis and hence less accurate.
What would be so much better and much needed would be a wisdom-of-crowds that tried to collectively understand the fundamentals of assets and indicators and thus help us understand the macro consequences.
@ 11:03
@Felix - likkem.com, I like it! and surely the stock market is a bigger mob than Piqqem, but the intention is to get a representation of crowd sentiment. it’s like that saying about maps: the most accurate map of the earth would be the same size as the earth and therefore useless. i.e. the Piqqem crowd may be smaller, and not useful despite being smaller, but because of it.
@haig - re stock price being the wisdom of the crowd: great point, but not precisely the case. the stock market is a summation of the demand and supply of stock market shares, in which few big buyers following the advice of few expert analysts completely overwhelm individual investors. Piqqem, on the other hand, gives an equal vote to all investors – whether expert or not – therefore providing a much more accurate representation of what the crowd thinks. that said, your idea for applying the wisdom of crowds to fundamentals is interesting - how would you implement it? could it be incorporated into Piqqem’s current functionality? Piqqem IS in beta, you know….
@ 11:47
Note that Piqqem just got featured on Techcrunch: http://www.techcrunch.com/2008/11/07/can-piqqem-use-the-crowd-to-pick-stocks-dont-bet-on-it/
@ 10:05
[...] exhibit the wisdom of crowds, hence the name for my previous Smart Mobs post about Piqqem, namely, Piqqem: a smart mob of investors?. This suggests that smart mobs may or may not exhibit the wisdom of crowds; wisecrowds are a type [...]