The markets revere individualists who are prepared to follow their hunches think Soros, Buffett or Kerkorian. But are the many actually smarter than the few?
A new website aims to find out. Set up by three former Oxford University students late last year, consensusview.com already has 1,100 registered users drawn from most of the major investment banks and about 25 hedge funds.
Participants in the most active equity, FX, and futures markets forecast where their market will be at the end of the day.
Voting starts at 4:30am London time and closes when each market opens. In return for their vote, participants get to see the consensus view for their market.
Voting is free. This started out as a pet project, says co-founder Stephan Bisse. It does have business potential but the foremost reason was to see whether the idea of the wisdom of the crowds has predictive power in the financial markets.
The site tracks the accuracy of the consensus over the previous 100 days. With figures of 57% for the S&P 500 and 59% for gold futures, Bisse could be on to something. But hes keeping things in perspective.
Hopefully, the site is one valuable tool to get a snapshot of market sentiment, says Bisse.
Were not going to replace balance sheet or macroeconomic analysis.