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Presidential futures as a lagging indicator

Posted By Barry Ritholtz On October 12, 2004 @ 2:04 pm In Politics | Comments Disabled

Yet another flaw of these futures markets: In addition to the basic premise being faulty [1] (that Markets predict the future), and the infintesmal amount of money at risk, there’s another basic problem with them: They are lagging indicators.

This is likely due to their over-reliance on polls, which tell you what a group of people said 3-5 days ago (or longer). Hardly the source of wisdom about the future . . .

click for larger chart
Pres_futures_101204 [2]

via Iowa Electronic Markets [3]


Article printed from The Big Picture: http://www.ritholtz.com/blog

URL to article: http://www.ritholtz.com/blog/2004/10/presidential-futures-as-a-lagging-indicator/

URLs in this post:

[1] basic premise being faulty: http://bigpicture.typepad.com/comments/2004/10/presidential_fu.html

[2] Image: http://bigpicture.typepad.com/photos/uncategorized/pres_futures_101204.jpg

[3] Iowa Electronic Markets: http://128.255.244.60/graphs/graph_Pres04_WTA.cfm

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