Stock Market Volatility: Are You Thinking for Yourself?
Opinions on the election are much steadier than those on the stock market.
Oct. 31, 2008— -- Election Day is just four days away, capping off a month of daily poll results and major stock market swings.
Is mob mentality to blame?
"There is such panic selling and fear driving the selling that's going on right now," Jason Weisburg, a New York Stock Exchange trader for Seaport Securities, told ABC News.
President Bush told Americans the day after the Oct. 7 stock market plunge that saw the Dow drop 1,400 points that it represented "more than a trillion dollars in losses."
A trillion dollars in losses is a lot of money. Those companies continue to make computers and cars and other goods despite the panic that set in.
"What it really represents is the market changing its mind radically, and changing it very fast," said James Surowiecki, author of the best seller "The Wisdom of Crowds."
Last spring, he told "20/20" that crowds of people can be incredibly intelligent, "even though no one person in the crowd knows everything. If the crowd is big enough, and it's diverse enough, you just have access to so much more knowledge."
Yelling 'Fire' in the Stock Market
An example of crowd wisdom is the betting site Intrade.com, where the collective wisdom of thousands of people trying to win money helped Intrade correctly predict the Oscar winners for best director and best picture -- and so far, election results -- more accurately than any pollster.
The higher the price of a candidate, the more likely that he will win.
But if these bettors are accurate, then what's happening on Wall Street?
"There are a lot of times when people are not wise, when they are crazy," Surowiecki said.
Especially when they are scared.
Some financial experts and analysts have warned of a collapse similar to the Great Depression.
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