At the risk of picking at a scab, heck, I am picking at a scab, I am bringing back up the topic of Market Efficiency.
One of the premises of the Market Efficiency is that because there are so many players in the market, all trying to look for values, there is really no good deal to be found. One can just buy the entire market and do well.
Now, I can make the same argument about the Political Efficiency. I think I can claim to invent this term, because I have not heard of it elsewhere. Now, what is Political Efficiency?
My premise is that due to the constant struggle between the conservatives and the liberals, the Dems vs. the Reps, our political system is the best it can be. There is no need for me to vote, really, because my vote does not carry any weight, and does not impact the results any. It really does not matter what my political beliefs are. Independent of my judgements and correspondingly cast votes, the system will seek its own equilibrium point, which is the optimum under the present condition. It's "the wisdom of the crowd" thing.
So, should I not bother to vote in the future? I am seriously considering that. It may be just a waste of my time. I simply cannot vote against the majority, no matter how small its lead is over the minority. I don't know beforehand whether I am in the majority or not before the election outcome, same as the argument that one cannot tell whether the market will go up or down with any certainty.
But there is a difference between the political system and the financial system. One cannot escape from the tyranny of the majority rule. But on the other hand, a person can go against the financial market if he has a reason to believe that it is wrong and he is right. If he feels the market is overvalued, why shouldn't he sell? And if he believes that the market will rise, why should he be afraid to buy?
A voter who turns out to be in the minority after the election outcome cannot opt to be out of the system (I am not talking about people who threatened to leave the country if things do not turn out their way). That minority still has to honor the rules passed by the majority. On the other hand, in the financial market, a person can go against the crowd, and if he turns out to be right, will do very well.
Hence, it is more worthwhile for an individual to tackle the quixotic job of forecasting the market movement than it is to affect where the political system is heading.
I am ready for your flames...