What is EconPal?

Let me begin with a story:

In 1906, the British scientist Francis Galton experimented:

He invited 787 people to guess the weight of a cattle to be slaughtered.

The crowd guessed the weight to be 1197 pounds.

Galton thought that number would be incorrect.

The actual weight was found to be 1198 pounds.

The judgment was virtually perfect.

Why is crowd prediction so powerful?

Communication

  • The crowd is smarter than any individual
  • Hundreds of people gathered to generate a collection of information.
  • Invalid information would be filtered
  • High-quality information was continually optimized.

Noise cancellation

  • With nearly 800 predictions, some underestimated the weight while some overestimated it.
  • They cancel out each other so that the final result is close to the actual weight. 
  • The way the noise cancels is similar to the assumption that irrationalities of investors are countervailing.
  • The way the noise cancels is similar to the assumption that irrationalities of investors are countervailing.

It is nevertheless true that crowd prediction has a lot of problems. The key is taking advantage of the crowd prediction for future prediction.

How?

  •  Avoid single source of information
  •  Think critically

It Looks Easy. But It's Not.

Why?

As a result, I began seeking out the smartest people I could find who disagreed with me so that I could understand their reasoning. Only after I fully grasped their points of view could I decide to reject or accept them. By doing this again and again over the years, not only have I increased my chances of being right, but I have also learned a huge amount.

Ray Dalio 
Founder of Bridgewater Associates

I have a lot of ideas in my mind but rarely write.

It is time to write because it can help me learn more, communicate with clarity and most importantly, make better decisions.

I need to start a blog about my thoughts and you need to read and give me your comments.

People from all walks of life are welcome to voice different opinions because this helps cancel the noise out each other.

This is where EconPal comes in.

With EconPal, I am going to share my points of views on economics and politics from time to time.

Anyone who disagrees with me can leave comment and let me know.

I do love disagreement with sound reasoning.

Hi there, my name is Daniel, the owner of the EconPal.

Please read more and I hope you will find the posts useful.

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