Friday, September 02, 2005

 

Subjective? - Part 2

This is related to the earlier post subjective.

If we assume all people who vote are equally intelligent, (not sure
if this is the correct word) then there is
no asnwer for the "Subjective" question. (I am not explaining
the answer...A little thought will lead to this result).

But if we pose this question to general public, will we recieve
uniformly distributed votes?

To test this, I did pose this question in my college e-group.
I recieved about 10-12 responses and the results were not uniformly
distributed! Far from it. Most of the votes were for
sachin...I think. (People hate to spend time and analyse things!)

Now coming to the main reason for this post:
I want to draw an analogy between this question and the
the importance of 'news' in stock market.

Suppose there is a bad news, : For example: A natural calamity.
Generally there is a general trend of selling because of this. I claim
that in an equally objective world selling is as likely as buying because
of this news. In other words I claim that most of the 'news' should
not trigger anything in the stock market - but in the actual world it does
which I claim is because of the inherent subjectivity of people.


(I know the explanation is not good...Sorry I am bored to explain more)

Comments:
You've read on EMH ?

http://en.wikipedia.org/wiki/Efficient_market_hypothesis
 
thanks for the link dinesh!

No I wasnt aware of this.

But what I am claiming is in some sense opposite of EMH.

It is similar to 'behavioural pshychology' (in wikipedia in the same page.)
 
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