Forget the wisdom of crowds!

by Stubborn Mule on 5 October 2010 · 2 comments

Congratulations to all you insightful Stubborn Mule readers! Despite the fact that pricing in the financial markets was indicating around a 60% probability of the Reserve Bank hiking the official interest rates, participants in a poll here on the blog put the chances of no move at 60%. Even the fact that Sportsbet punters* were tipping a rate rise did not sway Mule readers. And it turns out that they had a better read of the RBA tea-leaves than the so-called experts. Today the RBA announced they were leaving the official cash rate unchanged. Well done, all of you!

* Interestingly, Sportsbet have pulled financial bets from their website. Perhaps the Mule post on the topic had some repercussions. UPDATE: their financial bets are up and running again.

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{ 2 comments… read them below or add one }

1 Marco aka Cracticus October 5, 2010 at 3:53 pm

Stubborn,

I admit: I thought they would increase interest rates by 0.25% (plus whatever the 4 pillars fancied) and I was worried.

Maybe you won’t believe me, but, boy, am I happy I was mistaken! Please, RBA, make a habit of this!

Well, we can breathe freely for a few more weeks.

2 Stubborn Mule October 5, 2010 at 6:47 pm

Reminds me of the practice of “emotional hedging”: bet on the team playing against the one you’re supporting. If your team wins, you’re happy, if they lose you’re also happy, because you won the bet.

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