Earlier this month, Rory Stewart’s prediction about the 2024 US presidential election caught my attention, not because of what he said, but because it was becoming difficult to separate wishful thinking from probability.
Rory expressed strong confidence that the Democrats led by Kamala Harris would be victorious.
In response to journalist Andrew Neil's prediction of a tight race, Rory stated:
This won’t be a close race decided by a 'couple of thousand votes'. He [Neil] is wrong. And Kamala Harris will win.
It’s very easy to be adamant about a point of view, and be convinced that your perspective is the correct one.
But I’ve learnt over many years not to base my predictions on individual opinions, regardless of how informed or well-placed the expert giving them.
Instead, I place substantial weight on the betting markets, which embody a fascinating phenomenon—the aggregation of collective wisdom.
Betting markets operate on a simple principle: the flow of information sets the odds.
Instead of relying on the insights of any single bookmaker or analyst, betting markets reflect the combined perspectives of countless participants, weighing probabilities based on the best available data.
This isn’t just speculation; it’s a proven methodology for assessing likely outcomes.
At Barnaby Cecil, we’ve built our Navigate Portfolios® on this very principle.
The concept of harnessing collective intelligence isn’t new.
In 1907, Francis Galton (a mathematician from Birmingham) famously wrote about the “Wisdom of the Crowd.”
He observed that a group of individuals, each making an independent estimate, could collectively arrive at a surprisingly accurate answer—more accurate, in fact, than that of any single expert.
Fast forward to today, and this principle underpins both prediction markets and investment strategies like the ones we have designed at Barnaby Cecil.
Galton’s findings resonate with the way we build portfolios, by looking at the collective judgment of global investors, not at individual predictions.
This aggregation of information is an unparalleled tool for efficiency.
Our approach involves selecting 29,269 individual securities to mirror the global market.
In essence, we’re replicating the aggregate bets of every investor worldwide seeking to capture the most efficient outcome, much like a well-calibrated betting market identifies the most likely event.
Rather than relying on individual stock pickers or fund managers, we focus on index funds that mirror the collective wisdom of the entire market.
These funds embody the most efficient portfolios, derived from the aggregated decisions of millions of investors.
We don’t need to pick the best company, we just need to hold, in general, the best companies. The way to guarantee you hold the winners is to make sure you own them in the first place.
This approach removes the guesswork and ensures that our Navigate Portfolios® are always aligned with the best bets of the global crowd.
By doing so, we’re not just replicating the wisdom of the market; we’re also ensuring that our clients benefit from its unparalleled efficiency.
Whether in politics, betting markets, or investment portfolios, the lesson is clear: collective wisdom consistently outperforms individual intuition.
By trusting in the aggregation of data and insights, we can make better, more informed decisions.
As we approach the next US election—and navigate ever-changing financial markets—our strategy remains steadfast.
Just as betting markets distill probabilities into odds, our portfolios distill the collective wisdom of the global market into a strategy designed to deliver long-term results.
In the end, it’s not about being the loudest voice in the room—it’s about listening to the crowd.
That’s where the real power lies.
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