Comments on: Crowdsourcing meets crowd wisdom http://blog.oddhead.com/2008/03/28/crowdsourcing-meets-crowd-wisdom/ Musings of a computer scientist on predictions, odds, and markets Wed, 08 Sep 2010 15:43:44 +0000 hourly 1 http://wordpress.org/?v=3.0.1 By: Jason http://blog.oddhead.com/2008/03/28/crowdsourcing-meets-crowd-wisdom/#comment-281 Jason Mon, 21 Jul 2008 06:07:01 +0000 http://blog.oddhead.com/2008/03/28/crowdsourcing-meets-crowd-wisdom/#comment-281 wow, another Jason said what I'm going to say, cool wow, another Jason said what I’m going to say, cool

]]> By: David Pennock http://blog.oddhead.com/2008/03/28/crowdsourcing-meets-crowd-wisdom/#comment-280 David Pennock Tue, 08 Apr 2008 12:26:29 +0000 http://blog.oddhead.com/2008/03/28/crowdsourcing-meets-crowd-wisdom/#comment-280 Thanks Jason: looks like a fascinating study. Thanks Jason: looks like a fascinating study.

]]> By: Jason Ruspini http://blog.oddhead.com/2008/03/28/crowdsourcing-meets-crowd-wisdom/#comment-279 Jason Ruspini Thu, 03 Apr 2008 22:28:23 +0000 http://blog.oddhead.com/2008/03/28/crowdsourcing-meets-crowd-wisdom/#comment-279 It is a really small sample, but these guys did find some value in parsing news: http://www.seas.upenn.edu/~cse400/CSE401_2007/GilderLerman/paper.pdf But in terms of using this as a trading strategy, the rub I think would be transaction costs, which they don't address at all. Likewise if a market shows a positive serial correlation, that doesn't mean you can profit from it - because your transaction costs from getting in and out frequently will very likely cause you to lose in the long run even if the signal is "good". It is a really small sample, but these guys did find some value in parsing news:

http://www.seas.upenn.edu/~cse400/CSE401_2007/GilderLerman/paper.pdf

But in terms of using this as a trading strategy, the rub I think would be transaction costs, which they don’t address at all.

Likewise if a market shows a positive serial correlation, that doesn’t mean you can profit from it – because your transaction costs from getting in and out frequently will very likely cause you to lose in the long run even if the signal is “good”.

]]>