Could Wikipedia be more reliable than Encyclopaedia Britannica?

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It might, even though is not written by Nobel laureates and every kid with a third grade education may have access to it. Simply because of the number of contributors and the number of times articles are reviewed, corrected and modified, that is far higher than what Encyclopaedia Britannica can afford. This post, however is not about encyclopaedias, but the Wikipedia example was needed to prove a point.

Everybody nowadays uses reviews online to ascertain the quality of what we will buy, we do that on Amazon or wherever on the internet. We use peer reviews because we deem them as unbiased as one can get. This however it’s not only about buying appliances or skimming through Tripadvisor. Sometimes you can get money out of a review.

Seeking Alpha is a platform in which investors can voice their opinion. If these opinions reach a certain standard of quality, they are published and receive comments. Now when your article is read by a thousand people you actually receive money and from that point onwards the more readers the more money. What one would not imagine is that this is not the way you make the money out of this. The real way is actually following those recommendations.

A recent academic study found out that the more an article is positive about a stock and so its comments the more the stock is likely to perform well in the stock market. And the opposite is also true. Moreover it has been found out that the website has not only the power of moving the stock but also a predictive power (earning surprise). The study also shows that the crowd can outperform professionals (analysts) . This does not mean of course that sell-side analysts are useless, but simply that a platform like Seeking Alpha can outperform them on many aspects. It provides a broader coverage of the market (500000 + collaborators), it provides an arena where biased/incorrect information is promptly challenged by peers and relies on the assumption that people want to provide useful info because it fosters reputation and number of visitors and the more readers you have the more the website pays you.

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