Wisdom of Crowds: Crowdsourced Stock Opinions Beat Analysts

We do not all have the same opinion concerning the fortunes-to-be of the US and international economy, and we hold very diverse opinions of the fortunes of specific companies.  However, within the confines of these various views lies a very powerful force – what is known as “crowdsourcing”. 

From Wikipedia:  

"Crowdsourcing is the practice of obtaining needed services, ideas, or content by soliciting contributions from a large group of people, and especially from an online community, rather than from traditional employees or supplier.  This process is often used to subdivide tedious work or to fund-raise startup companies and charities, and can also occur offline.  It combines the efforts of numerous self-identified volunteers or part-time workers, where each contributor of their own initiative adds a small portion to the greater result. The term "crowdsourcing" is a portmanteau of "crowd" and "outsourcing"; it is distinguished from outsourcing in that the work comes from an undefined public rather than being commissioned from a specific, named group."

It now seems there is economic value in crowdsourcing stock market information and the consensus of the future for specific companies along with their stock.  This week, Wall Street Journal’s publication Venture Capital Dispatch posted an article titled “Study: Crowdsourcing Stock Opinions Beat Analysts”.  A link to the article is found here:


From the site estimize.com, Estimize Research, a description of the study:

"The study published by researchers from the City University of Hong Kong, Purdue University, and Georgia Institute of Technology found that bloggers on SeekingAlpha in aggregate were better able to predict earnings surprises and stock returns than Wall Street’s sell side pros and traditional financial news outlets."

From the WSJ article:

"SeekingAlpha.com, run by venture-backed Seeking Alpha Ltd., based in Ra’Anana, Israel, is a forum for investors who write opinion pieces about stocks for the site. An editorial board vets the quality of the blogs and posts up to 250 articles every day.

Researchers analyzed about 100,000 Seeking Alpha articles and commentary published between 2005 and 2012 for the paper “Wisdom of Crowds: The Value of Stock Opinions Transmitted Through Social Media,” which is forthcoming in the Review of Financial Studies."

The study used SeekingAlpha as its platform due to its broad base of contributors.  With its active and open comment section, the ability of interaction between author and reader will many times bring in new information that expands the discussions of the specific investment opportunity.  There are over one million readers registered on the site.  SeekingAplha has become one of the leading financial websites for original analysis of a wide variety of investment concepts. 

I have been a contributor on SeekingAlpha since February 2010, and have published almost 300 articles on their website.  My emphasis has been on specific companies that provide investors with relative fundamental value and that most likely pay a dividend, with a focus tilted to the utility sector.  I whole heartily support SeekingAlpha as an excellent resource for investment research and am pleased to have been associated with them.  For a time, I used the pen name Jon Parepoynt.  Below are links to a list of articles authored by George Fisher and Jon Parepoynt:



Author’s note:  Wondering Aloud - How many of these 100,000 articles were mine?

I appreciate your time and interest in Guiding Mast Investments, George Fisher