The Wisdom of the Crowds

What's confusing is how the wisdom of the crowd is defined.  While markets are very public, they don't reflect the majority opinion.  Markets are public by definition, but I'd posit that the decision that the crowd makes in the stock market is more heavily weighted by sophisticated investors.  The resulting outcome isn't the product of a majority opinion.  The average American could be stripped from the equation and the crowd accuracy of stock markets, sports betting markets, and political prediction markets, would probably be just as accurate.

That's why some of the justifications from behavioral financial economics are inaccurate.  Some traders claim that trading patterns can be exploited, because of the irrational nature of human beings.  Individuals are very irrational, but any such profitable patterns are likely gamed away by sophisticated investors.  They make up much more of the action than irrational investors.  That's what makes the investing game even more difficult.  To make a billion, I'd have to outsmart these sophisticated investors and that requires a lot of brains--the kind of brains that I don't currently possess.