The Crowd: "Lars, you are fat!"

The Crowd: "Lars, you are fat!"
On Friday I was doing a presentation on the global economy (yes, yes mainly on global monetary policy) for 40-50 colleagues who are working as investment advisors in the Danske Bank group. As I was about to start my presentation somebody said "The audience have been kind of quiet today". I thought that was a challenge so I immediately so I jumped on top of a table. That woke up the crowd. I asked the audience to guess my weight. They all wrote their guesses on a piece of paper. All the guesses were collected and an average guess - the "consensus forecast" - was calculated, while I continued my presentation. I started my presentation and I naturally started telling why all of my forecasts would be useless - or at least that they should not expect that I would be able to beat the market. I of course wanted to demonstrate exactly that with my little stunt. It was a matter of demonstrating the wisdom of the crowds - or a simple party-version of the Efficient Market Hypothesis. I am certainly not weighing myself on a daily basis so I was "guestimating" my own weight then I told the audience that my weight is 81 kilograms (fully dressed). I usually think of my own weight as being just below 80 kg, but I was trying to correct it for the fact I was fully dressed - and I added a bit extra because my wife has been teasing me that I gained weight recently. As always I was completely confident that the "survey" result would come in close to the "right" number. So I was bit surprised when the  "consensus forecast" for my weight came in at 84.6 kg

It was close enough for me to claim that the "market" - or the crowd - was good at "forecasting", but I must say that I thought the "verdict" was wrong - nearly 85 kg. That is fat. I am not fat...or am I?

So once I came back home I immediately jumped on the scale - for once I hoped to show that the Efficient Market Hypothesis was wrong. But the verdict was even more cruel. 84 kg!

So the "consensus forecast" was only half a kilo wrong and way better than my own guestimate. So not only am I fat, but I was also beaten by the "market" in guessing my own weight.

I need a cake...

PS My height is 183 cm - so my Body Mass Index is 25.08 - that is officially overweight (just a little - above 25 is overweight).

PPS I have done this kind of experiments before. See here.



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