Imagine you were at a conference and you asked 1000 people how many jelly beans were in a jar. If you picked one random guess, chances are it would be nowhere near the actual number. However, if you calculated the average of all 1000 guesses, there is a good chance that it would be within 1 or 2 from the actual number.

This is called the wisdom of crowds — the idea that the aggregate opinion of a group of people is often very effective at reflecting truth.

Intuitively, this logic is also applicable in the context of markets. The wisdom of crowds explains why Polymarket priced in who would win the election far sooner than mainstream media outlets did. Similarly, it explains why it is so hard for equity investors to beat the overall market. The market is incredibly good at distilling the collective wisdom of numerous individuals into a single price.

However, I’d argue that the wisdom of c